Renting a new place can be equal parts exciting and exhausting. Beyond the fun part (i.e. furniture shopping and decorating), there's a lot of tough thought that goes into renting a new home.
Is the kitchen space in this place big enough for me? How seriously should I take the basement-occasionally-floods warning? Can I manage to walk up five flight every day? How recent was the last cockroach encounter? How loud are the neighbors (or how thin are the walls)? Am I close enough to work? Can this closet really fit all of my shoes?
And one additional question you really should ask yourself: Should I get renters insurance?
The answer is always yes. And we'll tell you why here.
What Is Renters Insurance and Why Do I Need It?
Renters insurance is insurance that will cover the loss or destruction of personal belongings in your rented home in the event that something goes wrong. It protects your personal property from unexpected circumstances like a fire, theft, vandalism, a storm or damage from an unanticipated turn of events like a sewer backup. It'll pay you for lost or damaged possessions.
Renters insurance may also cover you if you're forced to temporarily move out of your rented home, such as if your home becomes unlivable due to damage caused by covered circumstances. This might happen if your neighbor has a fire, and your building's management has to turn off the utilities to your building for a few days to make repairs. This may also happen if your apartment gets infested with bugs or rodents, and the building needs to be fumigated so you need to spend a night or two in a hotel.
Renters insurance will also help cover the cost of damages that something in your home caused to your neighbors' homes. For example, if your overflowing bathtub seeps through the floorboards and causes a leak into your downstairs neighbor's apartment, your renters insurance policy would typically cover the cost of repairs in both your home and their's. Likewise, if you accidentally drive your car into your neighbor's fence, your renters insurance should cover that, as well.
Furthermore, renters insurance may also help protect you from liability if someone else gets injured on your rented property. And it may also cover you if the items you keep inside your car are lost of damaged, though it doesn't include equipment or systems that have been installed in your car.
"If someone breaks into your rental and steals your belongings, your landlord typically is not responsible — unless you can prove the landlord was negligent by, say, not providing a lock for your doors or windows," according to Trulia. "Otherwise, you’ll have to pay to replace what was taken or damaged. But renters insurance would cover the cost of replacing the items. It also often covers damage to your belongings."
What Is Covered by Renters Insurance?
Renters insurance will cover your lost or damaged items from your rented home. The amount covered by renters insurance will always depend on the type of loss and the amount of coverage you have, however. You can have one of two different types of coverage options under a typical renters' policy.
- Actual Cash Value Coverage: This will reimburse you for the value of the items you lost or that were damaged in your rented home.
- Replacement Cost Coverage: This will cover the costs of replacing the items you lost or that were damaged in your rented home.
"Renters insurance will reimburse you the same amount whether your bike is stolen from inside your apartment or while parked outside your
favorite coffee shop, but whether your insurance pays what your property is
worth (actual cash value) or the cost to
replace it (replacement-cost coverage) depends on the details of your policy," Trulia explains.
So, is renters insurance a good idea? Yes. With renters insurance, you can rest assured that, even in the event of unexpected peril, you're not alone in covering the costs of loss and/or damages.
What Is Not Covered by Renters Insurance?
It's important to know not only what is covered by renters insurance, but also what is not covered by your renters insurance policy. According to NationWide, the following items are may not be covered by renters insurance.
- Expensive collectibles and valuables like jewelry may not be covered under a basic renters insurance policy. These items may require additional coverage.
- If you're operating a small business out of your home, the items associated with your business may not be covered by your renters insurance policy. You should check with your provider to make sure your home business is covered, or seek additional coverage elsewhere.
- Your motorized vehicles (use or ownership of one, including aircrafts and watercrafts) will not be covered by your renters insurance, even if it is parked on your rented property. That said, again, personal belongings that you keep inside these vehicles are typically covered by renters insurance.
Your renters insurance policy is also limited, and it's up to you to decide how much personal property coverage and liability to purchase. For example, you might decide to buy $100,000 in personal property damage and $150,000 in liability coverage. Your coverage won't exceed that monetary limit.
How Much Is the Average Renters Insurance?
Because there are different renters insurance policies and it's up to you to decide how much coverage and liability you want to purchase, renters insurance costs vary. Likewise, what you pay for a renters insurance policy will also depend on your credit history, where you live and other factors.
That said, a 2017 Insurance.com analysis suggests that the national average renters insurance rate for a policy with recommended coverage levels of $40,000 for personal property and $100,000 of liability protection is about $17 a month. Renters insurance is, therefore, typically very affordable.
Where Can I Purchase Renters Insurance?
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AnnaMarie Houlis is a feminist, a freelance journalist and an adventure aficionado with an affinity for impulsive solo travel. She spends her days writing about women’s empowerment from around the world. You can follow her work on her blog, HerReport.org, and follow her journeys on Instagram @her_report, Twitter @herreportand Facebook. 
