I recommend to all my renters to have renters insurance, it is a low cost insurance and can save your personal belongings. Most landlords only carry insurance to cover there property not the renters.
See below from the Texas Department of. Insurance:
Renters insurance, sometimes called tenant insurance, pays to replace or repair your personal property if it’s stolen, damaged, or destroyed in a home or apartment you rent. A landlord’s insurance policy covers the house or apartment building but not your personal property, such as furniture, clothing, and electronics. Some rental property managers may require you to have renters insurance as a condition of your lease.
Insurance companies can sell several types of renters policies in Texas, each with a different level of coverage.
- Named perils policies (also known as specified perils policies) insure your property against losses specified in the policy, such as fire and theft. Losses not specified in the policy are not covered.
- All risk policies (also known as comprehensive or open perils policies) insure your property against every type of loss, unless the policy specifically excludes it. These policies are more expensive than named perils policies because they cover more types of losses.
All policies have a total dollar limit. This is the maximum amount the policy will pay, regardless of the amount of your claim. Make sure you buy a policy with a high enough dollar limit to replace your property if it’s stolen or destroyed.
A deductible is the amount you must pay out of your own pocket before the insurance company will pay for your loss. For example, if you have $25,000 in damages with a 1 percent deductible, you would pay $250 of the repair or replacement costs. The company would then pay the remainder, up to your policy’s dollar limit. Some companies may require a higher deductible for theft.
Renters insurance policies typically include three types of coverages: personal property coverage, loss of use, and personal liability.
- Personal property coverage pays to repair or replace your personal property, up to your policy’s dollar limit. In addition to a total dollar limit, policies may limit payments for certain kinds of property. Common limits are $100 for cash, $2,500 for personal property used for business, $500 for valuable papers, and $500 for jewelry, watches, and furs.
Renters insurance also covers your luggage and other personal items when you travel. This coverage is usually limited to 10 percent of the amount of your policy or $1,000, whichever is greater.
- Loss of use pays for additional living expenses, such as food and housing, if you must temporarily move from your home or apartment because of a covered loss. Loss of use coverage is generally limited to 20 percent of a policy’s personal property coverage. For example, if you have $25,000 in personal property coverage, your policy would have $5,000 for temporary additional living expenses.
- Personal liability protects you against a claim or lawsuit if someone is injured in your home. A renters policy typically automatically provides $25,000 in liability coverage and pays your legal costs. Extra liability coverage is available for additional premium.
Note: Ask about buying endorsements for an additional premium if you’d like to buy more coverage than your policy provides for certain items. Some of the most common endorsements add or increase coverage for jewelry, fine arts, camera equipment, and computer equipment. The availability of endorsements varies by company.
Actual Cash Value vs. Replacement Cost Coverage
Renters policies usually pay for losses on an actual cash value basis. This means the insurance company will subtract an amount for depreciation and wear and tear from the value of your property before paying your claim. For example, if someone steals your five-year-old television, the insurance company will only pay you the market value of a five-year-old television, minus your deductible. The settlement amount will not be enough to buy a new TV like the one that was stolen.
For a higher premium, you can buy replacement cost coverage that pays the full cost of replacing your property, minus your deductible and up to your policy’s dollar limit. This coverage could provide you with enough money to buy a brand new TV like the one that was stolen.
If you have replacement cost coverage, some policies will pay up to $1,500 to repair or replace your damaged property, without applying depreciation. However, if the damage exceeds $1,500, the company will pay the loss on an actual cash value basis. You must then repair or replace the property with an item of like kind and quality before the company will pay the remaining amount of your claim. Other policies may pay replacement cost differently. Read your policy or ask your agent to find out how your policy pays a claim.
Note: A complete inventory of your personal property can be helpful if you ever file a claim. Include the item, its value, and a serial number if there is one. Keep receipts for expensive items. Pictures or videos can be helpful to prove your loss to the insurance company. Keep a copy of the inventory and any photos or videos of your property in a safe place, such as a safe deposit box. TDI has a Home Inventory Checklist for you to use.
College students and other dependents living away from home may be covered under their parents’ or guardians’ homeowners policies. If you have dependents living away from home, ask your agent or company if your policy covers them.
A parent’s homeowners policy generally covers a dependent’s personal property for up to 10 percent of the policy’s personal property limit. For example, if the parent’s insurance policy has a personal property limit of $50,000, their dependents automatically have $5,000 in coverage while living away from home. Dependents are covered up to 100 percent of the liability provided by the parent’s or guardian’s policy for claims involving personal liability and medical payments to others.
Rates can vary widely among companies, even for the same or similar coverages. It pays to shop around. Following are a few tips to help you shop:
- Keep an inventory of your property so you know how much coverage you need. Make sure you buy enough coverage to replace your property if it’s stolen or destroyed.
- Get quotes from several different companies. TDI maintains www.HelpInsure.com to help you compare companies and shop for insurance. The comparison guide lists sample rates for renters insurance based on $25,000 coverage on your personal property.
- Ask about endorsements if you need or want more coverage than the policy provides.
- When comparing prices, be sure you understand the coverage each policy provides. A cheaper policy could provide less coverage.
- When getting a price quote or applying for insurance, answer questions truthfully. Wrong information could cause you to get an incorrect price quote or could lead to a denial or cancellation of coverage.
- Be sure to consider factors other than cost, such as a company’s financial strength and complaint index. The financial rating indicates a company’s financial strength and stability, and the complaint index is an indication of its customer service record.
- Buy only from licensed companies and agents. It is against the law to sell insurance in Texas without a license. Learn more about a company, including its licenses status, complaint history, and financial rating from an independent rating organization by calling the Texas Department of Insurance (TDI) Consumer Help Line or by visiting our website
463-6515 in Austin
The Texas FAIR Plan Association offers a tenant policy for qualified consumers who are unable to obtain renters insurance from a licensed company. To be eligible for this coverage, you must have been denied insurance by at least two Texas-licensed property insurance companies Texas and may not have received a valid offer of similar insurance from a company licensed in Texas.
FAIR Plan policies are available only through Texas-licensed agents. For more information, contact your agent or the Texas FAIR Plan Association
For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website