Want to protect everything in your rental home?
Renters insurance is one of the most underused forms of insurance in America. Many renters assume their landlord's policy provides coverage for them…
Here's the problem:
Landlord insurance only covers the building itself. Every single thing inside -- your furniture, electronics, clothes, and other belongings -- are completely unprotected without renters insurance.
And what really gets me...
43% of renters don't have any insurance at all. That's millions of people gambling with thousands of dollars of their possessions every single day.
The good news? Renters insurance is one of the cheapest and easiest types of insurance to get. It also provides far more coverage than most people realize. The easiest way to compare providers and policies is by getting online renters insurance quotes. These are available from most providers in a few minutes and show what coverage and rates are available today.
In this guide, I'll cover the entire renters insurance coverage spectrum. You'll learn exactly what types of losses are covered (and aren't covered) under renters insurance.
What you'll discover:
Personal Property Coverage: The Foundation
Liability Protection: More Important Than You Think
Loss Of Use Coverage Explained
Additional Coverage Options Worth Considering
Personal Property Coverage: The Foundation
Personal property coverage is the bread and butter of most renters insurance policies.
This coverage protects all your belongings if they're damaged, destroyed, or stolen. Furniture, electronics, clothing, jewelry, sports equipment, everything in your rental is covered.
But here's what most people don't realize...
Your belongings are covered even when they're not in your rental. If someone breaks into your car and steals your laptop, renters insurance covers it. If your luggage gets stolen while you're on vacation, renters insurance covers it.
Pretty cool, right?
The average renters insurance policy only costs $174 per year. That's less than $15 per month to protect thousands of dollars of your belongings.
Replacement Cost vs. Actual Cash Value
Here's where things get interesting...
There are two types of personal property coverage you should know about:
Replacement cost coverage pays you what it costs to buy a new replacement today. If your 3-year-old TV is destroyed, you get enough money to go out and buy the same TV brand new.
Actual cash value coverage pays you the depreciated value of your item. The same 3-year-old TV would likely only be worth half of what you paid for it today.
Replacement cost policies cost a little more per year, but they're worth the price. Nobody wants to get paid $300 for a TV that now costs $800 to replace.
Liability Protection: More Important Than You Think
Liability coverage is probably the part of renters insurance most people skip reading.
That's a mistake.
Liability coverage protects you when someone gets injured at your place or you accidentally damage someone else's property. It covers things like your friend tripping over your rug, your dog biting a guest, or accidentally flooding your downstairs neighbor's apartment.
Without liability coverage, you'd be paying for medical bills, legal fees, and property damage out of your own pocket. With 44.1 million renter households in the United States, liability claims occur every single day.
Most policies provide liability coverage starting at $100,000 with options to increase to $300,000, $500,000, or even higher. The cost of higher limits is usually only a few dollars per month more.
Medical Payments Coverage
This is a small subset of liability protection, but it's important...
Medical payments coverage pays for small injuries to guests at your rental. It applies regardless of who is at fault. Someone cuts their hand in your kitchen? This coverage would pay for their emergency room visit.
Limits are typically between $1,000 and $5,000 per occurrence.
Loss Of Use Coverage Explained
Ever wonder what happens if your rental home becomes uninhabitable?
Loss of use coverage (also called additional living expenses) comes into play when you can't live at your rental due to a covered loss such as a fire or water damage.
Loss of use coverage pays for hotel bills, restaurant meals above your normal food budget, pet boarding fees, and storage unit rentals.
Here's the thing:
Loss of use coverage is typically up to 20-30% of your personal property coverage limit. So if you have $30,000 in personal property coverage, you'd typically have $6,000-$9,000 to cover temporary living expenses.
Additional Coverage Options Worth Considering
Standard renters insurance policies are great, but there are some items that need additional coverage:
Scheduled Personal Property
High-value items like an engagement ring, an expensive camera, or collectibles are often subject to sublimits in standard policies. Jewelry is a common example, with sublimits as low as $1,500.
You can "schedule" or list these items on your policy for full coverage. There is an extra premium for this, but it gives you higher coverage limits, coverage for mysterious loss, and waives the deductible for claims.
Water Backup Coverage
Standard renters insurance policies don't cover water damage from sewer or drain backups.
If your toilet overflows, a sink overflows and backs up into your wall, or a drain backs up from below your unit, you're out of luck without this endorsement. It typically costs an extra $20-50 per year.
What Renters Insurance Doesn't Cover
I don't want to leave you with a false sense of security, so let's be clear about what is NOT covered...
Renters insurance standard policies don't cover flood damage, earthquake damage (unless you add it), pest infestations like bedbugs, normal wear and tear, belongings of your roommate (unless they are added to your policy), and damage to the building itself.
Understanding what's not covered and what exclusions apply is important before you have to file a claim.
How Much Coverage Do You Actually Need?
Figuring out how much coverage to buy is easier than it sounds.
Start by doing a home inventory. Walk through your rental and make a list of what you own, when you bought it, and how much it cost. Photograph or videotape everything. It will make filing a claim infinitely easier if the need arises.
Most renters need between $20,000 and $40,000 in personal property coverage. If you have more expensive furniture, lots of electronics, or have valuable collections, you may need more.
Getting The Right Policy
Shopping for renters insurance is one of the simplest insurance purchases you can make.
Compare quotes from multiple companies. Look at premium costs, coverage limits, deductible amounts, available discounts, and customer service ratings. Most insurers offer discounts for bundling with auto insurance, having security systems, being claims-free, and paying annually instead of monthly.
Don't just pick the cheapest option. Be sure you're buying enough coverage for your situation.
Final Thoughts On Coverage
Renters insurance is one of those "shoulda woulda coulda" purchases that most people wait until it's too late to buy.
For less than the cost of a couple of coffees each month, you can protect everything you own and be covered against catastrophic liability claims. The peace of mind alone is worth it.
Whether you're renting an apartment, condo, or house -- proper coverage is critical. Spend 20 minutes getting quotes, comparing your options, and getting the right coverage.
Your future self will thank you.
