What is Renter's Insurance?

Renter's insurance can be a worthwhile investment as it protects one's possessions while renting an apartment or home. Renter's insurance protects against fire, theft, and damage to property that the tenant owns themselves. While a landlord may foot the bill for damage done to the apartment itself from fire or the elements, only renter's insurance will cover the tenant's personal possessions.

In addition, some renter's insurance policies offer liability insurance protecting individuals who reside in the rented property and even offer protection against paying out of pocket for damage caused by the tenant to the rented property.

One large misconception is that renter's insurance is expensive when in reality it often costs less than a few hundred dollars a year. For that cost, an insurance policy will usually cover the replacement costs of the tenant's personal possessions such as electronics, clothing, furniture, and computers. Higher tiered policies may also cover liability insurance for injuries that occur in the rented property and offer higher dollar amounts of coverage.

Common renter insurance policies ask the individual to list the value of all the items that they would want replaced in the event of damage, theft, or fire. The policy will usually cover up to a certain dollar amount per year given to the renter for items that are covered under the policy. Some policies may simply show a set dollar amount that will be given to the renter in the event that all of their possessions are lost or stolen.

Other policies may ask for a list of each item that needs to be replaced and offer a dollar amount equal to the value of the item when it was purchased or the value of a similar item to replace it.

Some insurance policies require a deductible to be paid when a claim is filed, either a percentage of the amount being requested for the claim or a set fee. Policies are tiered in their level of coverage, plans that offer higher dollar amounts of coverage or offer no deductibles may cost more but offer better piece of mind. At the time a claim is made, the insurance provider may visit the site or request photos of damage or stolen property.

Factors that affect the pricing of insurance policies as well as the deductibles and coverage limits include the size and location of the rented property, the dollar amount of items at the location, whether or not liability insurance is chosen, and the crime rate of the location where the property is located.

Individuals interested in renter's insurance may be able to get it through their existing insurance company providing them with insurance for another area of their life such as life insurance or auto insurance.

Renter's insurance is designed for those living in any property that they do not own or pay a mortgage on. It is also ideal for college students regardless of whether they are living on or off campus. For any of these individuals, renter's insurance can cost far less than the cost of replacing their personal possessions in the event of damage, theft, or loss.