What Is Renters Insurance?
Renters insurance is a form of property insurance. It covers the policyholder’s personal property and protects them against liability claims.
Why Do I Need Renters Insurance?
Why do you need renters insurance? Because it’s an easy yes and significantly less expensive than you might think. It not only protects you and your belongings, but it also allows the landlord and other tenants to recover any damages where you (or your pets) are at fault.
A quick personal testimony from the author…
On a personal note, I can’t recommend it enough. When I got my first apartment, I bought a policy on a whim. It was super affordable, a friend had recommended it, and I thought, why not?
Thank goodness I had. You have no idea how thankful I was for it after coming home to find my rescue cat had lost its mind and shredded several very large, very expensive window screens. That “there goes my paycheck for the foreseeable future” moment was salvaged by the fact that I had renters insurance, and my landlord was able to collect from my policy.
Yup, I was sold on it for that reason alone. And several years later, when my apartment was broken into, I was very glad I’d kept up on the policy. All the electronics were gone, dishes smashed and broken, clothes ruined… it was a nightmare. I went from thinking I really didn’t have much stuff to, “Oh my gosh, how am I going to replace everything?”
The out-of-pocket cost was beyond prohibitive. But, with my policy, I was able to replace my laptop and other belongings without any hassle. My roommate at the time was not as fortunate. She was left starting from scratch. Her situation was absolutely heartbreaking and made worse by the fact that it was completely avoidable.
To say I’m a big proponent of getting coverage is an understatement. My best friend would agree. She woke up one morning to sirens after one of her neighbors had left his grill running too close to the wall. Her entire apartment complex burned down. Luckily, she didn’t have to foot the bill for a place to stay while she looked for a new apartment, and once she did, she was able to re-furnish it and replace her belongings without having to eat the cost.
Renters insurance is a seriously simple thing you can do today that “future you” will thank you for.
Is Renters Insurance Mandatory?
It depends. Larger rental properties will often list renters insurance as part of their lease requirements, whereas smaller ones might not. Owning animals may also trigger the requirement, so check with your prospective landlord.
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What Does Renters Insurance Cover?
That also depends. Renters insurance consists of three different types of coverage: loss of use, personal property, and personal liability. Below, we break down what each facet does and some of the events generally covered, but please note individual policies will vary.
Personal Property (Commonly called a standard HO-4 policy)
This covers your belongings in the event of:
- Fire,
- Theft,
- Vandalism,
- Riots / Explosions,
- Electrical or Plumbing issues,
- Some weather-related losses (floods and earthquakes require a separate policy or endorsement).
Loss of Use
If your dwelling becomes uninhabitable due to one of the events covered in your policy, the insurance provider will compensate you while you’re displaced for things like:
- Hotel bills,
- Restaurant meals,
- Temporary equipment rentals,
- Other expenses incurred for the duration.
Personal Liability
Personal liability coverage protects you if you are sued for damages to the dwelling or for injuries incurred by people while at your dwelling. Whether caused by you, your family, or your pets, your provider will pay any court judgments and legal expenses up to the policy limit. For higher coverage amounts, umbrella policies are available.
That said, renters can choose between two different types of renters insurance; actual cash value and replacement cost.
- Actual Cash Value: Pays the amount any given item is worth at the time it was damaged. If your couch is fifteen years old, you will be compensated for its current worth, not what it was when you bought it new.
- Replacement Cost: Pays the full amount for replacing an item. This type of policy is usually more expensive because no matter how old your couch was, you will get a new one.
How Much Is Renters Insurance?
Policies generally start at $10 – $17 per month and will vary by coverage type, deductible, company, and location. Note that many insurance companies will bundle it with existing policies, such as auto, for a discounted rate.
How Do I Get Renters Insurance?
Shop around and get at least three quotes from companies that take the time to answer your questions. These are the people you’ll deal with if your life takes a turn for the worse, so you want them to be personable.
And, to make things super easy, here’s a list of The Best Renters Insurance Companies compiled by Forbes.
But, don’t just take their word for it; ask friends and relatives who they recommend. You can also contact your state’s insurance department for more information.
Ready to Rent?
If so, hook up with AptAmigo! Have more questions about renters insurance? We can help you with that and more. After a few quick questions, our team of experts will hit you back with a list of options for you to choose from. Don’t stress; save time and money by letting us do the legwork. We can assist you throughout the entire rental process because that’s what amigos are for.
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