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What is Renters Insurance?

Why you need it, what it covers, and what it doesn't

October 13, 2020
Written byKim KlenkGrowth Marketing Director
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When you’re on the hunt for your first (or next) rental unit, a desirable location, affordability, and luxury amenities might top your list of priorities. But if your personal property is stolen or damaged after move-in, you’ll wish renters insurance had made the list. While no one expects a break-in, fire, or major weather event to happen to their leased condo, apartment, or house, a renters insurance policy can help replace your belongings without emptying your bank account. 

What is Renters Insurance?

A renters insurance policy provides you coverage to replace your belongings should something happen to your personal property, such as theft, vandalism, or fire. Some renters mistakenly assume that if something happens, they can file a claim with their landlord. While the landlord may have an insurance policy, it likely only covers the rental unit, not your personal belongings. You’ll have to pay out-of-pocket to repair or replace these items, unless you have adequate insurance.

What Renters Insurance Covers

Generally, renters insurance covers the cost to repair or replace your personal property (inside and outside the rental unit). Personal property is everything from your furniture to your clothes to your electronics. 

Some policies may also offer additional living expenses (ALE) which can cover the temporary costs of living at another location if your unit is left uninhabitable after an unexpected event. ALE helps pay for alternative housing while your unit is being repaired. 

Similar to home insurance policies, renters insurance can also provide liability coverage. Liability coverage covers things like legal costs and medical expenses for non-family members who are accidentally hurt on your property. 

The amount of coverage available to cover these costs will depend on the claim, policy coverage limits, and whether your policy offers replacement cost value or actual cash value coverage.

What Renters Insurance Doesn’t Cover

Renters insurance is limited by the coverage you select and policy details, such as how much personal property coverage you bought. Let’s say you chose $10,000 in Personal Property coverage and a $100 deductible. This means you are covered for losses up to $10,000, minus you paying for the first $100 out of pocket.  So if your $500 TV is stolen, you would receive $400.

Typically, renters policies cover losses from fire, theft, and most vandalism. However, similar to home insurance policies, not every type of weather event is covered. For example, damage from earthquakes or flooding will likely require the purchase of a separate policy besides primary renters insurance to cover your personal property from those events.

Special items, such as firearms, expensive jewelry, or a rare coin collection, may require additional coverage since primary renters insurance may not be enough to cover the replacement value or to cover those items when they are not at the rental address. Equipment used for a home business may also require a separate policy.

Selecting a Renters Insurance Policy

Before you can select the right policy for your situation, determine how much personal property coverage you need by taking inventory of your belongings. Assign a value to each item based on how much it would cost to replace the item if it was destroyed.

Exploring your policy options before you sign your next lease is smart. When you lock your doors the first night in your rental, you'll have peace of mind knowing you also protected your finances.

Speak with a knowledgeable insurance professional who can review your coverage needs, find a deductible that works with your budget, and alert you to insurance bundle discounts. Our team at Branch is happy to walk you through your renters insurance policy options! Just give us a call at 833-427-2624.

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