Renters insurance, purchased through an insurance company, provides a financial safety net for apartment and rental unit dwellers in the case of theft, damage, natural disasters and injury liability. If your apartment gets burglarized, an insurance claim will pay to replace personal belongings like clothing, appliances, furniture and electronics.
The average cost is less than $15 a month. A typical insurance policy may cover your personal property against theft or damage for up to $25,000 and liability to $100,000 after the deductible.
Carrying protection is a cheap way to assure you don't take a big, or even life-changing, financial hit. Even if you don't own many expensive items and feel as if you don't need coverage, having to replace everything you own adds up. As well, if someone gets injured in your apartment, you could be on the line for thousands of dollars in medical bills.
Purchased coverage protects you from a lot of liability and financial burden. But, it can also get confusing. What exactly is it and who needs it? It's important to know about renters insurance, what renters insurance protects and the cost of renters insurance.
In general, insurance of any kind — car, homeowners, flight, medical — protects you from financial burden when something goes wrong. It's a gamble. You pay the insurance company monthly or yearly, and then hope you never need it.
Rental policies are no different. Having coverage means you're protected from financial loss if anything happens to your personal property in your apartment, or liability if anyone gets injured inside it. It provides coverage for your possessions if they're lost, damaged or stolen or if there's injury or death within your walls. It can also cover related expenses like damage to your apartment building or grounds deemed your fault or additional living expenses if your apartment is uninhabitable.
Also known as Form Number HO-4 Policy, anyone leasing a rental property can purchase coverage, including an apartment, duplex, condo, studio, townhouse, loft or single-family home.
The simple answer is everyone. Without it, you could be on the line for a lot of money. You could lose all your stuff or go into financial ruin covering another entity's doctor bills. You could have trouble having a place to stay.
While it's a good idea for any renter to have coverage, it's particularly important for people in some key circumstances:
The real question isn't who needs it. The question is can you afford to lose everything if you don't have it? And, no matter how careful you are, you can't control your neighbors' actions or negligence. What if they leave an entrance door open and a thief enters? What if they accidentally start a fire next door? Then, you're on the hook for damaged property.
There are two basic types of plans that cover the items listed above. And, like any kind of coverage, you're able to add additional tiers to it, in dollars or circumstance.
A basic policy usually covers damage or loss to your personal property. If your covered items need replacing, your insurance company will replace them or award you the cost to do so. This is the minimum coverage you should carry.
Liability covers you if you're responsible for an accident or someone else gets injured in your apartment. If your dog attacks or your bookcase falls on them and they're injured, you're financially covered for their medical bills and loss of income to the coverage limits and deductible of your rental insurance policy. This is known as “Medical payments to others."
But, it's not just bodily harm. If your visitors' property gets damaged in or around your apartment, your policy covers that, as well. And, if someone takes you to court over your liability, it may even cover legal fees.
When replacement cost coverage kicks in and you're paid out, it can happen one of two ways. If you receive Actual Cash Value coverage, the company will pay you for the actual listed value of your items at the time they were lost. If you're awarded Replacement Cost, they will pay you the amount that covers the cost to replace the items after the fact.
What insurance is best for you is up to the individual. Renters insurance is quite affordable, so why not get the broadest coverage possible? You never know what can happen or to whom. As far as how much coverage, that depends on how much stuff you have and what it's worth. Take inventory, decide on a total value, evaluate the deductible and calculate how much is necessary.
Renters insurance primarily covers damages and theft. But, what are the loss events that are actually covered perils? What personal property does it cover? And, what else does it cover besides your tangible personal items?
Property insurance coverage is generally concerning the contents of your apartment. Your stuff. Typically, general renters insurance covers everyday items like furniture, clothing, home goods, kitchenware, appliances and food and basic electronics like your laptop or television.
But, your policy won't cover all of your personal possessions equally. Some categories have a secondary coverage limit. If you have expensive items, those might require additional coverage. Pieces like high-end electronics, expensive jewelry, collectors' items, rare objects and fine art will push you past your policy limit and may require more coverage.
Damage to your personal property can come in many forms. Sometimes, your television falls off the wall or an expensive chair breaks while you're sitting in it. But, property coverage's primary goal is to protect you from personal or natural disasters. While what is and is not considered a covered disaster differs from place to place, these are typical in most policies:
Your liability coverage protects you up to the amount of the policy. This can include repayment of hospital or doctor bills directly or judgment when having been sued over an incident that causes injury or damage. This includes injury caused by an object in your apartment, by your pet or by you or your family directly.
In addition to medical expenses, liability can cover court judgments against you for injury or damage as well as your and their legal expenses.
When disaster strikes, damage to your personal items isn't the only thing you can lose. In any of the events listed above, you can lose your ability to live in your apartment entirely.
