On the surface, renters insurance is pretty straightforward: something happens to your stuff, and you get paid for it.
But that’s an oversimplification. Some of your possessions are covered. Some are covered up to a certain extent. Some things aren’t covered at all. Dogs can complicate matters.
That’s why no renters insurance policy is one-size-fits-all. But that’s okay, because, like life insurance, the renters insurance industry is ready to accommodate you with riders.
Riders are also called floaters or exemptions ("floaters" because this insurance was originally created to protect stuff being shipped via water – the more you know). Like with other insurance products, they allow you to tailor an otherwise cookie cutter policy to fit your needs.
Not all riders are appropriate for all people, but here are six you should consider when looking into your renters policy.
Scheduled personal property endorsement
Not all renters insurance claims are created equal. Consider the following:
Bad news: Your apartment building goes up in flames.
Good news: You have renters insurance! Your $1,000 engagement ring was lost in the fire, but you have $20,000 worth of renters coverage, so you can get it replaced.
Bad news: Your apartment building goes up in flames.
More bad news: You have renters insurance! But your policy has a $1,500 dollar limit for jewelry. You can’t cover the full cost of your fancy $2,000 engagement ring.
Bad news: You lose your engagement ring.
More bad news: Your personal property coverage won’t go into effect when you just lose something.
Just because something is covered in your renters insurance policy doesn’t mean the cost is fully covered, or that it’s automatically covered in all scenarios. You can protect against this with scheduled personal property endorsements.
Scheduling an item in your policy is basically calling it out for special attention. You want to up the coverage, or you want special provisions (like protecting against loss). This is helpful for big-ticket items that likely aren’t fully covered, like jewelry, furs, and art.
You’re usually not required to pay the deductible when you make a claim on a scheduled item, but it will raise your policy premiums, and you’ll have to get the items appraised.
At-home business endorsement
When you work from home, your renters insurance is doing double duty, protecting where you live and where you work. Unfortunately, many policies limit coverage items used for business purposes (as defined in the policy; for instance, "business" may only apply if it earns you more than $2,000 a year). You might have a $2,500 liability limit on business items, but a computer and a few other items can put you over the top pretty quickly.
An at-home business endorsement is similar to a scheduled property endorsement in that it provides additional coverage for certain items – in this case, business-related items. According to the Insurance Information Institute, you can usually double your standard coverage at a low cost.
Note that if you work from home, this isn’t the only rider you should consider. You might also want a liability endorsement to protect yourself if you have business-related visitors.
Replacement cost rider
There are two types of renters insurance policies.
An actual cash value (ACV) policy, or depreciated loss coverage policy, means that your claim amount is determined by how much your items have depreciated in value. If you bought a $500 couch 10 years ago and you make a claim on it, you’ll get substantially less than $500.
With a replacement cost value (RCV) policy, your claim size is determined by how much it costs to repair or replace your belongings at current prices. If that couch is stolen, you’ll get paid however much it takes to replace it (within the stated limits of your policy).
An RCV policy is the more expensive of the two policy types, but a replacement cost rider can be added to an ACV policy to allow you to make RCV claims on certain eligible property, and may even be included in the cost of the policy so you won’t have to pay more for it.
Pet damage rider
A pet damage rider simply adds a greater level of liability for, you guessed it, damage caused by pets.
Depending on your policy and your dog, you may not be covered by the normal provisions of your policy. Even with this extra coverage, there might be limitation; you may have a deductible to meet, or the losses may have to be more than your apartment’s security or pet deposits.
Another canine-related note: some dog breeds may raise your premiums, while others – pit bulls, staffordshire terriers, doberman pinschers, rottweilers, and German shepherds – may prevent you from getting a policy at all.
Identity theft coverage rider
Identity theft is a real problem. Websites get compromised, credit card information gets stolen, Yahoo loses more passwords – it happens ( a lot).
The difficulty of recovering from identity theft or fraud depends on what exactly the fraudster does. You’re usually off the hook for credit cards and bank loans you didn’t actually apply for, but if you need to pay attorney fees, send certified letters to credit bureaus, meet with notaries, or even have to take time off of work, those costs can add up. An identity theft rider can cover some or all of these additional costs so that getting your life back isn’t just as expensive as the bank loan someone tried to open in your name.
Earthquake coverage rider
Did you know that damage caused by earthquakes and floods aren’t covered by your renters insurance? The chance of loss by either is limited on where you live, but if you want that extra peace of mind, you may consider an endorsement for earthquake coverage. Your coverage will depend on the personal property limit outlined in your policy, and your deductible may be different than it is for the rest of your property.
As for flood protection? Well, you’ll have to buy a separate flood insurance policy. Them’s the breaks.
Of course, not everyone needs all of these riders. It depends on a variety of factors: where you live, your possessions, your work, and more. But if you feel like a standard renters insurance policy doesn’t quite meet your needs and you’re looking for that extra bit of protection, these popular riders are a good place to start.