People who rent their homes are often under the impression that they will be covered under their landlord’s property insurance for any damages should disaster strike. However, this is incorrect; the landlord’s policy only covers damage to the building itself. You still need renter’s insurance to be covered yourself.

If you’re a renter, you can avoid this common misstep by obtaining renter’s insurance. This type of coverage protects you from damage to any property in your home or apartment, including (but not limited to):

  • Furniture
  • Clothing
  • Computers
  • Household Linens (towels, sheets, bedding, etc.)
  • Jewelry
  • Art
  • Appliances

All of these items can be quite valuable, and even more, if they are collectively damaged. Losing everything at once can cause a severe economic downturn in a renter’s household.

Below are some frequently asked questions about renter’s insurance:

What Does A Renter’s Insurance Policy Protect Me From

A renter’s insurance policy is a named peril policy, which provides coverage for specific perils named within the policy

  • Fire
  • Smoke
  • Lightning
  • Windstorms
  • Vehicle damage (not including the renter’s own vehicle)
  • Damage caused by aircraft
  • Theft
  • Riots
  • Volcanic Eruption
  • Weight of ice or snow
  • Freezing of plumbing
  • Water or steam leakage
  • Damage otherwise caused by a faulty steam or water heater
  • Damage caused by short-circuiting electrical appliances

It is important to note that renter’s insurance does not cover damage caused by floods originating from outside the rented property, or earthquakes. These coverages can be purchased separately.

What If My Home Is Damaged To The Point That I Can’t Live There?

Another helpful coverage component of renter’s insurance is reimbursement for temporary living expenses. If your house or apartment is no longer safe to occupy, your policy will pay for your expenses while your home is being repaired.

What About Liability Coverage?

Good news! Renter’s insurance has liability coverage as well. If someone is injured inside your home (such as by a dog bite or a slip and fall), you’re covered. Even if you’re sued by the injured party, the policy will cover legal expenses and/or any court judgments against you up to the maximum policy limits (typically somewhere between $100,000 and $300,000).

How Do I Know How Much Coverage I Need?

Creating a quick home inventory is the best way to determine how much coverage is right for you. Performing this inventory is also helpful if you suffer a catastrophic loss and cannot perfectly recall everything you lost. In addition, for a small premium increase, you can obtain a replacement cost policy, which will replace any damaged or stolen item with a comparably new version.

This perhaps provides a bit too much detail but it will give you some idea of what a home inventory list entails.

What is the number one reason to have renter’s insurance?

If none of the above information convinced you to get some renter’s insurance, this should seal the deal – it’s practically free!

Well, not exactly… there is an upfront cost. But once purchased, you can then obtain a discount on your auto insurance that will lower your annual auto insurance costs by as much as 15%.

A typical two-car household can expect savings between $150 and $225, which is enough to pay for the entire renter’s insurance policy. This will allow you to rest easy at night, knowing that you are protected from named perils and at no additional cost to you.