Renters Insurance: What it Does and Does Not Cover
What is renters insurance? Renters insurance is a must for anyone living in an apartment or other rented home. We’ll cover all of the basics including renters insurance cost, what it covers, and more.
What is Renters Insurance?
Like all forms of insurance, renters insurance exists to help one party protect themselves from financial loss. In this case, it’s helping protect tenants from losing money due to personal property damage, legal liability, or theft. Whether you’re renting a house, apartment, townhouse, you should consider getting insurance to protect your belongings.
What is Covered by Renters Insurance?
There are several main areas where you get protection:
- Personal property- if your personal belongings get damaged or stolen, the insurance policy will cover the cost up to the limits of your policy.
- Additional living expenses – if you’re renting a home and it becomes uninhabitable due to something that is covered by the policy, it will help pay for you to live somewhere else for the time being.
- Medical coverage – if a guest gets injured while on your property, your insurance may cover some of their medical expenses.
- Personal liability – if the property gets damaged or someone gets injured on the property, your policy can cover liability costs including associated legal fees.
How is Renters Insurance Different from Homeowner Insurance?
That’s a good question – it’s one we partially addressed in a recent article about the benefits of homeowners insurance.
The short answer to your question is that renters insurance only applies when you are renting a property as a tenant. It doesn’t matter what kind of living space you’re renting, just that you are paying rent to live in a home owned by someone else.
Homeowners insurance requires you to own the home you’re living in. Again, it doesn’t matter what type of home – you can get homeowners insurance on a detached home, condo, townhouse, etc.
In general, there are a lot of similarities between these two forms of insurance. They both protect your property, provide loss of use coverage, and can help with personal liability or medical payments if the need arises. When you become a home buyer, your mortgage lender will probably require you to get homeowners insurance to help protect the home. Why? Because the mortgage company is giving you a lot of money – it wants to make sure the property is protected!
How Much Does Renters Insurance Cost?
The personal finance site Nerdwallet.com evaluated how much renters insurance costs in each state. The good news is even in the most expensive state (Louisiana), you’re only expected to pay about $22 per month.
Most states cost a bit less, such as California which is still on the higher side at $18 a month.
Are you willing to spend $18 a month to protect your stuff? Most people are – that’s the equivalent of just one or two meals from In-N-Out!
Is There Anything Not Covered by Renter Insurance?
The short answer is yes. While renter insurance covers a lot of things, it won’t cover every single possible event.
For example, most renters insurance policies do not cover floods or earthquakes. If you live in an area that is prone to these types of natural disasters, pay close attention to the policy you sign up for!
Other things can happen to your property that aren’t covered, too. If you get pests in the home such as rodents or bed bugs, your policy probably won’t cover any damages.
Did your car get damaged in a storm? Unfortunately, your renters insurance policy won’t cover that. No, a homeowner insurance policy wouldn’t either. You’d need to have a car insurance policy for that.
You should also know that if you have a roommate, their stuff is not covered under your policy unless they’re listed on the policy.
Conclusion
Do you have any other questions about renters insurance? Send us an email and we’ll be in touch as soon as possible!
