PropertyManagementMaven: Why get Rental Insurance , your best info ever.

Renter's Insurance Myths

If you're wondering what's the big deal about renter's insurance -- like you need another way to spend your monthly paycheck? -- first consider these common misconceptions:

Does the landlord's Cover my Insurance?. In most cases, a landlord's insurance covers only structural damage to the building itself-and many landlord policies don't even go that far if the damage is caused by a tenant. If you leave the tub running and it turns your floor into cardboard and dribbles downstairs, damaging your neighbor's couch, you may be liable for the whole drippy mess. If your building went up in flames, your landlord's coverage would include repairs, but only to the building, not to the possessions of tenants.

How much is the Coveragee. Is $10 to $20 per month too much? In March of 2002, unofficial online quotes from two major carriers produced annual rates of $147 ($12.25 per month) and $203 (under $17 monthly) respectively. Both quotes had a deductible of $500 per incident, and included medical coverage for others, on-premise or off-premise. Assumptions were that the house contained a smoke alarm and fire extinguishers.

Is anything else covered with the renter insurances? Renter's insurance extends beyond on-premise theft and hazards. If your suitcase is stolen while you're on vacation, you'll likely be covered. Same with property stolen from your car. If you're prone to barroom brawls-well, you might need more help than renter's insurance, but you'll probably be covered if you hurt someone. Speaking of injuries, you'll also likely be protected if someone slips and sprains their ankle at your annual dance-a-thon; you may even receive compensation for legal defense costs in the case of a lawsuit.

My stuff isn't really worth much. You might be surprised at how quickly all those books, CDs, and kitchen appliances add up. According to StateFarm.com, most people own more than $20,000 worth of property. Refer to the lists in this article to make an inventory of your possessions prior to contacting an insurance carrier for a quote. (Some Web sites help you with this step, such as http://www.statefarm.com/insuranc/renters/howmuch.htm.) List each item along with its year of purchase and what you think it would cost to replace it today.

Types of Coverage

Personal property coverage

As with any insurance policy, coverage varies by state, company, and type, but here are some basic examples of personal property to include in your inventory. Items not listed here may still be insurable; ask agents about customizing your policy with more options.

Property typically covered:

• Stereo systems, VCRs, and television sets
• CDs, DVDs, videos, and tapes
• Cameras and other photography equipment
• Movable appliances, including microwave oven
• Furniture
• Sports equipment
• China and glassware
• Clothing
• Books
• Miscellaneous

Property typically covered with limitations:

• Home computers
• Cash, including coin collections
• Checks, traveler's checks, and securities
• Jewelry and watches
• Precious and semi-precious stones
• Comic books, trading cards, and stamps, including collections
• Antiques and fine art
• Goldware and silverware (theft)
• Rugs, wall hangings, and tapestries
• Firearms (theft)
• Furs or clothing trimmed in fur
• Boats or other watercraft, and related equipment

Natural hazards coverage

Again, natural-hazard coverage varies by state and company, but most policies protect your property against losses created by the following:

• Vandalism
• Water damage from failure of plumbing or appliances
• Frozen water pipes
• Hail
• Windstorm
• Smoke
• Explosion
• Vehicles or aircraft

For a higher premium, most insurance carriers offer options to add coverage for hazards not included in a standard renter's policy:

• Earthquake, landslide, or other damage caused by movement of the earth
• Water damage cause by an underground source or flooding
• Nuclear-hazard damages