Author: Kimberlee | August 15, 2025
Edited by: Kimberlee and Reviewed: Kimberlee
If you’re renting an apartment or house, you want to seriously consider getting renters insurance. It is a cost-effective way to protect your belongings and give you peace of mind. This article will go into what renters insurance is, why you need it, and how to go about getting it.
First, let’s look at the basics of renters insurance.
Renters insurance is an insurance policy designed to protect renters. It will repair or replace belongings lost or damaged in a fire, vandalism, or theft. It also offers liability protection in the event that the tenant is found to have done something that leads to a financial loss to another party, such as their dog biting a stranger.
While landlords typically have landlord insurance on the property, it is important to understand that this does not provide protection for the tenant’s personal property or liability coverage. The landlord’s policy will only cover the building and the landlord’s property. For tenants to have coverage, they need to get a renters insurance policy. In fact, a renters insurance policy will even provide additional living expenses so that tenants have a place to stay while their property is being repaired in the event of a loss where the property in uninhabitable for some time.
There are several key components of renters insurance.
A renters insurance policy will provide coverage for a tenant’s personal property found on the property. This includes furniture, electronics, clothing, housewares, and anything else the tenant may own. It will also provide protection for these items should the item be lost or damaged in transit, say it was damaged in a car accident. The types of losses it covers include fire, theft, vandalism, water damage, and more.
When the item gets damaged, the insurance company may pay for it at the replacement cost or the actual cash value of the item. This is contingent on the policy, and a question you should ask when buying insurance. The replacement cost pays to replace the item in today’s market price. So, a flat screen television would be replaced regardless of whether prices went up or down. The actual cash value is the amount an item is worth after depreciation. This means that the flat screen television wouldn’t be replaced in its entirety, but instead, an amount less appreciation would be given to the tenant to go towards a new television.
Liability insurance is an important component of renters insurance. It pays for third-party damages where the tenant is held responsible for the financial loss of the third party. This could be where the tenant’s dog bites someone, or their child hits a baseball through someone’s window. These types of events lead to liability of the tenant, where they are responsible for the financial costs of the loss. The liability portion of the renters insurance will pay for these types of losses. However, keep in mind that some insurance companies do have restrictions on insuring households with dogs and may limit the type of dog you can own.
Additional living expenses pay for tenants to obtain alternative living arrangements when their house or apartment is uninhabitable due to a covered loss. The loss may be fire or water damage, where the apartment needs repairs and restoration before tenants can move back in. Additional living expenses pay for a similar-sized and budget home so that tenants are not out of pocket for these expenses.
There are some factors to consider when choosing renters insurance.
One of the first things to do when choosing renters insurance and getting a policy is to determine how much your personal property is worth. This means going through a basic inventory of your home and calculating how much each item is worth. Keep in mind that some high-end items, such as jewelry or artwork, may not be fully covered by the policy and may need another policy to cover them.
A deductible is the tenant’s portion of a loss. It is a predetermined amount that the tenant is responsible for before an insurance company will pay a claim. Deductibles are often $500, $1,000, or $2,000. Renters should be able to fund this amount without hardship to get a claim paid for completely.
Make sure that you have enough in coverage limits. This includes both personal property coverage and liability. Talk to your insurance agent to see if you need more than the standard $100,000 in liability coverage to protect you in the event of a loss. This may be for someone with kids or other risks.
Renters insurance will not cover everything. You may need another policy or an endorsement to cover certain items.
Most renters policies have a limit on jewelry and artwork. This may be a total of $1,500 for a specific item. To get full coverage of high-end items, you may need to get a personal articles policy (PAP) that schedules the items and gets them appraised. If you don’t, you may be limited to the renters policy limits. For example, if you have a $20,000 watch and no PAP, you may only get $1,500 for the loss of the item.
Flood and earthquakes are not covered by typical renters insurance policies. While water damage from something like a pipe bursting is covered, loss from a rise in water is not. For both flood and earthquake coverage, you will need a separate policy.
You can often opt for an inexpensive rider that provides coverage for identity theft protection. This would pay to help you restore your identity if there were ever an issue. Things like paying to restore federal IDs and bank accounts are included in these coverages.
Let’s look at some tips for comparing renters insurance quotes.
Get a quote from a reputable insurance company. Most home insurance companies offer renters insurance as well. Look for companies that are highly rated by AM Best and have a track record of handling claims appropriately.
Read through the policy details carefully. This is important in understanding what is and isn’t covered. Learn about policy exclusions and how you can cover the gaps with other insurance products.
Many insurance companies will offer discounts when you bundle your renters insurance with auto insurance or life insurance. Ask your agent about bundling discounts and how you can best save.
Here are some steps in purchasing the right renters insurance:
Finalize the purchase: Pay the first required premium to start the policy and get the coverage you need.
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