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Limitations of Renters Insurance

By Compuquotes Team on March 27th, 2008

Renters Insurance

While it can be immensely useful if you're living in an apartment or in a house that you don't own, renters insurance isn't designed to cover every possible instance where you might need coverage. Some of these limitations are due to the fact that as a renter you aren't responsible for some things... they fall under the property owner's insurance policies instead. Other limitations are because of the way that the insurance business works, offering coverage for most of the things that you'll need on a single policy but leaving off a few items so that you'll have a reason to buy additional coverage. Here are some of the main benefits of renters insurance as well as the limitations of these benefits, so that you'll be able to see whether renters insurance is right for you and your needs.

Benefits of renters insurance

There are a number of benefits to having renters insurance, not the least of which is the peace of mind that knowing your personal property is ensured can bring. Renters insurance will generally provide you with insurance from theft as well as damage or destruction from a number of causes. Much like standard homeowner's insurance, your renters insurance will provide you coverage for fire, smoke damage, vandalism, electrical surges, and a number of other sources of damage (both natural and man-made.)

Limitations of renters insurance

Unfortunately, renters insurance suffers from some of the same gaps in coverage that most homeowner's policies have. Two of the most well-known limitations for many renters insurance policies are any damage or destruction that are caused by floods or earthquakes, though there may be additional coverage limitations in the policy that you choose as well. Chances are your landlord's insurance doesn't cover these limitations either, and even if it did there would be no coverage provided for your personal belongings in the property insurance that your landlord has.

Reasons for these limitations

The limitations that affect most renters insurance policies (and most insurance policies in general) all come back to the workings of the insurance business as a whole. Most insurance companies will allow for a wide variety of natural disasters in their policies, but with the exception of fires they tend to require additional coverage to be bought before they'll cover common natural disasters. This means that your renters insurance could quite possibly cover volcano damage, but won't replace anything damaged in a flood unless you pay extra.

What to do about these limitations

There isn't much that you can do about the limitations on renters insurance other than making sure that your policy offers you all of the coverage that you want before you purchase it. If the house or apartment that you're going to be renting is in a location where you might be in danger of floods, you should probably make sure that they include flood coverage even though it might cost a little more. If you live in an area that has had several earthquakes within the last few decades or that lies near a fault line, get them to add on earthquake protection as well. Even though there may be a good chance you'll never need the additional coverage, it's better to have it and not need it than to need it and not have it.

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