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What it covers
Renters insurance typically includes three types of coverage:
- Personal property coverage: Covers your belongings – even items stolen out of your car or while you’re traveling.
- 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.
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Your landlord might require it
Renters insurance isn’t required by law. Some landlords might require you to have a policy that would pay if someone is hurt in your rental or if you damage the rental. It might not cover your personal belongings. You might need your own renters policy to cover your stuff. Ask to read the policy to know what you’re buying.
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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 cover losses due to floods. Visit the National Flood Insurance Program for information about flood coverage.
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Know your policy limits
Your policy will pay to replace or repair your belongings up to a dollar limit. This is the most the company will pay, even if the cost is higher. Fill out a home inventory to know the value of your belongings to be sure you have enough coverage.
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 more coverage for expensive items or collectibles.
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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.
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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% of the personal property coverage in the homeowners policy.
Resources
- Texas law encourages renters to buy flood coverage
- What to know about deductibles
- Do I need insurance for my self-storage unit?
- Collectibles: Why you may need extra insurance coverage
- How to check for apartment fire safety
- Is water damage covered by home insurance? (video)
- Why you need renters insurance (video)
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