A new year is around the corner, causing many to throw darts at a map to make a move. Simultaneously, holidays are about to increase the amount of belongings people have — hopefully in the form of jewelry, electronics, or whatever other types of valuables one has a weakness for, whether it’s a new pair of Jimmy Choos or ultimate tools that one wants to add to what they deem as their most valuable collection in addition to their standard personal property.
Regardless of whether you get what you want for Christmas or whether you’re moving, every renter needs the vital coverage of renters insurance. Without it, they’re extremely vulnerable to personal property losses. The cost of renters insurance is a great value for the amount of coverage renters receive from the policies, but renters must understand exactly what will and won’t be covered, and what the limits are on the types of things many people want covered more than other belongings.
Renters insurance isn’t some ultimate policy that will replenish you completely and limitlessly in the event that your personal property is destroyed or needs to be repaired. It does have limitations and exclusions. With gift giving and a new year around the corner, both are perfect times to re-evaluate your needs, update your current policy, or get insurance if you don’t have it. This is even true for those using TV trays as end tables, poker card tables for dinner tables, and paper plates and plastic forks in place of fine china and silver.
Before you choose coverage though, you need to know what you need coverage for, how much you need, and what your policy’s coverage limitations and exclusions are. Unfortunately, these limitations are usually on items people want coverage for most and that are the most valuable.
The Limitations and Exclusions of Renters Insurance
As with homeowners insurance, there are several distinct categories of items that renters insurance puts limits on and that aren’t covered at all. Here are five things renters insurance will only cover so much of or that aren’t covered at all.
Practically all homeowners and renters insurance policies have limitations on the amount of protection for jewelry. Most insurance policies have blanket coverage up to $2,500 on any type of jewelry. All it takes is a couple of nice watches or your wife’s wedding ring and you’d quickly be over that coverage limit if you suffered a loss.
#2: Computer Equipment
Another coverage many renters insurance policies don’t cover is computer equipment. Like jewelry, there’s a specific limit to the insurance company’s liability unless extra protection is purchased by the consumer. Many renters insurance policies offer a $2,500 limitation on coverage for computer equipment. While most people may not come close to this level, consider avid video game players with multiple laptops and the popularity of other types of computer equipment like iPads, tablets, and more.
Read the details of your renters insurance policy to find out how much it covers electronics other than computer equipment. Perhaps you have many nice television sets. Since we live in a world filled with valuable electronics such as flat-screen televisions and sound systems, limitations on electronics can leave you empty handed due to increasingly expensive electronics. If your policy has a low level of coverage for electronics, consider adding additional insurance to ensure your possessions are adequately protected. You’ve worked too hard to let limitations on your renters insurance policy stop you from being fully protected.
Art can be one of the biggest limitations on policies because sometimes it’s not covered at all. If your policy does cover art, it will be only up to a very small amount of coverage. Needless to say, this isn’t referring to dorm room posters. If you own any type of actual art, lithographs, or one-of-a-kind art pieces, talk with your insurance company to see if it’s covered and how much of it’s covered if covered. If you don’t have coverage or enough coverage based on the value of your art collection, consider riders or inland marine policies. You should definitely get a professional appraisal of the artwork to ensure there’s enough coverage, and sometimes your insurer may also require the appraisal in order to raise limitations.
#5: Collections and Collectibles
Collectables or collections are another possession that needs to be covered under a separate insurance policy or floater. Stamp collections are one of the best examples insurance companies use to show their customers the risks that they face due to limitations and inadequate coverage. Many stamp collections can be very valuable, but the amount of insurance coverage offered with the standard renters insurance policy is minimal.
Coverage under Your Landlord’s Policy
If you think the limitations on your renters insurance policy will be supplemented by your landlord’s insurance, you’ve hit another wall when it comes to coverage. That’s because there isn’t any.
It’s that simple, but unfortunately, this becomes a complicated and frustrating process for renters who believe their belongings are covered by their landlord’s insurance. Not only do you need to be aware of the limitations of coverage of your renters insurance, you need to be aware that you don’t have any coverage from your landlord either. If you have more than $2,500 in computer equipment and have exhausted your renters insurance policy’s limit on computer equipment in a claim, you can’t expect your landlord’s insurance to pick up the difference.
Far too many renters mistakenly believe they’re covered under the homeowner’s or building owner’s insurance policy. The apartment building owner’s insurance policy will only cover damage or destruction of the building itself. You need your own renters insurance to protect any personal property from fire, theft, or damage experienced in your rented home even though the building belongs to someone else. Their insurance will never, under any circumstances, provide any coverage for your belongings, and their insurance definitely won’t fill in any gaps due to your policy’s limitations.
How to Handle the Limitations & Exclusions of Renters Insurance
Consumers should purchase additional insurance if they have one of the five items that renters insurance either has limitations on or that aren’t covered. You can purchase additional separate insurance which is sometimes called a floater, rider, or inland marine policy. As a rider it — not surprisingly — rides on the coattails of your main renters insurance policy. For example, my renters insurance policy has a $2,500 limit on jewelry, so to ensure I have enough coverage for my jewelry, I have a separate policy providing sufficient coverage for it. Riders are very simple and an inexpensive form of insurance protection, but remember that prices vary according to the amount of coverage you need and what you need it on.
Fortunately, even though renters insurance has limitations, the ways to obtaining adequate coverage are basically limitless.
Follow Desiree on Twitter @DesireeBaughman.