“Why do I need renters insurance?” Usually the question is asked by someone whose landlord is forcing them to buy it, but it also comes from curious people who didn’t even know that renters insurance existed. Whether your landlord mandates renters insurance or not, it’s a good idea to evaluate your possessions and think about what it would cost you to replace them. Things have changed; people own more expensive things now, and for less than the cost of a pizza a month, a renters insurance policy will protect you. What would you do if you had to start from scratch tomorrow? Do you have enough extra money to do that?

If you’re renting an apartment or home, you’ll need an insurance policy to cover your belongings. Your landlord’s property insurance policy covers losses to the building itself – whether it’s an apartment, a house or a duplex. Your personal property and certain liabilities, however, are covered only through a renter’s insurance policy that you, as a tenant, have to find and pay for. While 95% of homeowners have a homeowner’s insurance policy, only 37% of renters have renter’s insurance, according to a 2014 Insurance Information Institute poll conducted by ORC International.
A renter’s insurance policy protects against losses to your personal property, including clothes, jewelry, luggage, computers, furniture, and electronics. Even if you don’t own much, it can quickly add up to a lot more than you realize – and a lot more than you’d want to pay to replace everything. According to esurance.com, the average renter owns about $20,000 worth of personal property.

Liability coverage is also included in standard renter’s insurance policies. This provides protection if someone is injured while in your home or if you (or another covered person) accidently injure someone. It pays any court judgments as well as legal expenses, up to the policy limit.

Most policies provide at least $100,000 of liability coverage, and between $1,000 and $5,000 for medical-payments coverage. You can request (and pay for) higher coverage limits.

If your home becomes uninhabitable due to one of the covered perils, your renter’s insurance policy may cover “additional living expenses,” including the cost associated with living somewhere else temporarily, food and more. Check with your policy to find out how long it will cover additional living expenses, and if it caps the amount the company will pay.

Renter’s policies protect against a surprisingly long list of perils. A standard HO-4 policy designed for renters, for example, covers losses to personal property from perils including:

• Damage caused by aircraft
• Damage caused by vehicles
• Explosion
• Falling objects
• Fire or lightning
• Riot or civil commotion
• Smoke
• Theft
• Vandalism or malicious mischief
• Volcanic eruption
• Weight of ice, snow or sleet
• Windstorm or hail

Damage from water or steam from sources including household appliances, plumbing, heating, air conditioning or fire-protective sprinkler systems

Note: Losses resulting from floods and earthquakes are not covered in standard policies. A separate policy or rider is required for these perils. In addition, a separate rider might be needed to cover wind damage in areas prone to hurricanes. And renter’s insurance policies don’t cover losses caused by your own negligence or intentional acts. For example, if you fall asleep with a lit cigarette and cause a fire, the policy most likely will not cover the damage..

The Bottom Line
Renter’s insurance provides coverage for your personal belongings, whether they are in your home, car or with you while you’re on vacation. In addition, renter’s insurance provides liability coverage in case someone is injured in your home or if you accidently cause injury to someone. Be sure you understand what your policy covers, and ask us about available discounts, deductibles and coverage limits.