A renters insurance policy provides most of the benefits of a homeowner’s policy with one notable exception.  Renters insurance does not include coverage for the dwelling or building structure.  When you rent or lease, your landlord’s insurance only protects the building itself, it doesn’t protect your personal belongings should you have a loss due to a covered event.  A renters insurance policy covers your personal property, and almost always includes replacement cost coverage.  It also includes liability insurance for an injury to another person or damage to another person’s property that occurs within your rented residence.  Renters insurance is designed to make you whole again and return you to essentially the same financial condition you were in before the loss.

Renters insurance typically provides coverage for the following situations:

  • Personal property – furniture, computer equipment, electronics, clothing, and other valuables
  • Personal liability – if someone is hurt or their personal property damaged
  • Damage to your rented home caused by the renter’s negligence – a good example would be leaving your iron on and causing a fire.

Many rental properties and landlords require in their leases that tenants carry renters insurance.  The landlord frequently must be listed as an “additional insured.”  Renters insurance also makes sure that the tenant knows that the landlord is not responsible for their belongings or damage to the property, and that the tenant has coverage for them.

Renters Insurance Myths

Renters insurance is expensive!  Actually, renters insurance is very affordable and provides basic protection of your personal property.  It also protects you in case of a liability lawsuit.

The landlord’s insurance covers me.  Your landlord’s insurance generally only covers the building where you live… not your personal belongings or liability.

I don’t need personal liability insurance.  Your landlord’s policy only covers the landlord’s negligence or liability, but does not include the renter’s liability if the renter is found to be liable for something that happens in your rented residence.  You could be held responsible if a visitor to your home is injured or their personal property is damaged during that visit.  Without liability coverage, your current and future earnings could be at risk.  Renters insurance coverage may also provide legal defense costs.

I don’t own much.  Most people’s belongings are worth more than they think and are more expensive to replace than they imagine.

You can’t rely on your landlord’s insurance to cover your personal property or events that take place in your residence.  Renters insurance provides the financial protection you need and the peace of mind you want.