Renters Insurance: Do You Need It? What’s Covered? What’s Not Covered?

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By Andrea

The fireplace I have yet to use. Need renter's insurance first, in case I burn the building down.If you rent an apartment (or a house), then you’re probably wondering if you should buy renters insurance or not.

My first introduction to renters insurance was when I worked as a property manager right out of college.  We had an apartment flood (due to no fault of the owner), and the tenant demanded reparations.

I had to explain to the tenant that this is why it was suggested that they buy renters insurance when they moved in.  But the tenant did not understand why they were not covered by the property owner’s insurance. They were not happy, and I got my first taste of the downsides of property management.  In the end, the property manager sent the company cleaners to the apartment to clean all that they could, and the tenant had to deal with the rest.

So, who really needs to buy renters insurance?

Here’s what you need to know about insurance for renters…


Everyone who rents an apartment, a house, or condominium or a townhouse needs renters insurance.

If you owned a home, you would need to buy homeowners insurance.

The same is true when you rent.

When you sign your lease, your landlord or property manager should inform you that you need to buy renters insurance.  Some property owners absolutely require it.  Whether they tell you to get insurance or not, it is up to the tenant to follow through with it.  Lack of information, does not make damages and loss the problem of the property owner.

According to Reliance Property Management:

Renters insurance is there to protect all of your personal belongings, as well as to protect you from huge medical and legal bills should someone get injured in your unit.”


How Much Coverage Do You Need?

First, take an inventory of your belongings and have an insurance agent help you to determine the value of the items in your home.  That is how you determine the amount of renters coverage you need.

Here’s a quick method of calculating how much your items are worth.  And here’s another home inventory worksheet (.PDF) that is a little more detailed.

Most renters need a standard renters insurance policy, plus a rider or two.  If you have expensive electronics and jewelry in your home, then you will need to purchase riders for coverage on those types of items (among others).

What Does Renters Insurance Cover?  

  • Insurance pictures showing screen door damage.Renters insurance covers more than just your belongings that are damaged by a fire, or if the home is hit by lightening, or if you experience smoke, windstorm or hail.
  • You are also covered in the event of theft, or if someone is injured in your apartment.
  • Should your house become uninhabitable, your renters insurance will also cover increased living expenses.
  • And finally, if you lose property while traveling, your renters insurance should cover that, as well.

What Is Not Covered?  

  • Rental insurance carriers will not cover you if you have certain types of dogs (or they might require an additional premium).
  • Flood and earthquake damage are not covered in renters insurance, so if you live in a flood plain or earthquake zone, you will want an additional rider.
  • Other items that may require riders for extra coverage are: water pipe breakage or freezing, falling objects, and riots or civil commotion.

If you happen to live in a coastal area, then you may find that insurance companies are reluctant to issue new homeowners and renters insurance policies. In that case, you’ll need to find an insurer of last resort.

Here’s how to find an insurer of last resort.

What Are My Options When Purchasing Renters Insurance?

You have a couple of decisions to make before you buy renters insurance.

First, you need to decide if you want your insurance to cover replacement cost, or actual cash value of your items.

You also need to decide how big your deductible should be in the event that something goes wrong in your unit, or if a theft occurs.

The Perks Of Having Renters Insurance
Having renters, insurance will give you peace of mind in the event of theft, or some other problem with your rental unit.

Keep in mind, you can combine your renters insurance with your auto insurance and you will barely even notice the modestly increased cost.

Here are some other ways to save money when you buy renters insurance:


Things that will increase your renters insurance rates.


Is There Any Reason Why You Would Not Get Renters Insurance?

I guess if you have no belongings to speak of, then you could probably get along without renters insurance for awhile.

Renters insurance does have a minimum property value that may very well be higher than the value of what you own.

However, should your belongings be destroyed you will quickly realize that your mattress and CD collection cost a bit more to replace than you initially thought.

How To Buy Renters Insurance

If you have a vehicle (or any other item that is already insured), then you should contact your current insurer first and ask them how much more it would cost to add renters insurance onto your plan.

If you’re exploring renters insurance companies from scratch, then you’ll want to request a free renter’s insurance quote online from these popular rental insurance companies:

[Each link goes to the company’s renter’s insurance information] 



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Compare online quotes from renters insurance companies.