Renter's Insurance

Tenants may not own the homes they live in, but they’re still exposed to some risks. For example, they may lose belongings in a fire or burglary, or they might be named in a liability lawsuit. Renters insurance helps tenants protect themselves from many of the risks they face. Although it’s an important form of insurance, renter’s insurance is one of the more underutilized insurance offerings.

Because renter’s policies don’t normally include structural protections for buildings, insurers are frequently able to keep policies’ premiums affordable. Most renter’s policies cost just a fraction of what a comparable homeowners policy would be.

Renters policies’ protections can vary, as every policy has its own terms and conditions. In general, though, renters policies offer three primary coverages, including: Personal Liability Coverage, which usually covers certain incidents in which a tenant is held responsible for personal injury or property damage; personal property coverage, which normally helps protect the belongings that a tenant owns (e.g. furniture, electronics and clothes); and additional living expenses coverage, which frequently helps pay for alternative accommodations if a tenant’s residence is rendered uninhabitable in a covered incident. When determining how much personal property coverage to select, tenants should carefully consider the value of all their belongings. People are sometimes surprised at how much their possessions are worth all together. A policy’s personal property coverage limit generally should be equal to or greater than the cumulative value of a tenant’s belongings.

A renters policy’s liability coverage might offer protection if a tenant is found responsible for (or simply accused of) causing damage to the building they live in. Most renters policies, however, don’t offer any other protections for buildings. It’s usually a landlord’s responsibility to insure any rented homes or apartment buildings they own against lightning, wind, fire, and similar perils.

Most people who lease a residence could benefit from the personal liability, personal property, and additional living expenses coverages that renters policies typically afford. Therefore, anyone who rents a place for an extended period of time should consider getting renters coverage. This may include tenants who lease their residence year-round, people who own a home but lease a secondary residence for part of the year, employees who will be working in another state for an extended period of time, and college students who rent a residence off campus.