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Your landlord may have an insurance policy for the property you rent, but the policy will probably not cover your own belongings. You may want to consider buying renters’ insurance to replace or repair your belongings if they are stolen, damaged, or destroyed.

Renters insurance, sometimes called tenant insurance, is a type of resi- dential property coverage for people who rent homes or apartments. Insurance companies can sell several types of renters’ policies in Texas, each with a different level of coverage. Two of the policy forms, the Broad Form (HO-BT) and the Comprehensive Form (HO-CT), are standardized. This means the policy language and coverages will be the same, regardless of the company writing the policy. HO-BT policies insure your property against losses specified in the policy, such as fire and theft. Losses not specified in the policy are not covered. Most renters buy HO-BT policies. HO-CT policies are “all risk” policies and insure your property against every type of loss, unless specifically excluded by the policy. HO-CT policies are more expensive than HO-BT policies because they cover more risks. Companies also may sell alternative policies or modified versions of the HO-BT and HO-CT if approved in advance by the Commissioner of Insurance. These policies are not standardized, so coverages may vary. Read your policy carefully to know exactly what it covers.

All policies have a total dollar limit. This is the maximum amount the policy will pay, regardless of the amount of your claim. Make sure you buy a policy with a high enough dollar limit to replace your property if it’s stolen or destroyed. Most policies in Texas have a deductible equal to 1 percent of the total amount of coverage. A deductible is the amount you must pay out of your own pocket before the insurance company will pay on your claim. For example, if you have a $25,000 policy with replacement cost coverage and a 1 percent deductible, you would pay the first $250 of the repair or replacement costs. The company would then pay the remainder, up to your policy’s dollar limit. Some companies may require a higher deductible for theft.

Personal property coverage pays to repair or replace your personal property, up to your policy’s dollar limit. In addition to a total dollar limit, policies may limit payments for certain kinds of property. Common limits are $100 for cash, $2,500 for personal property used for business, $500 for valuable papers, and $500 for jewelry, watches, and furs. Renters insurance also covers your luggage and other personal items when you travel. This coverage is usually limited to 10 percent of the amount of your policy or $1,000, whichever is greater.

Loss of use pays for additional living expenses, such as food and hous- ing, if you must move from your home or apartment because of a cov- ered loss. Loss of use coverage is generally limited to 20 percent of a policy’s personal property coverage. For example, if you have $25,000 in personal property coverage, your loss of use coverage would be $5,000.


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