Renters Insurance Basics: What Does It Cover?

For most people, homeowners insurance and auto insurance are no-brainers. Lenders typically require homeowners insurance and the law requires car owners carry auto insurance. Renters insurance, on the other hand, is not required by anyone. In fact, it is one of the most under-utilized types of insurance despite its very valuable coverage.

Many renters assume they are covered under their landlord’s insurance policy. Such is not the case. Landlords do carry insurance, but that coverage is only for structural damage to the building. Personal property belonging to tenants is not covered under these policies. That means that if a fire were to burn down your apartment building, your landlord would be covered to rebuild, but you would be left with nothing.

Renters insurance fills that void of coverage and protects your personal property from theft or damage. Between furniture, clothes, electronics and household appliances alone, you could be out thousands of dollars without it. Additionally, you might have to incur further living expenses while your home is being repaired or rebuilt. Renters insurance covers these additional living expenses. A basic renters insurance policy costs about $15 to $30 a month on average, according to the National Association of Insurance Commissioners.

Besides providing protection for your personal property, renters insurance also provides liability protection. That coverage extends to injuries and other damages visitors sustain while on your property as well as damage you may inadvertently cause to the building. For example, if a guest in your home falls and gets injured, a renters insurance policy would cover the costs of the medical bills as well as legal representation if you get sued.

Anyone who rents a home should have renters insurance, but some people may need more than others. If you own a lot of high value property such as jewelry or artwork, you will need to get additional coverage for those items to be fully protected. Additionally, owners of certain breeds of dogs, such as pit bulls, may need to buy added liability coverage to cover any damages caused by the animal. Consult your insurance agent to determine what level of coverage you need.