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5 things your renter’s insurance won’t cover

public adjusterDavid Bakke is an Atlanta-based contributor for the personal finance resource, Money Crashers. He writes about money management topics including insurance options, investing, and retirement planning.

You probably have a lot more stuff than you think, and the cost of replacing it all out-of-pocket would likely be high. Enter, renter’s insurance. In the event of a robbery or damage to your possession, renter’s insurance covers your losses, as long as you can provide proof of ownership and replacement costs. That’s not to say, however, that once you sign on the dotted line it’s all peaches and cream. In fact, there are several things a basic renter’s insurance policy doesn’t cover. Read on to learn more.

5 things your renter’s insurance won’t cover

1. Natural disasters

Although you may think renter’s insurance should cover damage from natural disasters, a basic policy does not. If you happen to live in an area prone to flooding, sinkholes, wildfires or earthquakes, consider purchasing a separate policy that covers that possibility.

public adjuster2. Damage you are responsible for

If that holiday party you’re throwing gets out of hand and someone is injured, you’re not covered. If you think there’s a chance this may happen to you, make sure liability insurance is included in your basic renter’s policy or get it added on. This covers accidents and injuries occurring at your apartment as well as legal fees in the event you get sued.

3. High-priced items

If you own expensive jewelry, rare sports memorabilia, high-priced artwork, or anything else of significant value, a basic policy doesn’t cover it. If that’s the case, you’re going to want to obtain a separate insurance policy for those items. And don’t go by your own estimate of their value – get them appraised by a professional.

4. Anything you can’t document

If you don’t have documentation of the value of your items, such as receipts, you could very well be left out in the cold. Do the following to ensure this doesn’t happen to you:

  • Make sure you keep receipts for all large purchases.
  • Create a file where you list both model and serial numbers for your electronics.
  • Get your expensive possessions professionally appraised.
  • Invest in a fireproof lock-box or a small safe to store your documents, or consider digitizing them and saving them in a cloud.
  • Snap photos of all your items, or use a home inventory app such as the National Association of Insurance Commissioners’ MyHome app and you can store your information on your smartphone.

5. Your roommate’s stuff

If you’re living with a family member, their possessions are going to be covered as long as their name is on the insurance policy. Roommates not related to you, however, must purchase their own renter’s insurance policy in order to be covered.

A renter’s insurance plan can cost as little as $10 a month, making it affordable for most renters. State Farm reports that the average renter has at least $20,000 worth of property, so take a few moments to create an inventory and decide how much coverage you need based on the total value of your possessions. When hunting for coverage, go with a replacement cost policy, which reimburses you for what it costs today to replace a damaged item, as opposed to a cash value coverage policy, which only covers the item’s current worth. It’s a bit more expensive, but you may find it to be more cost-effective should an incident occur.

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