Renters Insurance 101

Many people do not purchase an insurance policy that covers their personal possessions until they buy a home of their own—but renters still have assets to protect. Renters insurance is there to help if your possessions are damaged or stolen, includes personal liability coverage, and can even provide funds for alternative accommodations in the event that you need to relocate while your unit undergoes repair.

Coverage for your posessions

While renters may not have as much wealth tied up in their homes as people who own a house or condo, they often have quite a bit invested in the things inside those homes. Renter’s insurance can help you to purchase a new guitar if yours is stolen from your apartment or buy a replacement computer if yours is ruined by a leaking pipe. Somewhat surprisingly, renters policies also cover items that are stolen from your vehicle--even if it isn’t parked at your rental at the time of the theft.

Still ambivalent? Many renters--especially students and other young people--may not feel that they have enough possessions of significant value to warrant the purchase of a policy, but taken cumulatively, even smaller ticket items add up. Even if you don’t wear designer brands, think of the cost involved in replacing your entire wardrobe in one fell swoop, or—even if you decorated your apartment on a shoestring budget—purchasing an entire home’s worth of furniture. Carrying a renter’s policy can make it possible to restore these possessions—and along with them a sense of normalcy—after a disaster.

Liability

People often become concerned about personal liability after purchasing a house or condo, but renters can also be held financially responsible for accidents that occur in their homes. If you are sued following an event that occurred at your rental, renters insurance can help cover your legal fees as well as any damages you are required to pay.

Alternative Accommodations

In the event that a disaster renders your rental uninhabitable, renters insurance can step in and cover the cost of alternative accommodations. Whether you need to relocate to a hotel for a few nights, or find a sublet while more extensive damage is repaired, your renters policy will ensure you don’t incur additional housing costs while you are away from your home.

Damages to Your Rental

Like homeowners insurance, renters insurance can be used to cover damages to your rental house or apartment that would otherwise be your responsibility. If you accidentally leave a tap running and cause water damage to your rental, or leave a candle lit and start a fire, your renter’s insurance will step in and cover repairs--up to the amount specified in your policy.

Landlord vs. Tenant Responsibility

Many people have an inaccurate understanding of their landlord’s responsibilities and as a result, neglect to purchase a renters policy. While it is true that your landlord must maintain your rental and pay for repairs necessitated by events outside of your control, landlords are not required to replace tenant possessions that become damaged in their unit, and can force tenants to pay for repairs to their rental space if the tenant’s actions can be shown to have contributed to the damage. Renters insurance helps to cover these gaps, preventing disasters in your rental home from wreaking havoc in your bank account as well. 

Low-Cost Protection

Renters policies offer a lot of protection for a very modest price. Most policies cost between $10-$15 per month and offer—for roughly the same price as a cheap lunch out—coverage against property damage, personal liability, and relocation costs.

 

While many people put off purchasing insurance until they are ready to own a home of their own, renters can protect themselves from significant financial hardship by carrying an affordable renters policy. Like all insurance policies, renters policies vary from carrier to carrier and even individual to individual. Be sure to read both your lease and insurance policy thoroughly, and enlist the help of an independent insurance agent if you need assistance understanding your coverage.