What the three parts do
Personal property coverage pays to replace your belongings after fire, smoke, theft, vandalism, a burst pipe and a list of other named perils. It follows you around, so a laptop stolen from your car is usually covered, subject to your deductible. Liability covers you when you are the cause, as with a guest who slips on your floor, a dog bite, or the bathtub you left running into the unit below, and it pays for a lawyer if you are sued. Loss of use pays for a hotel and the extra cost of meals while your apartment is unlivable after a covered loss.
Choosing the numbers
People underestimate what they own. Walk through with your phone and add it up: clothes, shoes, a bed, a sofa, cookware, electronics, a bike. A modest one-bedroom commonly comes to $20,000 or more. Liability typically starts at $100,000, and raising it to $300,000 often costs only a few dollars more a month. A deductible of $500 or $1,000 is standard, and the higher one trims the premium.
Insist on replacement cost coverage over actual cash value. Actual cash value pays what your five-year-old sofa was worth on the day of the fire, which is very little. Replacement cost pays for a new one, and the difference in premium is small.
What it does not cover
- Flood and earthquake damage are excluded from standard policies and need separate coverage.
- A roommate's belongings are not covered unless that roommate is named on the policy, and separate policies are cleaner.
- Jewelry, cameras, instruments, bicycles and cash are capped by category limits, often $1,000 to $2,500, unless you schedule the item with a rider.
- Bedbugs, other pests and ordinary wear are not insured events.
- Your car itself belongs to your auto policy, though items stolen out of it fall under the renters policy.
Buying and using it
Get quotes from three insurers, including whoever covers your car, because bundling frequently takes ten percent or more off both policies. If your lease requires coverage, the landlord will ask to be listed as an interested party, which simply means the landlord is notified if the policy lapses. After a loss, file a police report for any theft, photograph the damage before cleaning up, and keep receipts for the hotel and meals.
Tip Make a slow video of every room, opening drawers and closets and reading serial numbers aloud, and store it somewhere outside the apartment. It turns a claim from a memory test into a list.
