Have you been wondering about whether you'll be protected if your personal property gets damaged, or if someone injures themselves in your apartment?
Renter's insurance is a type of insurance designed for people who rent, as opposed to own, their living space. Renter's insurance may include personal property coverage (for damage to items you keep in your apartment that you own) as well as liability coverage (for injuries). Also known as: Tenant's insurance, apartment insurance.
Why You Need Renter's Insurance
You need renter's insurance to cover you if any of your furniture, electronics, books, or other belongings get damaged or destroyed. Renter's insurance also covers you in the event that someone else is injured in your apartment or someone’s personal property is damaged and sues you.
Renter's insurance is important as long as you rent your home. It applies the same whether you rent an apartment, condo, coop, or house.
Why You Need It Even Though Your Landlord Has Insurance
You need renter's insurance even if your landlord has insurance. Although your landlord almost certainly has property and liability insurance, your landlord's policy doesn't cover the items that you keep inside your apartment, and it doesn't protect you if a guest is injured and sues you for liability.
Cost and Availability
Renter's insurance probably costs less than you think. It should run you roughly $10-$25 per month, and you may be able to benefit from certain discounts.
Several top-name insurers, such as Allstate, GEICO, and State Farm, offer renter's insurance. If you already have insurance (for instance, for your car) with a company that you like, ask your agent or broker whether you can also get a renter's insurance policy. Keep in mind that having more than one policy with the same insurer can save you money through a "multi-line discount."
Here's how to save money when purchasing insurance:
- Shop around to compare policies
- Don't get more coverage than you need
- Go with a higher deductible
- Ask your insurer about any discounts (for example, for having a protective device such as a working smoke detector, for having multiple policies with the same insurer, or for being over 55 and retired)
- Pay the total annual premium in one payment (rather than in monthly payments, which typically add installment fees)
- Go online to get quotes.Thanks to the Internet, it's easy to get one or even several renter's insurance policy quotes without any obligation
Need for Renters Insurance Even If You Don't Own a Lot of Personal Property
Renter's insurance is still important even if you don't have much personal property because of the liability component. Also, chances are your personal property is worth more than you think. If you don't have much personal property to insure, then you can save money by choosing a lower policy limit.
Actual Cash Value Versus Replacement Cost Coverage
How much funds you receive for damaged or lost property depends on whether you opt for an actual cash value (ACV) or replacement cost coverage policy. ACV coverage pays for the market value of your property at the moment before it was damaged. Replacement cost coverage pays you the full cost of getting a new item to replace the one that was destroyed.
As you would expect, replacement cost coverage is more expensive than ACV, but it's usually worth it.
For example, think about what would happen if your computer, television, or stereo system were destroyed. If you only had ACV coverage, you would probably run far short of what you would need to properly replace these expensive items.
Funds to Cover Temporary Relocation
Renter's insurance normally covers your living expenses if you must temporarily relocate because of extensive damage to your apartment. This is something that you should confirm, however, with your agent or broker before settling on a policy.
Renter's Insurance and Flood Coverage
Like homeowners, renters may choose to purchase coverage to compensate them for loss due to damage from flooding, which would include their personal property. As with other forms of loss, keep in mind a landlord's insurance policy will not compensate tenants for damage to their apartment's contents.
If you are interested in obtaining this type of coverage as part of your renter's insurance, it's important to discuss your options with an insurance agent or broker ideally when you first go shopping for renter's insurance, which is often after you're done looking for an apartment and you've signed or are about to sign a lease. However, if you already have a renter's insurance policy and you're considering adding coverage for damage caused by floods, there's no reason you shouldn't be able to do so.
Unlike other perils or causes of loss, damage from flooding is protected by purchasing a separate flood insurance policy, which is administered by the National Flood Insurance Program (NFIP). The amount of the premium depends on certain factors such as your coverage and your apartment building's flood risk, based on where it's located. As a renter, fortunately, you should just need protection for the contents of your apartment, which should be easy to fit into your budget.
How to Handle a Move When Covered by Renter's Insurance
If you purchase a renter's insurance policy and then move to a different apartment, your policy shouldn't be affected, at least if the move is within the same state. Inform your insurer of your upcoming move and provide your new address to ensure uninterrupted coverage.