Do you need renters insurance?

Your landlord’s insurance won’t cover your personal items, but renters insurance is usually very affordable.

renters insurance agreement

1  What it covers

Renters insurance typically includes three types of coverage:

  • Personal property coverage: Covers your belongings. 
  • Loss of use: Pays your additional living expenses if you have to move out of your place for a short time because of damages from a covered loss.
  • Personal liability: Protects you if someone is injured in your home and pays legal costs if you are liable and taken to court. 

2  Floods not included

Most renters policies will cover losses due to fire, smoke, theft or vandalism, and certain kinds of water damage. They don’t, however, cover losses due to floods. Visit the National Flood Insurance Program for information about flood coverage. 

3  Know your policy limits

Some policies limit payments for certain kinds of property. Common limits are $100 for cash, $2,500 for items used for business, and $500 for jewelry and watches. Ask your agent about buying additional coverage for expensive items you own. 

4  The fine print

Let’s say you paid $1,300 for a laptop two years ago, but now the same kind is selling for $500. A basic renters policy would pay $500 if your laptop was destroyed. You can buy a policy that will cover the replacement value of your items, but it will cost more.

5  Mom and dad may have you covered

If you’re a dependent, your parents’ homeowners policy may cover your stuff even if you’re not living at home. In that case, you may not need renters insurance. This coverage is usually limited to 10 percent of the personal property coverage in the homeowners policy.

 

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Last updated: 03/09/2017

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