What Is Renter’s Insurance – And Do I Need It?

Jul 31, 2020 5:00:00 PM

Between car insurance, health insurance and travel insurance, renter’s insurance often gets forgotten about. A lot of people don’t know much about it, but there can be a lot of situations wherein renter’s insurance can help you – and you might not even realize it.

What is renter’s insurance?

Renter’s insurance protects your personal belongings and gives you liability coverage when you’re living in a property you’re renting. It can cover a variety of situations including damage from fire, theft, extreme weather and any other eventuality mentioned in your specific policy. It’s generally much cheaper than homeowner’s insurance because it covers the items inside the home and not the property itself.

Renter’s insurance is a great way to ensure that if the worst happens to your abode then your things are safe and can be replaced. It doesn’t just cover your belongings, but also a wide range of situations, allowing you to feel peace of mind in your rented home.

Do I need to have renter’s insurance?

Most of the time it’s the individual tenant’s decision if they want to take out renter’s insurance, and most people don’t. Some landlords will require tenants to show that they have adequate insurance before signing a lease or within a set period of time, however this is rare.

If you’re renting and a college student you might be covered by your parents’ homeowner policy as they can cover the possessions of dependents. It’s worth checking the policy as even if you are covered as a dependent, the coverage usually only applies to on-campus housing and may have other stipulations.

Is it worth it?

When you think about the things in your house that could be worth insuring you might think of exercise equipment, electronics, art and precious jewelry. So, if you don’t own a lot of the above, you might not think renter’s insurance would be cost effective for you. But most people consistently undervalue their belongings. Think about everything you would need to replace if something happened to your home and you might reconsider how much renter’s insurance could help. A good exercise is to go around your home and tally up the cost of your things, including furniture, pots and pans, and of course electronics and technology – and you’ll realize it can all add up pretty quickly!

What does renter’s insurance actually cover?

If your belongings are damaged by something the landlord is responsible for, most renters would think the landlord would have to cover the cost, however this is not the case. The landlord would be able to recoup the losses incurred by the damage to the property through their insurance, but not for your personal belongings. Renter’s insurance could do that for you.

Renter’s insurance can also help if someone is injured in an accident on the property and you are liable to cover their medical expenses. This could include such situations as your dog biting someone or a person tripping over a wire in your home. This could be very concerning, but it’s all taken care of by your insurance. Make sure you check your specific policy though, as some exclude dogs.

If something happens wherein your home is damaged so you’re unable to stay there, your renter’s insurance will often cover the cost of a hotel stay while things get back on track. Some policies also offer ‘off premises’ coverage, so if your things are stolen on vacation, it’s included.

Policies also offer levels of coverage for specific weather or incidents, such as hail, smoke or theft, that could cause damage to your belongings. But make sure to check the wording carefully so you know what situations are covered by your policy.

Renter’s insurance can even offer liability coverage, in case you or your family accidentally damage someone else’s property. If your children have their eyes on your neighbor’s new white sofa, you can rest easy knowing if they do happen to spill their juice (even though you reminded them to be careful) the cost of a replacement is taken care of, although you still might not be invited back.

What is NOT covered by renter’s insurance?

Unless you and your roommate share a policy, it will only cover your belongings. So, if you tell your roommate about your newly acquired renter’s insurance and they sound relieved, make sure they know they’ll need to get their own to reap any benefits. It also doesn’t cover bedbugs, mice or any other infestations.

Things to consider when picking your policy

When choosing renter’s insurance, it’s best to look at factors such as the value of your possessions, inhabitants of the property (human and pet) and location as it pertains to risk of natural disasters. It’s also important to make sure you know if your policy will give you the actual cash value or total replacement cost for an item. This is the difference between being given the cash value of your items as they are worth now, or the cost of your items when you actually purchased them. This is an important distinction and something to bear in mind when looking at policies.


Although renter’s insurance isn’t exactly common, it’s certainly worth examining, particularly if you’d like a bit more peace of mind that your belongings are safe.

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