Our mission at Bungalow is to simplify and improve insurance. To that end, this is the first of a multi-part series designed to demystify renters insurance (sometimes called “rental insurance” or “apartment insurance”), and help renters insurance customers better understand what exactly they’re getting with their purchase.
People often come to us and ask, “What is this ‘renters insurance’ thing anyway, and why does my building require it?”
In this blog post, we’ll explain some of the fundamentals of renters insurance. In later postings, we’ll explore more of the nuances of the product, including answering some of the most common questions we get about what renters insurance covers.
What is renters insurance? Broadly speaking, renters insurance has a few different components.
The first, and probably most intuitive, is property insurance. Property insurance covers a renter’s property and belongings, such as clothing, furniture or electronic equipment, in the event of loss from fire or theft or other perils. A typical property insurance coverage may be $20,000, with a $500 deductible.
The second component of renters insurance is liability insurance. Liability insurance is a bit more complicated, but in essence, liability insurance covers damages you do to third parties, for example if you are responsible for bodily injury or property damage to others, like if a visitor trips over a rug and breaks a leg. In addition, in the event that you are sued, your liability insurance helps to cover the associated legal costs and related damages. Most renters policies provide $100,000 minimum of financial protection against liability claims and lawsuits brought by others for accidental bodily injury or damage to their property.
Along with liability insurance, most renters insurance policies include medical payments insurance. This coverage pays a certain amount per person, say $1,000, whenever an accident involves bodily injuries to others — regardless of your legal responsibility.
The best way to think about liability insurance is as protection from a worst case scenario. You hopefully will never need it, but in the event you do, you’ll be really, really glad you have it.
The last component of rental insurance or apartment insurance is loss of use insurance. If your home or apartment is damaged and you have to leave it during repairs, loss of use coverage is designed to pick up the bill. Loss of Use coverage pays for the additional costs you incur for reasonable housing and living expenses if a covered event makes your home or apartment temporarily uninhabitable while it’s being repaired or rebuilt.
That’s it for this post on demystifying renters insuance. Check back in soon when we explain how to decide how much coverage you need!
The information in this post is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions and limits of the actual policy. Nothing on this site alters the terms or conditions of any of our policies. You should read the policy for a complete description of coverage. Coverage options, limits, discounts and deductibles are subject to availability and to individuals meeting our underwriting criteria. Not all features available in all areas.