What Is Renter’s Insurance?
Your landlord insures the building you live in, but they aren’t responsible for your belongings. Learn how to keep your possessions and your bank account safe with an affordable renter’s insurance policy.
If you don’t own the space that you live in, you might be wondering: Why do I need insurance? Even though your landlord is responsible for property loss to your rented apartment, home, or townhouse, they aren’t responsible for accidents or property loss that occur in your space. Renter’s insurance picks up where your landlord’s insurance policy ends.
What Does Renter’s Insurance Cover?
As a tenant, you don’t have to worry about unexpected events that affect the structure you live in—your landlord takes care of that. However, if an unexpected event leads to personal property loss, a liability lawsuit, or a lengthy hotel stay, you’re responsible for covering costs. With renter’s insurance, you can ensure that an accident doesn’t drain your bank account.
Renter’s insurance policies typically contain three types of coverage:
- Personal property coverage: Your renter’s policy will pay to repair or replace personal property after a covered loss, such as a fire or theft. Personal property can include furniture, jewelry, electronics, clothing, and other belongings inside your space. Each renter’s policy has a personal property coverage limit that specifies the maximum amount your policy will pay for property damage during your coverage term.
- Personal liability coverage: Unforeseen accidents can lead to lawsuits. If a guest falls and breaks their arm in your apartment and sues you for damages, your renter’s insurance policy will cover defense costs and settlements. Personal liability coverage also pays for minor medical bills if someone gets hurt on your property but doesn’t sue.
- Additional living expenses: If a fire severely damages your rented space, you may be unable to live there for a few days or even weeks. Renter’s insurance policies protect you against financial loss by paying for hotel bills, food costs, and other unexpected living expenses after a covered claim.
You can buy a renter’s insurance policy for any space you occupy, but the two most common options are home and apartment rental policies.
Home Renter’s Insurance
Not to be confused with homeowner’s insurance, home renter’s policies cover personal property, liability, and additional living expenses for tenants in rented homes. The limits in your home renter’s policy will differ based on the amount of personal property you own and the area you reside in.
Apartment Renter’s Insurance
Many people skip out on apartment renter’s insurance because they don’t think they have anything significant to protect. However, a small property loss claim could still wreak havoc on your bank account. Apartment renter’s insurance is a cost-effective way to protect your financial interests as a tenant.
Renter’s Insurance Personal Property Considerations
Many renter’s insurance companies limit coverage for high-value items such as coins, fine art, and jewelry. If your property’s value exceeds the specified coverage limit on your policy, you will need an additional scheduled personal property floater policy to cover the difference. Scheduled personal property floaters list your high-value items and provide designated coverage limits for each one.
Before you can determine if you need a scheduled property floater, you need to know how much your property is worth. Insurance companies often recommend creating a home inventory that lists each item you own and its value. As you accrue items, you can update your list and increase your policy limits.
Home inventories aren’t mandatory, but they help ensure that your belongings are adequately insured. Plus, home inventories aid in the property claim process. When you file a claim for an item on your home inventory list, you can show your insurance company exactly when you bought it and how much it cost. Most insurance carriers recommend updating your list every six months and backing it up on the cloud.
Partner With Southpoint for Affordable Renter’s Insurance
Finding the right renter’s insurance policy can be challenging, especially if you need more than the basic coverages. Our Southpoint insurance experts can help you identify the value of your possessions, the limits you need, and any additional coverages you might require.
How Much Is Renter’s Insurance Coverage?
Renter’s insurance is one of the most affordable coverages around. According to the Insurance Information Institute, the average cost of renter’s insurance in 2018 was $179 a year, or less than $15 a month. The cost of your renter’s insurance policy depends on many factors, such as:
- Zip code: Renter’s insurance premiums vary by city, state, and neighborhood. If you live in an older property with minimal security features, you’ll pay more for renter’s insurance than someone living in a new property. Similarly, if you live in a zip code with a high crime rate, your insurance premium will reflect that risk.
- Coverage limits: Your renter’s insurance premium directly reflects the amount of coverage provided. If you only need $20,000 of coverage for your possessions, you’ll pay far less than someone with a $250,000 limit.
- Credit score: Insurance companies prefer to cover financially stable renters, and your credit score is a good indicator of how well you handle your money. The higher your credit score is, the lower your renter’s insurance rate will be.
- Deductible: Each renter’s insurance policy includes a property claim deductible. You are responsible for paying the property deductible before your coverage kicks in. Policies with low deductibles cost more than policies with high deductibles.
Southpoint Is Your Source for Renter’s Coverage
At Southpoint, we use our industry expertise to find comprehensive and affordable coverage for each client. Whether you rent a one-bedroom apartment or a three-story house, our team can identify the best renter’s policy to fit your needs. We can also help you save money by bundling your renter’s and auto insurance. Don’t settle for subpar coverage—contact Southpoint today.