What is Renters Insurance & What Does it Cover?

Renting Tips
Stephany Lamas

July 21, 2022
7 mins read

Most people are familiar with the concept of home insurance, but renters insurance tends to be less understood. 

For some renters, having insurance is just as crucial as for homeowners. 

It’s a mistake to assume that their landlord’s insurance will cover their belongings in the event of a fire or burglary. Let’s break down what renter’s insurance is and why it’s so important.

What is renters insurance?

Renters insurance is a type of insurance specifically for people who rent their homes. Renters’ insurance covers the contents of the rental unit, such as furniture, clothing, electronics, and other personal belongings, and liability coverage if someone is injured in your home or you are sued for damages.

Renter’s insurance typically only costs a few dollars per month and protects you from financial loss if your home is damaged or destroyed by fire, theft, or other covered events like liabilities. For example, if a visitor slips and falls in your apartment, your renter’s insurance would pay for their medical bills. 

While tenants are not always required to have renters insurance, most apartment complexes do require it, and even if they don’t, it’s a good idea to spend a couple of dollars per month to have coverage in an unexpected disaster. Otherwise, you could risk losing everything you own. 

What does renters insurance cover?

You may not always be able to prevent certain situations, such as theft, a break-in, or a visitor’s injury, but that’s where renters insurance benefits you. 

Personal property coverage

Personal property coverage protects your belongings in the event of damage or theft, and the cost to repair or replace your belongings, such as clothing, furniture, and electronics, up to the limits of your policy. 

For example, this coverage may help you pay for the cost of replacing your furniture and clothing destroyed by a fire, or if your television is stolen from your home, the personal property coverage in your renter’s policy can help pay to replace it.

You will have different options when selecting personal property coverage. Here are a few things to note: 

  • Create an inventory of your belongings in your rental to determine the value of your items. Once you know the value, you can determine a coverage limit appropriate for you. You don’t want to set a coverage limit too low, and you don’t want to pay for more than you need. 

  • Decide what type of personal property coverage to purchase. A policy that provides actual cash value protection typically covers belongings up to their current market value while taking depreciation into account. A policy that includes replacement cost coverage may help you pay to replace your items at today’s retail prices after a covered loss.

Personal property coverage may not protect everything you own. Certain types of belongings, such as jewelry or a coin collection, have limited coverage under a standard renters insurance policy.

You may be able to add additional coverage, called Scheduled Personal Property Coverage, to your policy to help protect your valuables.

An insurance agent can help you determine whether this coverage makes sense for your situation. Always read your insurance policy carefully to understand what may or may not be covered.

A coverage limit will apply, meaning your policy will pay the maximum amount for personal property losses. It’s good to know that personal property coverage is typically subject to a deductible. 

A deductible is the amount of money you must pay toward the covered item’s repair or replacement before your insurer helps pay for the loss.

A lower deductible policy costs more money monthly since you are responsible for less repair or replacement money if you use the policy. Higher deductible policies are cheaper since you’ll pay more towards the repair or replacement. Choose a deductible you can comfortably afford if you ever need to use your policy.

Liability coverage

Liability coverage protects you if you are held responsible for damages to someone else’s property or if someone is injured while on your property. This coverage can help protect you from paying out of pocket if you’re found legally responsible for injuries or damage to their property.

For example, suppose your kid accidentally throws a ball through a neighbor’s window, or you’re held accountable for medical bills after a visitor trips and falls in your rented home. In that case, liability coverage can help cover the costs.

Limits apply to the amount your insurance policy pays out after a covered loss, similar to other coverages. 

Read your policy carefully to understand how much coverage it provides and ensure it fits your needs. Your insurance agent can help you adjust the limits if you need additional coverage.

Additional living expenses

Renters’ insurance typically includes coverage for additional living expenses. This coverage can help cover the cost of temporary housing, like hotel bills if your home is damaged and uninhabitable or food expenses above the amount you would typically spend.

Check and read your policy thoroughly to learn how much coverage you have for additional living expenses and review the risks your policy may cover.

How to file a renters insurance claim

Here are some tips if you need to file a renters insurance claim that will help you through the process. Keep in mind that your claim process may vary depending on the extent of the damage:

  • Contact your insurance agent to report the claim as soon as possible
  • Talk to your insurance agent about any emergency repairs that you may need to protect your items from further damage.
  • Document damaged items in writing, and take clear photos and videos of the damage before repair work begins.
  • Your insurance agent will ask questions about the damage and answer any questions you may have about the process.
  • Discuss your policy’s coverage and limits with your insurance agent to understand what applies to your situation.
About the Author
Stephany Lamas

Stephany joined the RentReporters Marketing Team in 2021.

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