A Comprehensive Guide to Renter’s Insurance

Renting an apartment, condo, or house as opposed to buying outright makes a lot of financial sense for a lot of people. Not only does renting typically come with minimal maintenance responsibility, it can also prevent you from becoming “tied down” by a piece of property.

Still, just as you should have homeowner’s insurance as a homeowner, you should have renter’s insurance as a renter.

By having a better understanding of what renter’s insurance entails and what it does (and does not) cover, you can make sure your belongings are protected whether you live in a rented room, apartment, duplex, or anything in between.

What’s Covered Under Renter’s Insurance

The purpose of renter’s insurance is to provide protection and coverage for your personal belongings that you store within a rented property or on an exterior patio, balcony, or porch.

Depending on the limits of your coverage, a renter’s insurance policy may provide protection for personal items damaged, lost, or destroyed by:

• Fire
• Vandalism
• Theft
• Natural disaster

For example, if you live in an apartment building and there is a fire in your neighbor’s unit, any items (electronics, clothing, furniture, etc.) damaged by the fire or smoke from the fire can be replaced by your renter’s insurance policy.

Specific coverage and limitations can vary from one policy to the next, but you will generally have to pay a deductible before your coverage will kick in. For instance, if you have a $500 deductible and $2,000 worth of your belongings are damaged in a fire, your renter’s insurance should kick in and cover the remaining $1,500 of damage after you’ve paid your deductible.

Renter’s insurance may also include some liability protection in the event that a guest is injured in your rental unit.

What’s Not Covered Under Renter’s Insurance

Some things may not be covered by a traditional renter’s insurance policy, or may require an additional “rider policy” to be included. Damage from flooding is a common limitation of a typical renter’s insurance policy, so if you live in a flood plain, you may want to purchase flood protection separately for your added peace of mind.

Furthermore, keep in mind that renter’s insurance may or may not cover damage to your property caused by yourself or others. For example, if you throw a party in your apartment and somebody accidentally knocks over your flat-screen television, it is unlikely that your renter’s insurance policy will pay to repair or replace your TV.

Always read through the fine print in a renter’s insurance policy before signing any paperwork or paying your premium to ensure that you fully understand the limitations of your coverage. Doing so will help to avoid surprises down the road.

What to Expect from a Cost Perspective

Renter’s insurance is extremely affordable, and it’s not uncommon for renters to pay well under $200 for a year of coverage. The specific costs of your policy will depend on where you’re located and the exact coverage you need.

You can also lower your premium cost by increasing your deductible, but you should be aware that this means you’ll need to shell out more money upfront if you need to make a claim before your coverage will kick in. On the other hand, lowering your deductible may cost you more per month, but will mean you have less money to come up with if you need to use your coverage.

Overall, having renter’s insurance is strongly recommended and even required by some property managers and landlords. Protect your belongings and enjoy added peace of mind as a renter by making sure you have this type of coverage.