Most policies also cover living expenses if your apartment isn't habitable. It's called “loss of use" or “additional living expense" benefits. It can allow for a temporary apartment or rental unit or to cover hotel bills until you can move back home. It can also cover restaurant meals since you can't cook and other expenses deemed essential.
Many do not realize that such policies don't just cover events that happen inside your four walls. It can protect you from a bevy of circumstances away from home. Your policy may cover if:
Your policy may even cover everything in your storage unit or bank safe deposit box. It might cover damage found during inspection after move-out that's above your security deposit. Covered items and circumstances vary from policy to policy. Check yours for your exact coverage or shop around.
While there are a wide swath of circumstances and items your renters insurance covers, it's not everything. There are plenty of situations where you might be on your own when you don't have covered loss.
The difference between renters insurance and homeowners insurance is pretty clear. Renters are for renters. Homeowners are for homeowners. But, there are other subtleties.
Homeowners insurance covers the contents of your home, plus the structure, the interior and the property. Renters insurance ends at the contents. The rest is the purview of your landlord. They're the homeowner. Similarly, your landlord is responsible for liability for injury for anything caused on the property outside your apartment. Homeowners are liable for the entire space, property line to property line.
Unless you're a financial titan, probably yes, you do. It's better to pay a few hundred dollars a year than possibly thousands in liability and property damage replacement. It's cheap. The simplest answer is just to do it. But, what about more specific circumstances?
Plenty of people don't have a lot. Or, they have downsized and are living a minimal life. But, most people own more than they think. Every drawer, every closet, every cabinet. Small appliances, computers, televisions, furniture, clothing, shoes. It all adds up. The cost of insurance surely is less than it would take to replace even the smallest inventory.
And, as discussed, it's not just property, it's liability. You could have nothing in your apartment but still be liable if someone gets injured in it. Or, if you do physical damage to the building itself. Then, you're on the hook for a lot of money, zen master. If your landlord sues you and you aren't covered, you'll carry that debt for the rest of your life.
Your landlord's insurance only covers the building itself, common areas and the grounds. Your stuff — as well as your liability — isn't covered by your landlord's insurance company.
Again, your landlord isn't responsible for your stuff unless they're proven negligent in court. Otherwise, that's your concern. In fact, it's illegal for your landlord to have insurance on your personal items. Your landlord has no interest in your stuff.
In an ideal world, you will never experience a break-in. But, that's not the only thing that is a problem, as we have stated. There's fire, water damage or someone injuring themselves on your property. These can all cost you a lot of money. And having renters insurance will cover you in these situations when you file a claim.
You could live in the most exclusive gated apartment community in the safest city in the country, and life can still happen.
Rental insurance is actually really cheap. It's probably the least expensive insurance you ever purchase. But, what does renters insurance cost?
According to home master Bob Vila himself, as of August 2022, renters insurance typically ranges from $101 to $262 a year. That's $8.41 to $21.83 a month. Even at the high end, that's affordable for most. But the national average is just $168 a year, which is just $14 each month to protect you from thousands in losses.
Like rents and cost of living, prices differ from state to state. The cheapest states for apartment dwellers are Wyoming, at $8 a month, and Iowa and Vermont at just $9. On the other side, the most expensive states are Louisiana, Georgia and Mississippi. But, even as the priciest, that's just $22, $20 and $19 monthly.
As well, there are other factors that affect your renters insurance quote and how much your renters insurance costs besides the ZIP code. Among these are:
Coverage is cheap, helpful and easily obtainable. It's a low-cost way to protect your assets and finances. For a few bucks, you can protect yourself from financial ruin and future debt with a minimum deductible.
Most home and auto insurance companies sell insurance for apartment residents. In fact, if you already have auto coverage from a particular provider, you can most likely receive renters insurance discounts if you bundle your coverage in an umbrella policy.
Consult independent sources online or through the National Association of Insurance Commissioners for further information on which company and how much renters insurance are best for you. NerdWallet rates Amica, Country Financial, Nationwide and Travelers among the best insurance company values, while Forbes ranks American Family, Lemonade, USAA and Erie highest.
If you're looking for a new place to live, check out the current listings of availabilities around the nation on Apartment Guide, and then decide how much coverage is best for you.
Michael is a Philadelphia-based writer with a variety of interests, including music, concerts, TV, politics, travel and sports. His background includes a decade as a programming executive in network television, six years as a marketing executive at a technology company, and time at two magazines and two advertising agencies. He currently works as Craft Beer & Brewery contributor for the Visit Philly Greater Philadelphia Tourism Bureau and sits on the board of a non-profit law firm that assists veterans with disabilities. Michael is a proud Syracuse grad (Newhouse) who has lived in Wichita, Albany, Chicago, Washington DC, Boston and beyond.