What You Can Expect from a Renters Insurance Policy

You’ve signed a lease for a new apartment, and now it’s time to find a renters insurance policy that best suits your needs. Like most types of insurance, the hope is that you won’t actually have to use the coverages that are available. However, all it takes is a fire breaking out or someone falling and breaking their arm in your apartment and you could be looking at a significant out-of-the-blue financial burden. Having a solid renters insurance policy in place will protect you from the unexpected. 

What Exactly is Renters Insurance?

Renters insurance covers any personal items within your rental property when they’re damaged or lost by a covered event, such as a fire or theft. Any lost or damaged property is reimbursed at either its actual cash value (accounts for depreciation) or replacement cost (does not account for depreciation). The type of policy you purchase will determine the reimbursement rate. Renters insurance also offers liability protection and additional living expenses.

Smoke Alarm

What Does Renters Insurance Cover?

Coverages may vary depending on which insurance company you select, but you can expect damage from the following events to be covered:

  • Hail
  • Fire
  • Windstorm
  • Lightning
  • Vandalism
  • Theft
  • Riot or civil commotion
  • Falling objects
Renters insurance often extends to internal occurrences as well. For example, you would be covered if water sprayed from your unit’s fire sprinkler system and damaged your leather couch. Issues can also arise from plumbing, heating or air conditioning, and any damage that resulted from these malfunctioning parts should be covered by your renters insurance.  

Your policy will also cover accidental injuries to other people and any damages to their property while visiting your apartment. If someone files suit against you for either personal injury to damage to their property, your liability coverage will provide legal representation and will cover the amount of awarded damages to the other party up to your coverage limit.  

If damage is severe enough to deem your apartment uninhabitable, additional coverage for living expenses will pay for lodging, meals and other necessary costs while it’s repaired. 

Is Renters Insurance Required by Law?

While it’s not a legal requirement, it’s not unusual for landlords to require tenants to purchase renters insurance. A liability limit will be defined in the lease, typically around $100,000. In addition, a landlord may ask that renters include specific endorsements on their policy, such as flood or earthquake insurance. Endorsement requirements are generally based on location. Before moving into a new apartment, review the lease carefully to see what types of insurance requirements are in place. 

If’s there no requirement in your lease, it may seem like a cost-saving move to go without renters insurance. However, doing so comes with a certain level of risk. Accidents can occur at any time and the personal cost of replacing your household items or paying someone’s hospital bills out of pocket certainly outweighs the premiums for any renters insurance policy. 

How Much Does Renters Insurance Cost?

Chances are your renters insurance will cost less than your local gym membership. Commonly ranging from $5 to $30 per month, renters insurance will protect your personal belongings and provide liability protection at a very affordable rate. According to ValuePenguin, the national average cost of renters insurance in 2019 was $16 per month. You can decide whether the price is worth it, but that’s a small amount to pay for peace of mind.

What are Your Options for Renters Insurance?

Mainstream insurance companies like Allstate and Progressive will have a renters insurance extension. You can contact your automotive or homeowners insurance provider to get a renters insurance quote and to see if they offer an opportunity to bundle. If you aren’t sold on the rate, consider external carriers. Lemonade, Young Alfred and Jetty are all listed in the top five of insurance companies who provide rental coverage by consumersadvocate.org. No matter where you look, you’ll likely find an affordable premium and a policy that provides ample protection for both you and your apartment.

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