A Consumer Guide to Renters Insurance
For renters, it’s what’s on the inside
that counts.
In the event a disaster strikes, such as a re,
your landlord’s insurance coverage will take
care of damage to the building’s structure.
However, to nancially protect yourself and
your belongings, you may want to consider
purchasing a renters insurance policy.
Most renters insurance policies in
New Jersey include the following
coverages:
Personal Property (Coverage C) pays if
your personal property is damaged or
destroyed by a covered loss.
Loss of Use (Coverage D) pays your
additional living expenses (costs over the
normal amount for housing, food, and other
essential expenses) if you temporarily move
because damage from a covered loss
renders it uninhabitable.
Personal Liability (Coverage E) pays to
defend you in court against certain lawsuits
and provides coverage if you are found
legally responsible for someone else’s injury
or property damage.
Medical Payments to Others (Coverage F)
pays the medical bills of people hurt on your
property. It might also pay for some injuries
that happen away from your rental, such as
your dog biting someone at the park.
Even the most comprehensive coverage
will exclude certain types of damage.
For instance, ooding (including
tidal surge), is NOT covered. (Flood
insurance is available through the
National Flood Insurance Program:
www.oodsmart.gov)
All policies include an all-peril
deductible. The deductible is the portion
for which you’re responsible to pay in
Another factor to consider when shopping
for renters insurance is “actual cash value”
versus “replacement cost” coverage. In
the event of a covered loss, Actual Cash
Value coverage will reimburse you for the
value of your personal property as it is
now, considering its age and condition (and
minus your deductible). Many insurers offer
an option to purchase an endorsement for
replacement cost coverage on personal
property – which would pay the actual
cost of replacing your possessions with no
deduction for depreciation (but still minus
your deductible). Although this coverage
will result in some increase in your premium,
you may wish to consider this option. For
example, a three year old computer
damaged by lightning could have an
actual cash value of only $650 today, but
it would cost $1,100 to replace it. With a
replacement cost endorsement, the insurer
will pay you the current replacement cost
Actual Cash Value vs. Replacement Cost
Important to Note:
Fire and lightning; Sudden and accidental
damage by smoke; Explosion; Theft;
Vandalism and malicious mischief;
Aircraft and vehicles; Windstorm and
hail (Note: Some policies may include a
separate optional wind/hail deductible
and a mandatory or optional hurricane
deductible); Sudden and accidental water
damage; Weight of ice, snow and sleet;
Riot and civil commotion
Covered Losses
Renters insurance policies cover losses by:
Flooding (including tidal surge);
Earthquakes, earth movement, landslides,
mudslides and sinkholes; Termites,
insects, rats, mice, birds or other vermin;
Freezing pipes (unless water was shut off
or building was heated); Losses if your
rental unit is vacant for the number of
days specied by your policy; Wear and
tear, rotting, maintenance and pollution;
Mold, unless it is as a result of a covered
loss (for example, mold damage due
to ood would not be covered); Water
damage resulting continuous and repeated
seepage; Liability which results from the
ownership or use of an automobile and
other types of motorized land vehicles,
aircraft or certain watercraft; Intentional
acts caused by you or a resident of your
home; War or nuclear hazard
What’s Not Covered
Renters insurance policies do not cover
losses by: