A number of standard coverages are included with most renters insurance policies. This guide will tell you what those standard coverages are, as well as explain what types of endorsements, or “add-ons,” you can make to your renters policy for high-value items, such as expensive jewelry or furs. You can also learn about what to expect when you begin a renters insurance application and some of the lingo associated with renters insurance. Also included are some scenarios to help you better understand the importance of renters insurance and where your coverage comes into play.

Renters Insurance Contracts and Coverages:
There are different kinds of renters insurance contracts, such as the well known industry contract called an HO-4 form. Renters policies are usually “named peril” policies, which means that somewhere in your policy paperwork the covered perils are actually spelled out. These “named perils” are standard across most renters insurance policies. A peril is something that exposes you to risk or harm, such as fire or lightning. If a peril is not listed it means that you probably aren’t covered for it. Some policies offer special add-ons called endorsements to protect you from these additional perils.

As referenced above, one of the better known renters insurance contracts is called the HO-4. Below you’ll find six of the more common covered perils on the HO-4 and some explanations about coverage limits, as well as a few “what if” scenarios to demonstrate how those coverages can help you in the event of a loss.

· Fire or Lightning
· Windstorm
· Smoke
· Vandalism or Malicious Mischief
· Theft
· Accidental Discharge of Water (e.g. a sink overflowing)

You will also be asked to choose a dollar amount for personal property coverage and personal liability coverage.

Personal Property Coverage:
The coverage limits you choose for personal property coverage are meant to cover you in the event that one of the standard perils listed above occurs. Personal property coverage includes coverage for personal items in your home such as clothes, furniture, appliances, linens and even toiletries and cleaning supplies. For example, if you choose $20,000 in personal property coverage, you will have up to $20,000 to replace your property if a named peril occurs.

Remember to account for all your personal property—it is very common to grossly underestimate the value of all your personal property. People often forget about dishes, clothes and flatware and they simply focus on the big ticket items.

When replacing property, retail value is often taken into account, assuming the policy has a replacement cost endorsement, as opposed to actual cash value. A policy with replacement cost replaces the property with something that is of similar kind and quality. A policy with actual cash value replaces the property after taking depreciation into account. For example, if you lose your sofa in a fire, replacement cost coverage is going to look for something similar in kind, quality and cost to the lost property. Actual cash value would take depreciation into account for the lost property, so the longer you have had the sofa, the less money you will get for the claim.

Personal Liability Coverage:
You will also be prompted to choose a dollar amount for personal liability coverage. Personal liability coverage is protection in the event you are found liable for unintentional bodily injury or property damage, occurring on or off of the property, and that is not related to automobiles or business. For example: a slip and fall on the premises, or accidentally injuring someone with a golf ball at the driving range.

Deductible:
You will also be asked to choose a deductible amount, which is the amount of money you pay before your insurance starts paying. Remember that you will need to ensure this amount of money is always available should the need for it arise after filing a claim.

Endorsements and Special Coverages:
When obtaining a renters insurance quote, take note of some of the special options you can choose from. Endorsements are add-ons to your standard renters insurance policy that provide more protection for high-value items and other types of fraud.

• Valuable Items limits. All insurance policies have limits on Jewelry, Furs and other valuable items. Make sure to account for these on your quote and add an endorsement for additional coverage if necessary.
• Identity Fraud/Theft: This endorsement will help you recover your credit status should you fall victim to identity theft.
• Water/Sewer Backup: Imagine the mess of a backed-up sewer pipe or malfunctioning sump pump in your apartment or house. (A sump pump is used to remove water that has accumulated in a sump pit, commonly found in the basement of a home.) This endorsement will help clean up, repair or replace your damaged household items.

It’s easy to read more online at geico.com about renters insurance coverage and you can also get online renters insurance quotes there. Be sure to check out the guide called “Getting a Quick and Complete Renters Insurance Quote" before you apply for a quote so you are prepared for the application questions. A 2006 poll conducted by the Insurance Research Council found that only 43% of renters nationwide had renters insurance - don’t be left in the dark without renters coverage!




Tips & Tactics

Helpful advice for making the most of this Guide

• •  The following scenarios will give you a better idea of when and how your renters insurance comes into play. The scenarios address some of the different coverage options on a renters insurance policy.
• •  You're out of town on vacation and see a clip on the evening news about a tornado in your county. Sure enough, you get home and the duplex you were renting is in pieces and your things have been thrown all across town. A typical HO-4 policy would provide coverage for your lost and damaged items. Many policies also include 'loss of use' coverage that would help with additional living expenses such as your hotel bills while you looked for a new place.
• •  You live in a huge, multi-building complex. Even if something happens to the building and you lose all your stuff, the landlord's policy will help replace it for you, right? Unfortunately, this isn't usually the case. A landlord's policy is typically just going to cover the cost to physically rebuild the unit and they may or may not help you with a temporary place to stay depending on the terms of your lease. You could easily find yourself in this position if your water heater or the pipes in the wall were to burst.
• •  A neighbor stops by to borrow some milk and slips on your freshly polished hardwood floor. You apologize and ensure that your neighbor is ok, but then receive a letter from an attorney a few weeks later accusing you of negligence for not having warned the neighbor of the slippery floor. While you disagree with the accusation, it seems as though you are going to court anyway. Having renters insurance covers this type of liability and prevents you from having to pay out of your own pocket if you are sued.
• •  You may be safety conscious, but your neighbors may not. While you take the necessary measures to keep your apartment safe, your neighbor may leave the stove unattended, smoke in bed or leave the iron on. If your neighbor's wrong-doing falls under one of the named perils on your policy, you would be covered for any damage to your belongings should your at-fault neighbor not have insurance. For example, if the fire that started in their apartment creeps into your apartment and damages your belongings, your insurance would cover the damage to your apartment and belongings, assuming a fire is a named peril on your policy.
• •  Please note: The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions expressly stated in any contracts of insurance.Renters policies are written by non-affiliated insurers through GEICO Insurance Agency, Inc. Some discounts, coverages, payment plans and features are not available in all states or in all GEICO companies. See geico.com for more details. Government Employees Insurance Co-GEICO General Insurance Co-GEICO Indemnity Co-GEICO Casualty Co GEICO: Washington DC 20076. (C) 2009 GEICO

Renters insurance is very similar to homeowners insurance except that it applies to possessions on rental properties. Renters insurance also applies to businesses that rent their office or retail space and the products or materials housed in their rental space.

Often, if you have any type of existing insurance, such as car insurance, your existing provider can extend your coverage, but shop around to make sure that you're getting the best rental insurance for your needs. And even if you have insurance, it's a good idea to protect your possessions in every way that you can, such as a fireproof and flood proof safe.

You can make sure that you get the best coverage and the best deals on your renters insurance by considering the following:
1. Get your renters insurance from the same company that insures your vehicle.
2. Get business renters insurance for properties that you rent for office space.
3. Know what types of damage your renters insurance covers.
4. Catalog your possessions or materials housed in the rental space and protect it in case of damages.

Action Steps
The best contacts and resources to help you get it done

Ask your auto insurance provider about extending coverage

Cheap renters insurance is often available from your auto insurance provider if they also offer renters insurance.

I recommend: Ask the company that provides insurance for your vehicle if they also offer renters insurance for better apartment interest rates, and if you can receive a discount for extending your existing coverage. Allstate and Geico both offer automobile and renters insurance, and you can get a quote on their websites.

Get the right policy if you're a business that rents

Business renters insurance may be right for you if you own a business that rents its retail or office space.

I recommend: Get a business insurance quote fast online, or visit an insurance provider's business insurance options page to determine what type of business insurance is right for you. Business renters insurance is a little different from the renters insurance offered to individuals--it can protect specifically against crime, accidents, and other liabilities that may happen on business property.

Know your coverage from renters insurance

Depending on your coverage, your renters insurance may or may not cover flood damage, fire, or other natural disasters.

I recommend: Get a quote for renters insurance providers in your area and select from different coverage and premium options. Depending on your area's geography, you may be able to add flood insurance to your renters insurance coverage, though it's not typical. Some providers, like Allstate, offer to not only add flood insurance but also to personalize with coverage for cash, satellite dishes, and other specific items.

Be proactive in safeguarding your possessions even with renters insurance

To make sure that your possessions stay protected, document all of your possessions with a video or photos, and keep documents in a fireproof safe.

I recommend: Even after setting up renters insurance, it's a good idea for your home or business to protect valuable or important documents with a fireproof and floodproof safe. You can also get jewelry safes that will safeguard against burglary as well as fire and smoke damage to your valuables and heirlooms. Purchase a combination safe large enough to accommodate documents, bonds, money, or even files.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When documenting your possessions in case of damage or destruction, store the documentation both in hard copy kept in another location and online with a web-based photo storage service to ensure that you can retrieve the documentation when you need it.
• •  Be aware that renters insurance is a unique type of home insurance in that it does not cover damage to the actual structure of the building. Also, insurance does not cover any damage due to neglect, so speak with your lessor about any concerns you have about the safety or integrity of rental properties.

With the large number of individuals and families who rent a home or business facility, it's no surprise that many insurance providers consider including renters insurance in their services. Whether you are an independent agent or broker, there are specific guidelines required in order to sell renters insurance for business or apartment tenants.

Because every state has its own renters insurance education and training requirements, it's critically important for you to understand and meet those specifications. Once you've identified which state you would like to practice in, you should look for training programs that can help you successfully obtain a state license in personal line insurance. In addition, you should also consider the following:

1. Whether or not you are or planning to provide renters insurance as an independent agent or broker.

2. What other companies you will be competing against.

3. What your competitors offer in terms of rates and products and who offers the cheapest renters insurance.

Action Steps
The best contacts and resources to help you get it done

Obtain renters insurance information for your state

Contact your state's insurance department to learn the licensing requirements. Make sure you are also aware of any required pre-licensing courses that you must take as well as the amount of training hours you must complete to receive a license in renters insurance.

I recommend: Check the website for the National Association of Insurance Commissioners to receive renters insurance business information pertaining to your state. The Bureau of Labor Statistics provides information on renters insurance education and training as well as an industry overview and the requirements for licensing.

Train for your business renters insurance exam

After you obtain your state's guidelines and other industry information, sign up for an online preparation course to help you get ready for your licensing exam. These online course offer practice questions similar to the ones on the actual exam. In some cases, the training questions come directly from previous exams.

I recommend: Insurance License Training offers fully accredited and state-approved classes to help you obtain a state license in personal line insurance. Kaplan Financial offers a variety of resources for renters insurance brokers, including pre-licensing exams.

Decide how you would like to provide renters insurance

Learn as much as you can about your career opportunities and compare your options. The way you set up your business will depend on the type of agent you want to be based on your research.

I recommend: Learn more about Becoming an Insurance Agent and the differences between working as an independent agent and working as a broker. You may also want to consider working as a captive agent. The Captive Insurance Companies Association (CICA) provides information on captive insurance, including career opportunities in apartment and business rental insurance and conferences help you learn more.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Due to the unique nature of renters insurance, make sure you are aware of the potential legal aspects you may face. You may want to review the laws in your state regarding tenant and landlord relations.

If you work for or run an insurance company and you're considering adding rental insurance as part of your services, you'll benefit from learning renters insurance key terms. From knowing what's covered by renters insurance, known as "named perils," to telling the difference between cash value and replacement value policies, you'll be able to talk with confidence to prospective insurance buyers about renters insurance when you're familiar with many renters insurance key terms.

Action Steps
The best contacts and resources to help you get it done

Named perils

A renters insurance policy covers against damages and losses caused by very specific circumstances. A list of what a renters insurance policy covers against is known as named perils.

I recommend: Geico explains named perils and lists the most common perils renters insurance provides coverage against.

Actual cash value

Some renters insurance policies are actual cash value policies. This means that the insurance company will replace stolen, lost or damaged possessions for a cost that deducts usual wear and tear on each item.

I recommend: Metropolitan Life Insurance Company gives a thorough explanation of actual cash value in regards to renters insurance.

Replacement cost

The other type of renters insurance policy is known as replacement cost coverage. With this type of policy, items lost, stolen or damaged are replaced at the value of the item, without subtracting wear and tear.

I recommend: Insure.com provides a brief description of renters insurance replacement cost coverage.

Liability protection

Most renters insurance policies include some type of liability protection. This protects the policyholder from any possible litigation should someone be injured on the rented property and decides to sue the renter.

I recommend: Find an explanation of liability protection as used in renters insurance at MSN Money.

Theft limits

Most renters insurance policies place a limit on the value of certain items. For instance, the value of a diamond ring may be valued at more than silverware. This is known as theft limits.

I recommend: Georgia Insurance Information Service provides an explanation of theft limits and gives examples, with theft limits of some items listed according to most renters insurance policies.

Rider

When stolen, lost or damaged possessions exceed the limit provided by the theft limits in a renters insurance policy, a rider attached to the policy will extend the value of selected items. A rider allows a policyholder to increase the coverage amount of certain items to ensure the full value of the item will be replaced.

I recommend: Insurance Centr gives a description of what a rider is by providing examples of how and when riders are used.