Renters insurance is a form of property insurance that covers losses to personal property and protects the insured from liability claims.
This includes injuries occurring in your rental that aren’t due to a structural problem. Injuries due to structural problems are your landlord’s responsibility. Renters insurance protects anything from a studio apartment to an entire house or mobile home.
Even if you’re just starting out or living in a place for a year, getting a renters insurance policy—probably the least expensive and easiest-to-obtain insurance you’ll ever own—could be a smart investment.
You may not think you’ve got anything of great value, but you probably do—more than you could comfortably afford to replace in the event of a bad burglary or fire.
In addition, no matter how careful you may be with your own apartment (the sort of residence most renters have), you can’t control your neighbors. They can leave your security gates open, buzz ill-intentioned strangers into your building, or fall asleep with a cigarette in hand and start a serious fire.
While your landlord’s property insurance may cover the building itself, the insurance will not cover the contents of your apartment, nor will it cover the damages for which you could be sued by someone who had an accident within your apartment or rented space.
What Renters Insurance Covers
Renters insurance has three basic coverage components: personal possessions, liability, and additional living expenses.
This coverage is for the contents of your rented dwelling. Typically, named perils include fire, theft, vandalism, plumbing and electrical malfunctions, certain weather-related damage, and other named
hazards. More specifically, a standard HO-4 policy, as it’s called, is for renters and covers losses to personal property from events such as hail, explosion, riots, damage caused by aircraft or vehicle,
vandalism, and volcanoes, among others. Floods and earthquakes, however, are not covered and require separate insurance policies.
Liability coverage protects you up to a certain amount in the event that you get sued for an injury or other
damages incurred at your home by other people. It also pays for damage that you, your family, or your pets
cause to others. It pays any court judgments as well as legal expenses, up to the policy limit, which usually
starts at $100,000 and can go up to $300,000. For coverage higher than that, you need to buy an umbrella policy.
Additional Living Expenses
This coverage means that if your unit becomes uninhabitable due to one of the covered perils, you’ll be
provided with some money to pay for temporary housing. Hotel bills, restaurant meals, temporary rentals, and other expenses incurred while your dwelling is being rehabbed are all included.
What Doesn’t Renters Insurance Cover?
You should be aware that there are many things that most policies do not automatically cover: backup of sewage into your residence, earthquakes, floods, and other “acts of God.” These things can be covered for an additional premium if you feel you are at significant risk.
Also, if you have any unusually expensive or valuable items, such as high-end electronic equipment, fine jewelry, musical instruments, or an important collection of art and antiques, you may need to purchase
floater insurance in the form of a rider to cover these items. In addition, a separate rider might be needed to cover wind damage in certain areas from hurricanes.
Renters insurance policies also do not cover losses caused by the tenant’s own negligence or intentional acts.
How to Get Renters Insurance
- Assess Your Insurance Needs
- Choose an Insurance Company
- Start the Application
- Fine-Tune Your Policy
- Pay for Your Policy
“What is renters insurance ?” is a fair question, but a better question might be, “Why should I have renters insurance?” The answer: It keeps accidents and annoyances from becoming bank account and budget killers. Remember that your landlord’s insurance protects their building, but it does not cover your stuff ever. Only you can protect yourself and your possessions.