What Are Apartment Insurance Exposures?

What are apartment insurance exposures on Austin Renters Insurance?  Well, the textbook definition of “exposure” is “The state of being subject to loss because of some hazard or contingency. Also used as a measure of the rating units or the premium base of a risk,” according to IRMI.

That’s not a bad definition, but it’s one which makes the fatal assumption that the reader has a significant grounding in risk management.  We’ll pick it apart in a more friendly way below our Video Guide To Texas Renters Insurance.

What Are Apartment Insurance Exposures?

A better phrased definition of “exposure” might read, “Being subject to loss because of a specific thing that increases risk.”  That’s better, but still of limited utility.  A loss, of course, is something that causes damage to property or costs you money through liability.  Anything that increases the risk of that happening is an exposure.

If you owned a home and it had a swimming pool, that would be an exposure because any bodily injury someone suffered because of that pool would create liability for you.  The exposure is defined in part by anything you’ve done to mitigate the risk of significant financial loss from being sued over that injury someone suffered.

Properly fencing or covering the pool helps to mitigate the risk.  Proper locks do the same.  Alarms to inform you of unauthorized access to the pool are an additional way to reduce the risk from the pool.  But in an apartment, liability from the pool is generally not your problem.

So what are some examples of apartment insurance exposures?

Apartment Insurance Exposures: Kids

Did you know that kids are a great way to incur liability?  You’re responsible for the things that they do and the damage they cause!  The good news is that your renters insurance covers their acts – intentional or otherwise – when they’re young.  Generally children are presumed to not have the capacity for negligence until they’re 13 under most policies.

Whether it’s a baseball through someone’s window or something more serious like accidentally starting a fire, the insurance exposure found in your kids is covered by your policy.

Apartment Insurance Exposures: Whose Responsibility Is It, Anyway?

Your lease probably spells out whose responsibility snow removal is.  In the real world, though, that often is mostly irrelevant.  The lease is an agreement between you and the landlord.  It’s not binding on a third party when there’s a slip and fall because the snow wasn’t clear.

The person who fell is going to sue you, the owner of the property, the manager of the property, and anyone else they can find who might have been responsible for that snow removal.

That’s exactly the sort of apartment insurance exposure that you have renters insurance to protect you against.  You may have thought the landlord would get around to it, but that didn’t happen fast enough.  Your liability coverage offers a defense against the claim or suit, as well as the ability to pay for those damages up to the policy limit.

For a few dollars a month, the coverage can protect you from a wide variety of exposures that might result in people suing you.

Apartment Insurance Exposures: How Your Policy Protects You

As soon as you’re aware of a claim or potential claim, you notify your insurance company.  Instead of you hiring a lawyer out of your own pocket to defend you against the claim, the insurance company pays for your defense.  It’s not even part of the policy limits, because they have a duty to defend you.  We’ve also written on what happens in a renters insurance liability claim, as well.

Once they start defending you, that’s your lawyer.  Remember that the duty to defend is broader than the duty to indemnify.  That means that even if coverage is in question, the insurer still has a duty to defend you until that question is settled.  Since the liability coverage on Austin Renters Insurance is quite broad, this is generally not a frequent concern.

In the event that the suit is lost or the claim is settled, the insurance company pays for the loss.  Your apartment insurance exposure doesn’t have to cost you money.  That’s why you have insurance in the first place.

Problematic Apartment Insurance Exposures

There are some types of exposures that are not easily insurable.  If you have a large hole in your yard, for example, that’s an attractive nuisance likely to cause a loss.  Some insurance companies aren’t willing to insure people with certain types of dogs or unfenced trampolines because they significantly increase the risk of a loss to the point where the policy just can’t be priced appropriately for the risk that’s being taken on.

It’s important to discuss exposures like these when you’re buying your renters insurance, to make sure you have the coverage that you think you have.  Hiding an exposure does nothing except make it difficult to get coverage and defense when you need it the most.  Honesty when buying insurance makes sure that the policy is priced correctly and that you have the right coverage.

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