Renters Insurance Definition

Many people ask us what renters insurance is, because they’ve never had it before.  That’s an easy one, but then there are a few other things we should define after it!

The definition of renters insurance is a policy that provides broad personal property and liability coverage to someone who does not own the dwelling in which they live.

How much do you know about Amarillo Renters Insurance?  Test your knowledge with some additional renters insurance-related definitions below our Video Guide To Texas Renters Insurance!

Business

A “Business” means a trade, profession, or occupation.  Whether it’s part time or full time, it’s a business!  In a nutshell, if you’re exchanging compensation for something, you probably don’t have coverage for the exchange or for any personal property used to facilitate it.  That would be considered business personal property, and should be insured separately.

An exception applies if you make less than a stated amount, often two thousand dollars, in the preceding twelve months from the activity.  Volunteer activities are not considered to be business. Some policies include liability for home day care only if there is no compensation except mutual exchange of services. So if you and your neighbor trade watching each others’ kids, you might have coverage.  If you’re paid for it, that’s excluded.

Controlled Substance

“Controlled substance” on a renters insurance policy has the same meaning as that defined in the Controlled Substances Act, 12 USC Sections 811 and 812.  This includes (not limited to!) LSD, cocaine, marijuana, methamphetamine, and similar substances and their analogues.

Why would controlled substances even be mentioned in a renters insurance policy?  Because coverage is absolutely excluded for bodily injury or property damage connected to the use, sale, or manufacture of such items.  Your renters insurance will not cover you if a hash oil fire burns down your apartment, for instance.

There was a case recently where both the tenant’s insurance and the landlord’s insurance on the building denied coverage for the costs of cleaning up a methamphetamine operation in a rental home, using similar logic in both policies.

Denial is absolutely the standard way such claims would be handled, and any deviation from that involves an adjuster or a court creatively construing a policy in favor of the insured.  Note that this would also exclude coverage for water damage, mold, and fires arising from growing marijuana even in states where it’s legal to do so.  The standard used in the renters insurance definitions in the policy is the Federal Controlled Substances Act.

Deductible

A deductible is the initial part of the loss that you pay before renters insurance kicks in and pays the loss up to the policy limits.  It’s a small amount of money, often $500.00 and it’s there to ensure that you’re using the policy for its defined intent, losses that you couldn’t reasonably handle on your own.

Some people set their renters insurance deductible much higher, but this is a false economy. You’ll find that the amount of time you need to go without a loss to make the small savings in premiums worthwhile is just not an amount of time worth betting on.  Can you be sure you won’t have a claim in the next hundred years?

The definition of a deductible is that it’s paid to the company from which you purchase the replacement property.  It’s not a fee paid to the insurance company.  It’s just money that you add to the check from the insurer to get to the total of the loss.  It’s subtracted from that check, so all you have to do is put the money in and you’re made whole.

Insured

The definition of “named insured” is the person who is named on the declarations page of the policy.  But the definition of insured is more broad than that.  It can include, for example, residents of your household who are your relatives.  It also includes other minors who are in the care of you or any insured.  That’s because minors can’t contract for their own insurance.

Students away from home at school who were residents of your household immediately prior can be considered to be insured if they’re under 24 and related to you, or under 21 and in the care of someone who is an insured because they’re related to you.

In addition, if there are animals or watercraft for which the policy offers liability coverage (read your policy!), any person or organization you loan them to can be an insured if they’re legally responsible for the animals or watercraft.  Be careful with this, as an exchange of money voids coverage and the coverage has been construed rather narrowly in the past.

Insurable Interest

You can’t insure something you don’t own, or for which you’re not responsible.  Insurance is not a way to bet on the chances of something bad happening when you have no interest in it.  If more than one person owns something, each would receive a pro-rated portion of the loss based on their ownership interest.

Liability

The definition of liability is your legal obligation to pay for bodily injury or property damage caused by your negligence. There are a wide variety of scenarios that could lead to this.  That’s why liability coverage is so important. Liability coverage on Amarillo Renters Insurance usually applies to insureds younger than thirteen whether or not they expected or intended the loss.

Liability does not include liability arising from most motor vehicles.  Many watercraft are also excluded, as are aircraft except model or hobby aircraft.

Liability coverage also includes defense coverage. That means that the insurance company has a duty to defend you against the claim or suit.  The insurance company pays for that lawyer because it benefits you, the company, and other policyholders to make sure they’re only paying valid claims. They also know that most people can’t afford to defend against such a suit.

Occurrence

An occurrence is an accident that causes bodily injury or property damage for which you have liability. One occurrence can include continuous or repeated events. If a person trips on your stairs five times, but only the last time are they seriously injured, one occurrence has happened.

Property Damage

The definition of property damage is “physical injury to, destruction of, or loss of use of tangible property.” In plain language, that means that if you cause harm to someone else’s property, damage it so it can’t be used and they suffer a loss, or destroy their property.

Property damage liability can arise in a variety of ways. Kids accidentally damage things all the time, including expensive property in stores.  People drop things accidentally with depressing regularity. Your liability coverage is there to protect you from these common events.

Residence Premises

The definition of residence premises  is the place that you live as well as the place that is shown on the declarations. It can include other structures and grounds, as well. If you rent a single family home and someone is injured in the back yard, your coverage protects you because that’s part of the residence premises.

This is also why it’s crucial to let your renters insurance know if you move.  The policy can easily be moved with you.

So Now You Know The Definition Of Renters Insurance…

As well as some common terms that you’ll see in a renters insurance policy.  You should take the time to read your policy. Reading the policy is the best way to understand the coverage.

If you don’t have a policy, now is the time to resolve that!  Renters insurance is affordable and easy to find.

The national average price of renters insurance is just $187.00, according to the III. That works out to as little as fifteen dollars per month.  The vast majority of families can budget renters insurance easily at those prices.  

Additionally, it's important to note that renters are at a significantly higher risk of experiencing loss than homeowners.  Renters occupy roughly one third of total housing stock in the country, and yet they are fully fifty percent more likely to experience theft than homeowners, according to the Bureau of Justice Statistics.

It only costs a few dollars a month to protect your family, and this cheap renters insurance is a great way to mitigate the additional risks that come with being a renter.

All you have to do is call (800)892-4308 or click to get covered - whether you need Amarillo renters insurance quotes online or coverage anywhere else!

Effective Coverage offers the nation's only completely mobile platform to quote and purchase renters insurance right from your phone or tablet in just one minute. Get an online renters insurance quote today and protect your family.

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• Do You Need Renters Insurance ASAP? Check out the fastest way to buy renters insurance online and get covered in just 60 seconds!
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• Do You Need Some Time Alone With Your Thoughts? We understand, which is why we created the Texas Guide To Renters Insurance. 
• Just Want To Watch A Movie Together? See our Video Texas Renters Insurance Guide!