Rental Insurance – Basic Protection Worth the Cost

If you are one of the many who have gone without renter’s insurance you may want to reconsider that decision after a year of wild weather across the US that brought down trees, damaged rooftops, and flooded many basements. Routine weather events like these are typically covered – as are losses related to fire, smoke, vandalism or theft.

Many renters assume they are covered under their landlord’s insurance policy. However, that is not the case. Landlords carry insurance, but that coverage is only for structural damage to the building – not the contents. Personal property belonging to tenants is not covered under these policies and if a fire were to burn down your apartment building or house, your landlord would be covered to rebuild, but you would be left with nothing.

Renters insurance fills that void of coverage and protects your personal property from theft or damage. Between furniture, clothes, electronics and household appliances alone, you could be out thousands of dollars without it. Additionally, you might have to incur further living expenses while your home is being repaired or rebuilt.

Renter’s insurance also includes liability protection, so if someone was injured at your home or apartment and sued you, your legal expenses and any court award would be covered, generally up to a $100,000 limit, and those limits can be increased. Coverage often provides living expenses should you have to temporarily move out of your apartment.

Renter’s insurance is less expensive than many people realize: a basic policy costs about $300 a year for around $50,000 worth of property protection. Like most insurance policies, the premium for renters insurance is determined by the level of coverage, the deductible, where you live and additional factors. Policies that offer replacement value typically cost slightly more than actual cash value (ACV) policies. With an ACV policy, you are only reimbursed for the depreciated value of the item(s) lost, which is often substantially less than its replacement cost. It’s wise to choose a replacement value policy and pay the marginal difference.

When shopping for renters insurance, it’s best to start at your current insurance company if you have one. If you already have auto insurance, for example, you may be able to get a substantial discount on a renters insurance policy from the same insurer.

To help renters calculate how much coverage they need, the Insurance Information Institute offers a home inventory tool at A room-by-room inventory may determine that you need more than the $50,000 that a basic policy offers. And while you’re at it, take photos of expensive items as they may be useful if you ever have to file a claim.