What does renters insurance cover?

If you’re a renter, your personal possessions are just as important as a homeowner’s, but did you know they may not be covered? Your landlord likely has a policy on your unit, but that policy doesn’t protect your belongings, your liability, or provide you with a place to live if your unit is damaged.

Renters insurance is an important insurance policy that protects your belongings, can limit your liability, and can even provide you money to stay elsewhere if your current place is uninhabitable. Learn more about this inexpensive policy and what it covers.

• What does renters insurance cover?
• What doesn’t renters insurance cover?
• Who needs renters insurance?
• How much renters insurance do you need?
• How to buy renters insurance

What does renters insurance cover?

Just like a homeowners insurance policy, you can choose between multiple types and levels of coverage with renters insurance. Within each coverage type, you’ll have a choice of coverage limits and a deductible. The coverage limit is the maximum amount your insurance will cover. Your deductible is how much you have to pay out of pocket before your insurance kicks in.

These are the coverages in a standard renters insurance policy:

• Personal property coverage — This covers all your personal belongings. Items like your clothes, electronics, sporting equipment, and furniture would all be protected in the event of theft, fire, or other covered perils under this type of policy. This coverage can also help protect your items when they’re outside your home. For example, a laptop stolen from your vehicle could be covered by your renters insurance, depending on your insurer and policy.
• Personal liability coverage — This coverage helps protect you from expensive legal fees if you, a household member, or your pet cause injury or property damage to another person. If you have significant assets you could lose in a lawsuit, liability coverage will be an essential component of your insurance policy.
• Loss of use coverage — This coverage, also called additional living expenses coverage, can help pay for housing expenses if your home or apartment becomes uninhabitable due to a covered event. This can include hotel stays and meals at restaurants.

What doesn’t renters insurance cover?

Just like with homeowners insurance, a standard renters insurance policy won’t cover everything. Here are some things your renters insurance policy won’t cover:

• Flooding — Flood insurance is excluded from standard coverage. If you live in an area prone to floods or hurricanes, you should strongly consider getting flood insurance, especially if you have a ground-floor unit where water damage is likely.
• Earthquakes — Earthquake coverage is excluded from standard renters insurance policies. You can typically add it on as a rider to your existing policy or get a separate policy if you live in an area where there’s a higher chance of earthquakes.
• The physical structure of your rental — Your rental unit itself isn’t covered by your renters insurance. If your roof collapses, your landlord’s insurance should cover your unit, not your renters insurance policy.
• A home that you own — If you’re a renter who also owns a home elsewhere, your renters insurance policy won’t cover the home you own. You’ll need to have a homeowners insurance policy in place for the home in addition to a renters insurance policy for the place you rent.

How to get extra coverage

If you feel you need more coverage, it’s usually not hard to get. For example, if you live in an area prone to flooding, you can add flood insurance to your existing insurance policy, or you can purchase a separate policy.

It’s a good idea to contact your insurance carrier directly to learn more about your options.

Who needs renters insurance?

Anyone who rents their home or apartment needs renters insurance. If you care about your belongings and can’t afford to replace them if they’re damaged, you should consider renters insurance. Similarly, if you can’t afford a lawsuit if your dog’s leash trips your neighbor, or a hotel room for a month if your home burns down in a fire, you need renters insurance.

Your landlord may even require you to get a renters insurance policy as part of your lease. While your building is covered by your landlord’s policy, they have no responsibility to replace your belongings if the entire complex is destroyed. Renters insurance can protect you.

How much renters insurance do you need?

To determine how much renters insurance you need, take a rough inventory of your belongings. How much would it cost you to replace everything you own? You should have at least enough property coverage to replace your personal belongings. To determine how much liability coverage you need, it’s best to consider your assets and talk to your insurance agent.

For loss of use coverage, think about how much money you’d need to move into a new place if yours became uninhabitable tonight. How much would a hotel room cost in your area? How long would you have to stay in a hotel before you found a new place? Your loss of use insurance will cover the difference between your additional living expenses and your normal day-to-day expenses, up to your coverage limit. For more information on this coverage, contact your insurer.

How to buy renters insurance

Buying renters insurance is typically a straightforward process. Here are the steps you’ll need to take:

1. Create an inventory. Do a rough household inventory of your belongings to determine how much coverage you’ll need for personal property. It’s a good idea to include a cushion in your coverage limit if you’re estimating these costs.
2. Get quotes from multiple insurance carriers. Shop around and compare quotes from at least three insurance providers. Be sure to get quotes for the same levels of coverage and deductibles to get a true apples-to-apples comparison.
3. Choose an insurer. Once you’ve compared quotes, select the insurer that offers the best deal on the coverage you need. You’ll sign a contract and pay at least your initial premium at this point.
4. Notify your landlord. Send your landlord a copy of your policy if they require it.