What is renters insurance?
Simply speaking, renters insurance covers damage to your personal property anywhere in the world—your clothes, your couch, and even your kitchen appliances. So, if your apartment were to burn down, your renters insurance would only replace your personal belongings. Moreover, renters insurance also offers you liability and additional living expense protection. Meaning, it would cover damages or injuries you might cause to someone else. And, in the event of a covered loss, your insurance would temporary living expenses.
What does it cover?
Renters insurance covers damages to your personal property due to:
- Fire, lightning
- Windstorm, hail
- Riots or civil commotion
- Vandalism or malicious mischief
- Volcanic eruption
- Falling objects
- Weight of snow, ice, or sleet
- Accidental discharge or overflow of water or steam from an appliance, or a plumbing, heating, or air conditioning systems
- Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water system, an air conditioning or automatic fire-protective system
- Short circuit damage caused by electrical appliances
What doesn't it cover?
It’s important to consider what renters insurance doesn’t cover, however. Firstly, renters insurance isn’t going to cover anything you don’t own. Meaning, the structural aspects of your rented apartment or home wouldn’t be covered—only your belongings. Moreover, renters insurance doesn’t cover damages caused by earthquakes or floods. Some insurance companies offer an additional earthquake policy while flood policies are typically handled through FEMA.
When determining how much coverage you need, consider doing an inventory of your belongings. This will not only help determine how much coverage you need based on your valuables, but could help with the claims process as well.
Living with a Roommate
If you’re sharing an apartment with someone, you should consider whether or not you want to share your renters policy with your roommate. Sharing a policy has the benefit of a split bill—although renter’s insurance is typically one of the cheaper forms of insurance, it can come in handy if you have many monthly bills. Alternatively, if the policy is in your name, any claim your roommate files would be on your policy as well. If your roommate has multiple claims, your rate could be raised or your insurance company could drop you all together.
Something you may want to consider is what insurance companies refer to as floaters or endorsements. Essentially, a floater is an additional coverage for a high-priced category of an item that exceeds the normal limits on your policy. For example, you own a very expensive ring that is valued at $10,000. Because most insurance companies cap their coverage for jewelry well below $10,000, you would need a floater or endorsement to help ensure your jewelry is properly covered. While it varies by company, floaters and endorsements extend to other items as well as jewelry—such as works of art, firearms, or film equipment.
While renters insurance is one of the cheaper forms of insurance, having it can give you discounts on other lines of insurance—namely, auto. If you have auto insurance, you should consider bundling renters insurance to obtain a multi-policy discount. Bundling your renters and auto can save you on average $72 per year on your auto insurance!
Here are some top carriers for renters insurance per J.D. Power Ratings:
- The Hartford
- American Family
- Erie Insurance
- State Farm