Some landlords require that tenants purchase renters insurance coverage before moving in.

If you're renting your home, consider renters insurance, which covers your personal belongings if anything is damaged or stolen.

You may be under the misconception that your landlord's insurance is enough. While a landlord's insurance will pay for damage to the building structure itself, it will not cover the damage or theft of your possessions. If there's a fire, for example, your landlord's insurance will pay to repair the building, but renters insurance covers your own belongings. Without it, you'd have to buy new clothes, furniture and everything else at your own expense.

 

What does renters insurance cover?

Does renters insurance cover liability?

Renters insurance typically includes liability coverage. This covers property damage or injuries to others caused by you or someone in your household. If your child hits a ball through a neighbor's window, for example, your liability coverage will likely cover the damage. According to the Insurance Information Institute, renters insurance liability coverage limits generally start at $100,000.

In addition, a renters insurance policy typically includes no-fault medical payments coverage. If someone suffers a small injury and blames you, this coverage pays out quickly, whether you were negligent or not.

Keep in mind that liability coverage does not cover your household members' injuries. If you slip on an area rug in your home and break your ankle, medical expenses will generally be covered by your health insurance, not renters insurance.

Does renters insurance cover property damage?

Renters insurance typically covers your personal belongings after disaster strikes your home. Even if property is damaged outside your apartment, a renters policy will usually cover it. If your laptop is stolen from your luggage at a hotel or your bike is stolen outside an office building, your insurer should cover it.

Does renters insurance cover additional living expenses?

If your apartment's damage makes it unlivable, renters insurance will generally cover extra expenses. This means insurer will pay for any additional living expenses, such as hotel costs, restaurant meals and other bills you have because you can't live at home. Check the policy for the maximum amount of coverage for additional living expenses.

Disasters covered by renters insurance

Renters insurance will commonly cover damage from:

  • Fire and lightning
  • Windstorms and hail
  • Explosions
  • Riots and civil commotion
  • Aircraft, such as self-propelled missiles and spacecraft
  • Vehicles
  • Smoke
  • Vandalism
  • Theft
  • Falling objects
  • Weight of ice, snow or sleet
  • Water or steam damage, excluding floods
  • Sudden tearing apart of air conditioners or water heaters
  • Freezing
  • Damage from artificially generated electrical surges
  • Volcanic eruption

What does renters insurance not cover?

  • Earthquakes
  • Floods

You can purchase additional coverage for floods or earthquakes as a separate policy from an existing renters insurance policy.

Renters insurance is sometimes referred to as an HO-4 policy. You can see a sample of an HO-4 policy posted by the state of Nevada.

How much does renters insurance cover?

You will decide how much a renters policy covers. Choose an amount that will be enough to replace all of your belongings in a worst-case scenario, like a fire.

  • How much you need: Make a record of your belongings. A home inventory checklist will help you figure out exactly what you own and the value of your belongings. It's also helpful to have a home inventory if you ever have to file a claim.
  • What type of coverage: You may be offered actual cash value or replacement cost coverage. It's better to choose replacement cost coverage so you can replace all your stuff with new items without draining your bank account.

Renters insurance property damage coverage

Types of renters insurance How it works
Actual cash value
  • Pays for items at their current value.
  • Takes depreciation into account.
Replacement cost value
  • Pays for new items that are of "like kind and quality."

You'll choose a deductible when you buy a policy. Your insurer will cover damage or theft that exceeds the amount of your deductible. For example, if you have a $500 deductible and your stolen laptop is valued at $1,200, your insurer will reimburse you $700.

How much does renters insurance cost? Renters insurance is affordable, averaging $188 a year nationwide, according to the National Association of Insurance Commissioners. This price is worth it considering the amount you'd have pay if you have extensive damage or theft.

 

Average monthly renters insurance rates