Policy Coverage Options to Consider

Purchasing an Apartment Insurance Policy

Basic apartment insurance coverage protects your belongings from property damage and provides liability protection against personal injury and property damage claims. Renters insurance companies typically also offer several additional policy coverage options. These options supplement basic apartment insurance policies to give the insured more comprehensive protection. Read on to learn about the different policy coverage options available with renters insurance.

Actual or Replacement Coverage

The most important policy coverage option renters have to consider is whether to opt for actual cash value or replacement cost coverage. These coverage options apply to the insuring of your possessions. Actual cash value (ACV) policies will pay the policyholder the depreciated value of the property that was damaged. For example, if you had a three-year-old computer stolen, an ACV renters insurance policy would only pay you for the computer’s current market value, which is unlikely to be more than your policy deductible. Replacement cost coverage, on the other hand, will reimburse you for the full cost of replacing the damaged property. Although replacement cost apartment insurance policies are about 25% more expensive on average, they are worth the additional cost.

Additional Coverage Options

Specific policy coverage options will vary from insurer to insurer, but most companies will offer some variation of the following supplemental coverages.

• Identity theft/fraud protection. The basic form of this coverage provides credit card fraud protection, which will pay up to the specified limit on unauthorized transactions on your debit and credit cards. This coverage may also apply to counterfeit money and forged personal checks. Some insurers will even provide apartment insurance policyholders with a consumer fraud specialist to help them rectify and report the damage done to their finances.
• Personal property floater. The terms floater, rider, and endorsement all refer to a special coverage added to a renters insurance policy in order to provide full protection for especially valuable items. Electronics, artwork, jewelry, and collector’s items are examples of items that may require a personal property endorsement.
• Flood coverage. Basic apartment insurance policies do not cover flood damage to belongings. To protect your possessions from flood damage, you must purchase a separate flood insurance policy.
• Loss of use. Some renters policies include loss of use coverage by default, while others offer it as an option. Loss of use coverage will pay for your living expenses up to a certain limit if your home becomes uninhabitable. Covered living expenses would include lodging, food, and storage expenses.
• Earthquake/volcanic eruption. A standard apartment insurance policy may not cover damage resulting from earthquakes and volcanic eruptions, so if you live in an area prone to either of these disasters, you might consider this coverage option.