A Guide to Renters Insurance – All You Need To Know

What is renters insurance? How does it differ from homeowners insurance? Should you get it? These are all questions most of us who rent have asked at one point. To find out the answers and more, keep reading…

What Is Renters Insurance?

Renters insurance protects your personal belongings in a rented apartment, condo, or home from liabilities such as theft, fire, and other disasters.

Landlord insurance generally covers the apartment, home or condo, other structures, and property used to service the rental such as lawnmowers. It does not cover your personal possessions as a renter such as your electronics, clothes, furniture, and more. For that, you will need your own renters insurance policy.

Renters insurance differs from homeowners insurance in that homeowners insurance is for those who own their home or apartment and covers both their personal belongings and the structure of the home. 

What Does Renters Insurance Cover?

  • Personal possessions – If your possessions are damaged, renters insurance will cover the cost of the damage up to your policy’s limits.
  • Liability – If someone is injured or their property is damaged and you are blamed for the event, your policy will cover the liability costs.
  • Additional living expenses – If your rental home becomes uninhabitable, renters insurance will pay for cover the expenses needed to stay elsewhere.

What Does Renters Insurance NOT Cover?

  • Natural calamities or “acts of God” such as earthquakes, hurricanes, backup of sewage into your residence, bed bugs or other pests and sinkholes
  • Liabilities caused by the tenant’s own negligence or intentional acts
  • Any unusually expensive or valuable items, such as high-end electronic equipment, fine jewelry, musical instruments, or an important collection of art and antiques
  • Your roommate’s possessions
  • Liabilities incurred against your car

Who Needs Renters Insurance?

  • Anyone who rents an apartment, condo or home;
  • Former homeowners who may be downsizing to an apartment;
  • College students not covered by parent’s homeowners policy.

What Misconceptions Are There About Renters Insurance?

Some common misconceptions are:

  • My landlord will replace my things if they’re stolen or damaged.” – If your personal property is stolen or damaged, it’s your responsibility to have it replaced or repaired.
  • Renters insurance is too expensive, and I already have enough bills to pay.” – The average renters insurance policy costs between $15 and $30 per month.
  • I don’t have that many valuables.” – Even a minimal number of belongings can add up to more than you realize! Think about it, if the unexpected were to happen, do you have the funds to replace everything you now own?
  • My roommate has renters insurance, so I’m already covered.” – Their policy typically only covers their things, not yours.

How Much Renters Insurance Coverage Should You Buy?

When damage or theft is covered by your renters insurance, you can make a claim for reimbursement up to your policy limits. You will be reimbursed for the amount the liability is worth minus your deductible.

Before buying your renters insurance, you first need to know the value of all your possessions — by creating a home inventory list and getting the total value. 

Once done, you can now proceed to buy your renters insurance — make sure you select limits that will cover you in the event of a total loss. Buying more coverage is more expensive, but not having enough coverage when you need it could leave you with a costly bill after a disaster.

Frequently Asked Questions

Here are a few FAQs when looking into renters insurance:

Could owning a pet cause the premium to be higher?

Having a pet could increase the cost of your renters insurance. Because a pet adds an additional liability exposure to your policy, your insurance company may charge you a higher premium to offset that risk.

Does renters insurance only cover you when you’re at home?

Some insured items may be covered if they are damaged or stolen while you are outside your rental.

How do you expedite your renters insurance claim?

A home inventory, along with photos and proof of ownership, makes it easier to file an accurate and detailed insurance claim in case your possessions are damaged or destroyed.

If I file a claim how am I reimbursed?

Most policies insure your possessions on a “replacement cost” basis which means that you receive enough funds to replace damaged items. Avoid “actual cash value” policies since they settle claims by deducting for depreciation which means you will get less and may not have enough funds to replace the damaged items.

While renters insurance may not be “mandatory”, it is certainly advised. Your personal belongings are probably more valuable than you think, so don’t gamble with them. Get the right amount of coverage with CompareFreeQuotes today!