If you’re in the market for an apartment, don’t make the mistaken assumption that your landlord will be responsible for your personal belongings in the event of a theft, fire, or natural disaster. What many renters these days don’t realize is that landlords are under no legal obligation to provide insurance coverage for a tenant’s personal belongings; instead, landlords need only carry liability coverage and insurance on the residential building itself. For this reason, renters themselves are encouraged (and, in some cases, required) to purchase renter’s insurance for additional coverage and peace of mind. Currently, about 40% of renters carry some form of this coverage, with numbers only expected to increase in the future.

What is Renter’s Insurance?

Renter’s insurance is a type of insurance coverage designed to protect a renter’s personal belongings when they’re living in an apartment or other residential rental property. It can be helpful to think of it in a manner similar to homeowner’s insurance, with the exception that renter’s insurance doesn’t cover the actual dwelling or property. That’s the landlord’s responsibility to protect. Instead, renter’s insurance may provide coverage for the tenant’s furniture, small kitchen appliances, and other personal belongings.

What Does Renter’s Insurance Cover?

Specific coverage can vary from one renter’s insurance policy to the next. However, most renter’s insurance policies will cover the cost of replacing a tenant’s belongings damaged, destroyed, or otherwise lost as a result of:

  • fire
  • natural disaster
  • flooding
  • theft/burglary

In addition to providing protection for your personal belongings, a renter’s insurance policy may also cover personal liability, damage to another person’s property, and even living expenses. For example, if an apartment fire rendered your apartment uninhabitable, your renter’s policy may kick in and cover the costs of a temporary living solution.

Some Landlords Require Renter’s Insurance

If you’re wondering whether or not you need renter’s insurance, the answer really depends on your landlord or management company’s policies. These days, an increasing number of landlords are requiring tenants to carry renter’s insurance as part of their lease terms, so be sure to find out whether or not this applies to you. If it does, then you will most likely need to provide proof of renter’s insurance to your landlord prior to moving in. Failure to carry renter’s insurance could result in the termination of your lease.

However, even if your landlord doesn’t require you to carry renter’s insurance, it’s generally in your best interest to have it. After all, it’s relatively inexpensive and can provide much-needed peace of mind when you’re renting an apartment. On average, a renter’s policy costs about $12 per month or $144 per year. Most renters would agree that the small cost is more than worth the added peace of mind—especially when you take into consideration the fact that renters are 50% more likely than homeowners to be victims of theft/burglary.

What to Look for in a Renter’s Insurance Policy

Convinced that you need to protect yourself with a renter’s insurance policy? Good. Now, where should you start? If you’ve never purchased a renter’s insurance policy before, the prospect of searching for the perfect policy can be a bit intimidating. Fortunately, there are some specific things you can (and should) look for to find the ideal policy for you.

For starters, make sure that the policy you end up going with will cover the replacement cost of any damaged, destroyed, or stolen belongings. For example, if you paid $1,000 for a laptop four years ago and it’s stolen from your apartment tomorrow, you’ll want to make sure that your policy will cover the total replacement cost of $1,000. Some policies will only cover the current value of the item (which probably isn’t much for a four-year-old laptop).

When shopping for a renter’s insurance policy, you’ll also want to look for a low deductible. The last thing you want is to end up needing your renter’s insurance policy after your apartment floods, only to find that you need to pay a $1,000 deductible before your coverage will kick in. Because renter’s insurance is already pretty inexpensive, it’s almost always worth it to pay a few bucks more per month and have a lower deductible than to opt for a high deductible.

Finally, make sure that your renter’s insurance follows you wherever you go and isn’t tied specifically to your apartment. This way, if you end up moving to another apartment, you don’t have to deal with the hassle of finding a new policy and switching everything over.

How to Save on Renter’s Insurance

Renter’s insurance isn’t expensive by any means, but this doesn’t mean you should pay more than you need to for coverage. Fortunately, there are plenty of ways to go about saving on your renter’s insurance. For example, consider bundling it with an existing insurance policy (such as your auto policy, if you have one). You might be surprised at how much you can save by doing so.

There’s no doubt about it: renter’s insurance is always a good investment. 

Disclaimer: This information is provided as a courtesy, and should not be considered legal advice or real estate brokerage services.