Simply put, 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 cover temporary living expenses.
Your renters insurance also provides coverage in the event you are found legal liability for any damages. This can refer to someone injuring themselves on your property, if your pet bites someone, or if your apartment folds and damages the apartment below yours. Coverage typically starts around $100,000 but can be increased.
Remember, it’s important to consider what renters insurance doesn’t cover. 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.
Furthermore, it should be stressed that your landlord will usually not provide you with renters insurance. You have to purchase it and maintain it yourself. But don't worry. We have some advice for you in that regard.
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.
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. 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. For more information on car insurance with roommates, see our guide here.
You can ask your insurance agent for coverage for a specific item. Something you may want to consider something 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 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!
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