You can choose to rent almost any home. Some people might decide they don’t want a full-size home, but they might not want an apartment either. In these cases, they might decide to rent a townhouse. If you are one of these people, then you might find your townhouse a great way to have the perks of a house without some of the obligations. However, you still have assets and liabilities that need the benefits provided by renters insurance. Take some time now to learn how to apply your coverage to your townhouse, specifically.
What is a Townhouse?
Townhouses are not freestanding dwellings. They share walls with other homes (usually on two sides), and often they are at least two stories high. They are different from condominiums because, unlike condos, they are independently owned. There is no condo association that oversees the property. A townhouse might have a small yard attached, though this will vary among properties.
If you rent your townhouse, you won’t have to insure the structure itself. Still, tenants need several types of renters insurance to cover their insurable property and liabilities.
Most of the time when you rent a home, your landlord will require you to buy renters liability insurance. Coverage applies to the harm that your negligence or mistakes cause to others who don’t live in your house. Policies usually cover several types of losses that might be your fault and impact guests, neighbors or even your landlord.
- Bodily injury liability coverage pays when someone gets hurt in your home. For example, if someone slips on a rug, gets hurt and sues you, then coverage can pay their medical bills and other recovery costs.
- Property damage liability coverage kicks in if you damage someone’s belongings. One prime place coverage can help you is if you damage the townhouse structure. The policy will compensate the landlord for the damage you caused.
- Accidental medical payments coverage helps someone who gets hurt in your house regardless of whether an accident was your fault. It might help you avoid a bodily injury liability lawsuit.
- Legal assistance can help you cover your court costs or lawyer's fees if someone sues in a liability suit.
When deciding how much liability insurance to buy, first see if your lease lists any requirement. Keep in mind, though, that you can often increase your liability limits to your own benefit. The more liability insurance you have, the less you might have to pay out of pocket for an expensive liability suit. It often is a good idea to buy coverage to match your net worth, if possible.
If you want liability protection beyond the limits of a standard renters liability policy, then consider investing in umbrella liability coverage. It provides additional coverage of significant value. You can file a claim on this coverage once a claim exceeds the limit of your standard policy.
While you won’t have to insure the townhouse itself, you still want to buy insurance for your belongings. Any accident in the house could damage your property as well as the house. Possessions insurance will help you receive compensation for such losses.
Your policy will often pay when damage arises from a variety of hazards like fire, theft or vandalism. However, restrictions will apply, so always check the finer points of your policy.
- Any property not belonging to you won’t have possessions coverage.
- A deductible will apply to most settlements. Your insurer will subtract the deductible cost once they appraise the value of your loss.
- In most cases, your policy will pay actual cash value for damaged possessions. An item’s cash value is its used value, not the value of a new item.
- All policies have a maximum limit they will pay. However, they might institute other sub limits for certain items.
- Some special items, like jewelry or sporting goods, might not have coverage. However, you can often insure these items for their full value by investing in a scheduled item rider.
If you can prove that damage was someone else’s fault, then you might be able to file for your losses on their liability insurance. However, possessions coverage is important to have on your own policy, nonetheless.
Loss of Use Insurance
Sometimes, an accident or hazardous event in your townhouse might force you to move out for a time. If your insurance policy will cover the damage, then it might also cover you for loss of use.
A claim on loss of use coverage can help you cover certain living expenses until you can return home. It might pay for meals, hotel bills and certain other necessities. The policy will impose various restrictions on what costs it will cover. However, you can ease at least some the burden that might go with your displacement.
Renters insurance can provide a variety of customizable perks within, and in addition to, your standard coverage. Your agent can use their expertise to help you determine the coverage that’s best for your townhouse. Therefore, you'll have coverage that protects you adequately at all times.
Also Read: How To Know If You're Paying Too Much For Renters Insurance
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