Renters insurance has 2 main coverages: Personal Property and Liability insurance.
Your Personal Property
It covers anything you own. The best way to think about this is to rip the roof off the apartment or home, turn it upside-down and shake it. Anything that falls out that belongs to you would be in this category. Toothbrushes, couches, TV’s computers, dishes.
If you have a roommate, it’s important to understand that your policy covers only your belongings. You cannot legally insure property that does not belong to you, so your roommate would need a policy of their own – unless they are your “resident relatives.” If they are both related to you and living with you, check your policy definitions to see if their property is covered under your policy, or ask your agent.
If you get sued due to an accident at your apartment or home that was your fault, your liability insurance pays for the medical bills or property damage that’s your fault. Slip, and falls are the most common claim to have paid from liability insurance. Your liability insurance works together with other policies you have if you are ever sued for hurting or killing anyone in a car wreck or if anyone is hurt at your apartment or home and you are at fault. Making sure you have a good liability shield against lawsuits is a critical variable when determining your limits. If your shield against lawsuits is minimal, this is a great place to find a coverage cushion for your liability.
How Do They Value My Personal Property After a Claim?
Replacement Cost and Actual Cash Value
There are two options for valuing your personal property after a claim with an insurance policy:
Replacement Cost is simple. It values your personal property at its cost today. It would allow you to buy a new item to replace the one lost, stolen or damaged, no matter how old that item is.
Aсtuаl саѕh vаluе, whісh іѕ thе replacement cost оf аn іtеm minus dерrесіаtіоn. For example, an old pair of tennis shoes would get you $5 to $10 depending on the wear and age of the tennis shoes
Because replacement cost values items you own at a substantially higher value when you file a claim, it costs more.
Inbuilt Limits –
All personal property policies have limits on certain items when it comes to covering them against theft. For example, there is usually a $1,000 limit for jewelry and anywhere from a $3,000 to $10,000 limit for computer equipment. If you want much higher limits, you can purchase them through an endorsement (change it to a basic policy).
When you file a claim, the insurance company will only pay you once you’ve created a written inventory of all of your possessions. It does sound like much work to do, but it doesn’t have to be. At least not right now. If you get out your digital camera and open up all the door and drawers, and take pictures of everything you own – store them on the web, or some other place away from your residence – you can always go back and look at the pictures later when you have to create that list.
The reason I bring this up is simple: Most people can’t tell you what is in their living room right now, at least not everything. To maximize your claim, you’ll need a comprehensive list of all the items that were damaged, stolen or destroyed.