Renters Coverage
Renters insurance is similar to homeowners insurance but is designed for people who rent or lease properties. It can cover apartments, entire homes, condominium units and even mobile homes. While your landlord’s policy will cover the building itself, it will not cover the contents of your space or the damages you could be sued for if someone has an accident inside your rental.
FAQs
What does renters insurance cover?
Renters coverage, sometimes referred to as tenant insurance, has three core coverage parts: personal possessions, liability and additional living expenses. Keep in mind that renters insurance does not cover the actual structure you live in; that is the landlord’s responsibility.
- Personal possessions are the contents of your rented dwelling. Examples include: furniture, clothing and electronics. Each policy will include covered causes of loss, like vandalism, fire, falling objects and theft that your possessions are insured against. This coverage part can help you pay to repair or replace your damaged items.
- Liability can help protect you if you are sued for an injury or other damage incurred by other people at your rental dwelling. It can also pay for damage that you, your family and your pets cause to others. If the damages or injuries are due to a maintenance issue, coverage would likely come from your landlord’s insurance policy. For example, if a guest falls inside your rental due to poor lighting, your renters insurance could help compensate her for her injuries, or if your dog tears up a neighbor’s garden, your renters insurance could help cover the damages.
- Additional living expenses can help you pay for temporary housing if you your rental becomes uninhabitable due to a covered cause of loss. This can include hotels, temporary rentals, meals and other expenses you would not have incurred if your rental was inhabitable.
What doesn’t renters insurance cover?
Like other types of insurance, renters coverage wasn’t designed to cover everything. Below are some of the common exclusions found in renters insurance.
- Earthquake is usually excluded from renters insurance but can often be purchased as a standalone policy.
- Unusually expensive and valuable items will likely need to be covered by a valuables floater. High end electronics, fine jewelry, antiques, art and musical instruments are examples of items that ought to be insured beyond what the standard renters insurance offers.
- Flood is typically excluded from renters insurance but can often be purchased as a standalone policy.
Most renters insurance policies also do not cover losses caused by the tenant’s own negligence or intentional acts.
Actual cash value versus replacement cost
Renters insurance can have one of two methods for valuing your items, replacement cost or actual cash value.
- Replacement cost is the full cost to replace the damaged items with new ones.
- Actual cash value covers your belongings at their current market value (the cost new, less depreciation).
Do I need renters coverage?
Renters insurance is not legally required but check your rental agreement or lease as your landlord may require you have this coverage. It is important to remember that if you lose all of your clothing, furniture, electronics and other possessions in a fire, your landlord is not responsible for the loss. In addition, you can’t control how careful your neighbors are. Open security gates, wild parties and letting strangers into the building are all things that could result in a loss for you, even if you didn’t cause them. It may be beneficial to create an inventory of the belongings you store in your rental to help assess the value of your things. This can help you determine how much coverage you need but can also assist in showing you just how much you would be out if you lost your possessions.
What if I have roommates?
Renters insurance will not cover your roommate’s personal possessions, liabilities or temporary living expenses unless your roommate is on your policy. While splitting the cost of a renters insurance policy might seem like a good idea, it is often better to have your own coverage. Your roommate might have more expensive items than you, increasing the policy premium. Likewise, any claims would be on your loss history, even if they came from your roommate.
What does renters coverage cost?
Compared to homeowners insurance, renters insurance is relatively inexpensive. Of course, premiums are based on the amount of coverage you elect to purchase and the deductibles you select. Other factors that can affect renters insurance cost include: your location, the number of units in your building and the types of security measures you have in place (like fire and burglar alarms). You may be eligible for bundle discounts if you have more than one line of coverage with the same insurance carrier so be sure to check with you agent.