The rent check you hand to your landlord every month puts a roof over your head, but unfortunately it doesn't protect everything under that roof – all your clothing, books, electronics, furniture and other possessions – from fire, damage or theft. For a few bucks a month, renters insurance, also called tenant's insurance, gives you peace of mind that if a disaster strikes, you won't have the expense of replacing damaged or stolen goods yourself.
A renters insurance policy covers all your possessions, including clothing, electronics and furniture in the property you rent. Depending on your policy, it may also cover the cost of repairing or replacing belongings up to a specified limit, liability for damage to someone else's property and medical bills. Some policies cover additional living expenses if the property you rent becomes uninhabitable.
Why Do You Need Renters Insurance?
Most apartment complexes and landlords insure only damage to the property itself. To protect your own personal belongings in case of fire, theft or damage, you'll need your own policy, or renters insurance. You can tailor renters insurance to suit your needs. Personal property coverage insures the cost of repairing or replacing your possessions up to a limit specified in the policy. Generally, basic renters policies cover $30,000 to $50,000 for apartments and around $100,000 for private homes.
Renters insurance also provides liability coverage. This means if you leave your bath water running and it floods the bathroom and damages the downstairs tenant's ceiling, your insurance covers the cost of repairs. If the downstairs tenant was injured as a result of your negligence, you may also be liable for their medical bills, which would also be covered by renters insurance with liability coverage. Many landlords require their tenants to have a minimum of $100,000 in liability coverage.
If a policy includes additional living expenses, this covers any extra costs you may incur as a result of fire, damage or theft, including a hotel bill if the property you rent is so damaged that you’re unable to stay it in.
What Is Not Covered by Renters Insurance?
Renters insurance does not usually cover the physical property, such as the building you rent. The owner of the property should have landlord insurance in place to protect the building itself. Landlord insurance may also offer liability protection for the policyholder, but usually does not extend to tenants. Renters insurance does not usually cover flood damage. You may need to have flood insurance even if you don't live in a high-risk area. The National Flood Insurance Program helps by offering affordable insurance to renters.
How Much Is the Average Renters Insurance?
The cost of renters insurance varies by state, liability limits and personal property values. In New York, for example, a basic policy providing $50,000 of personal property coverage costs about $300 a year. In Pennsylvania, policies range from about $15 to about $30 per month.
If you already have auto insurance, contact your provider and ask for a quote on a renters insurance policy. You'll often get a discount for bundling both policies.