The dry version: Renters insurance is a policy with multiple types of coverage which is a subset of the homeowners policy form, issued to those who do not own their dwelling, and which does not offer coverage for the dwelling unit, usually on a broad form and named perils basis.
Yeah, let’s pick that apart and define some of those pieces in a way that communicates the meaning a bit better.
Renters insurance is a policy
Renters insurance is, in fact, a policy. That’s the document that tells you what’s covered and why. An insurance policy is a long document. It’s often self-referential (as noted in 23(a)2, for example) and self-modifying (“This endorsement modifies the terms of Section II…”).
The underlying policy document is static and used for all of the insurer’s customers who have that type of insurance. That’s why it’s self-modifying with endorsements, to account for differing coverage needs among differing types of people. It’s self-referential because it would be ten times as long if everything had to be spelled out every time it was used in the wording. That’s why a renters insurance policy has a definitions section.
With multiple types of coverage
Your renters insurance policy is defined by the kinds and amounts of coverage that it offers. You’ll have a certain amount of coverage for your personal property (against what, we’ll see in a moment) and a certain amount of coverage for liability, for instance. Those levels are set out on the declarations page, which uses the policy to define the coverage so that it can remain easy to read.
Renters insurance includes multiple types of coverage for the same reason that any other policy does – you don’t want to have to think about every single risk you might face and go buy coverage for it. Sure, you would remember to buy fire insurance, but would you remember to buy broken pipe insurance if you had to do so separately? It’s also much easier to administer as one unit. Doing so keeps overhead low, as well, allowing the price to remain affordable. And Pennsylvania Renters Insurance is definitely affordable, starting at around fifteen dollars a month. Sometimes it can even cost less!
Which is a subset of the homeowners policy form
Before renters insurance came homeowners insurance, bundling together a variety of types of coverage that those who owned their dwelling would need. The renters policy is very similar to the homeowners policy in many respects, save one that we’ll get to in a moment.
They are, of course, not the same at all, but the general types of coverage and much of the policy language you’ll find on renters insurance is borrowed wholesale from the homeowners insurance policy. That’s because the people being insured, and the risks being insured against, are quite similar in most cases.
Issued to those who do not own their dwelling
You can’t get a renters insurance policy if you own the home in which you live. It wouldn’t cover what you need to cover, so the definition of renters insurance includes that it’s not issued to homeowners.
On the other hand, though, if you rent a room from someone who owns their home, you can and should get renters insurance because their homeowners policy only covers them, not you. As a matter of fact, the same applies if you “rent” from your partner or fiancée or anyone you’re connected to but not married to. Their homeowners insurance won’t cover you unless you’re named on it, and some companies are hesitant to name an insured who doesn’t own the home for a variety of perfectly valid reasons.
So if you live with a partner and they own the home, you’ll want to consider renters insurance.
And which does not offer coverage for the dwelling unit
Nope, no coverage for the structure or dwelling is to be found in a renters insurance policy. The very definition of renters insurance is that it’s for a renter, so why would you need to cover the building? This, of course, is unique to residential real estate. Triple net leases are altogether unheard of in the residential rental market, and that’s a positive thing for tenants.
Since leases that make you responsible for rebuilding the structure are rare, insuring the building isn’t something you need to worry about. We did note one company that leases homes from owners and then tenants sublease the home, but it’s the company in the middle who’s responsible for the structure, not the tenant.
Usually on a broad form
The broad form policy simply means that the renters insurance covers many risks that may be more rare than fire or theft, but are serious and should be covered. This is as opposed to the original concept of “fire insurance,” which was just that – insurance against a fire, and not much else.
And named perils basis
The perils (things against which you are protected) in the policy are named. You are covered for (and only for) those risks named in the policy such as fire, theft, vandalism, broken pipes, weight of ice and snow… The list goes on and on.
You can, optionally, often add an endorsement which will give you “open perils” coverage. This means that the policy insures against “direct physical loss” to your property, except for things which are specifically excluded. This coverage is very comprehensive, and offers quite a bit of protection. Common exclusions are things like nuclear hazard, which was excluded for some very interesting reasons that are outside of the scope of this article but we’ll address in the next few days.
So what is renters insurance, and what is the definition of renters insurance? There you have it. If you still have questions, just call (800)892-4308 or click to get covered - whether you need Pittsburgh renters insurance quotes online or coverage anywhere else!
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