What is Renters Insurance, and What Does it Cover?

• Renters insurance protects your personal belongings from damage or theft.
• Most property managers don’t require renters insurance, but it’s usually a good idea.
• The cost of renters insurance is typically cost-effective, usually less than $25 per month.
• Renters insurance is different from auto insurance.

Renters insurance covers you and your possessions from theft, loss, damage, or injury to personal belongings. Typically, a property owner’s insurance policy covers apartment buildings, but this insurance policy has some limitations. For example, if a building fire damages your personal property or someone is injured inside your apartment, your property manager will not be held responsible for replacing any property you own. Renters insurance comes into play in this case.

Renters insurance covers several main buckets of coverage:

Personal property damage

A basic renters insurance policy will reimburse you for the exact value of your lost items. Purchase a more expensive plan, and you’ll be able to receive coverage for the total cost of replacing the items. Personal property damage coverage may cover damages due to fire, flooding, lightning, wind, hail, falling objects, or water damage.

Personal liability

Suppose something happens to someone in your apartment (slipping on the floor or falling downstairs, for example) that leads to that person getting medical treatment. In that case, your renters insurance policy will cover some medical bills. Specifically, personal liability covers costs related to an injury in which you’re negligent.

Living expenses

If a fire or other incident has made your apartment unlivable for the time being, your renters insurance will cover the cost of your hotel room or alternative living space. Renters insurance may also cover the cost of a security deposit or even moving expenses.

Property manager damage

Your renters insurance policy may also cover costs related to property manager negligence. Negligence may include flooding or roof collapse due to a lack of maintenance or repairs. In this case, your insurance policy may help replace your personal belongings and help you move to a new apartment.

Theft

Renters insurance typically covers theft. If someone breaks into your property and steals your belongings or causes damage to your apartment, your policy will cover the related costs. To do so, you must typically file a police report.

Food

Renters insurance also covers the food in your fridge. If you experience a power outage or must move from your apartment for an extended time, the food in your fridge could go to waste. You can claim the cost of lost groceries through your renters insurance policy.

What isn’t covered by renters insurance?

While renters insurance covers most instances of theft, accidents, and damage, renters insurance doesn’t cover natural disasters and damage from pests. It also doesn’t cover damage or theft of your vehicle. It might be worth adding special considerations to your base plan if you live in a flood area or earthquake-prone city.

Do I have to get renters insurance?

It is not mandatory to have renters insurance in the United States, but property managers are allowed to require it if they choose. It’s essential to read through your lease and see if it’s a requirement in your particular case. 

It’s common for younger renters to feel like renters insurance is an extra and unnecessary expense. Putting together the respective values of everything you own adds up in a way that might surprise you. According to State Farm, the average person has over $35,000 worth of belongings that are probably not covered by a property owner’s insurance policy. We recommend creating a home inventory when beginning to take out a renters insurance policy to get a better idea of how much your belongings are worth.

How does renters insurance work?

Depending on your plan, your renters insurance will likely kick in after a predetermined deductible. This deductible is the amount you’ll have to spend on damages “out of pocket” before the insurance coverage kicks in and covers the rest of the cost. The higher the premium—how much you’re paying for the policy—the lower the deductible. 

What’s the average cost of renters insurance?

The average cost of renters insurance is much lower than you might expect. According to Quote Wizard by Lending Tree, renters insurance costs approximately $18 per month or $219 per year. If you’re pursuing additional coverage options, you can expect to pay a few extra dollars per month for each. You may also be eligible for discounts if you bundle your renters’ insurance with your auto insurance policy.

How do you submit a renters insurance claim?

You can submit a renters insurance claim with the following steps:

1. Notify your property manager of the incident: You’ll want to notify your property manager of the incident and damages as soon as possible.
2. Notify the police if necessary: If burglars steal items from your apartment, be sure to file a police report.
3. File a claim with your insurance company: File an official claim with your insurance company, notifying your insurance carrier that your items were lost or stolen.
4. Make a list of damaged and lost items: Your insurance company will request a list of items damaged or stolen, including the value.
5. Work with the representative: Work with your insurance representative to submit additional paperwork. Depending on your claim, your insurance carrier may need more information from you.

FAQs about renters insurance

Explore the following frequently asked questions related to “what is renters insurance, and what does it cover?”

Renters insurance isn’t expensive, and it’s worth the small price you’d pay each month for peace of mind. Find your next apartment on Zumper and get renters insurance before you move in.