If you plan on renting an apartment, you probably want to get renters insurance. Not only is renters insurance very affordable, renters insurance may also be required by your landlord.
As a landlord in San Francisco since 2005, I require all my tenants to get renters insurance. A policy usually costs between $100 – $200 a month, depending on the deductible and how much stuff you want to insure.
In this article, you're learn what renters insurance covers and doesn't cover and why renters insurance is important.
If you are looking for an affordable renters insurance policy, check out PolicyGenius. PolicyGenius will provide you free, no-obligation renters insurance policy quotes in minutes so you can compare and contrast.
What Does Renters Insurance Cover?
Renters insurance is insurance renters take out to cover their belongings in case of robbery, leak, or some random incident. Renters insurance is not for landlords. Landlords get landlord insurance when he or she has tenants.
The insurance doesn't cover the damage to a landlord's apartment or cost to rebuild. Renters insurance only covers the things in the apartment such a renter's laptop, bicycle, clothing, shoes, and so forth.
Say a pipe bursts and the leak destroys your furniture or a thief breaks in and steals your laptop. If you have renters insurance, you won’t have to replace all that stuff out of pocket. You can file a claim and get reimbursed for damaged or stolen possessions.
A comprehensive renters insurance policy will cover costs to replace your personal belongings, like your furniture, electronics, computer equipment, your clothes, jewelry and appliances.
You should definitely check with the carrier about valuable personal property like jewelry and watches though, as you will have to adjust the coverage amounts depending on their value.
What Renters Insurance Covers
Basic renters insurance will reimburse you for the loss of property (up to your policy’s coverage limit) if destroyed, damaged, lost or stolen in any one of 16 different events:
- Fire and lightning
- Windstorm and hail
- Damage by aircraft
- Damage by vehicle (not your own)
- Smoke damage
- Volcanic eruption
- Falling objects
- Weight of snow, ice, sleet
- Damage from steam-heating/water-heating appliances/systems
- Leakage or overflow of water or steam
- Freezing of plumbing, heating, air conditioning
- Short-circuit damage caused by electrical appliances
Renters insurance can also cover property when it’s not even in your home, like if your laptop is stolen while you’re on vacation; since it’s considered insured property, it’s still protected whether it’s inside your dwelling or not.
A renters insurance policy can protect property damage to others. If a broken pipe in your apartment flooded your neighbor’s residence below, your insurance policy should cover damages to their property.
What Else Does Renters Insurance Cover?
In addition to the insurance covering all your stuff within your property, renters insurance also covers various other aspects to help you get on with your life. .
Personal liability and medical bills
A good insurance policy will also cover costs you may be legally responsible for paying if someone is injured in your apartment. If someone slips, falls and is hurt on the premises, or if your crazy dog or cat bites a visitor and sends them to the ER, your policy should contain medical coverage to cover injuries without a lawsuit being involved, and liability, in the event you are sued over a mishap.
Temporary living expenses
If your residence has been made uninhabitable, insurance can also cover the cost of a temporary place to live. It may compensate you for everything from hotel bills to the cost of food if it exceeds what you’d normally pay through your grocery budget.
Otherwise known as loss-of-use coverage, it’s one benefit of having renters insurance until you’re able to move back in (or find a new apartment).
Other types of coverage
Renters insurance protects against other losses you may not have thought of, giving more value to the idea of taking out a policy.
- Credit card/bank forgery coverage: Your insurance policy safeguards against theft, but can also reimburse you for losses incurred if a thief burglarizes your home, steals your credit card or checkbook, and goes on a fraudulent spending spree. That said, your credit card company should have automatic fraud protection.
- Other people’s property: It’s not just your property renters insurance covers. Say you borrowed a friend’s laptop. If a fire or faucet flood damages it, your policy will cover to replace your property and theirs.
- Items stored elsewhere: Many rental insurance policies will cover for damages to your belongings if they’re stored off-site, too. It may also protect personal possessions stolen from your car, or damaged in a storage facility.
- Food: If your fridge fails and all its contents get spoiled, renters insurance could cover it. There's a reason why you shouldn't buy too many wagyu ribeye steaks at once. You just never know!
Here's What Renters Insurance Does Not Cover
Renters insurance doesn’t cover your belongings under these certain circumstances:
- Natural disasters: Damages caused by flooding, earthquakes, and even sinkholes aren’t covered under renters insurance policies. (Though, surprisingly, volcanic eruptions and windstorms are covered.) If you live in a flood zone, near a fault line, or in a region prone to major storms, consider buying additional, separate coverage.
- Property damage caused by pests: Damages to your property caused by rodents, bugs, pests and other sorts of vermin aren’t covered under renters insurance.
- Items of high value: Expensive valuables may not be covered under your renters insurance policy, like antiques, art or jewelry, vintage family heirlooms, a rare autograph collection, premium appliances, etc. An insurer may limit the amount of coverage they provide since the value of said items may exceed what they can afford to pay out — coverage limits are usually $2,500 for electronic items, $1,500 for jewelry. To include pricier items in your policy, you may need to purchase additional coverage called riders for individual items, or standalone policies, like jewelry insurance.
- Damages from terrorism or nuclear war: Before 9/11, standard renters insurance policies tended to include protection against terrorism at no cost. But today, you’d need to pay an extra cost to receive coverage, and even then, it would only cover damages to your apartment, not to the rest of the building, unless your landlord or property owner paid for separate terrorism coverage.
The Cost Of Renters Insurance
A basic policy for a single apartment in the San Francisco area will cost $17.50 per month or $210 per year, with $10,000 in personal property coverage and $100,000 of liability coverage after after a $250 deductible.
Annual premiums are considerably more affordable than the cost of replacing individual items. Of course, the lower the value of your property, the cheaper your insurance premium will be.
Since 2005, I've never heard of my tenants paying more than $220 a year for renters insurance. The cost is usually $100.
Landlord Insurance Won't Cover Damage To Your Things
It's important to be clear that landlord insurance is completely separate from renters insurance. Landlord insurance covers the structure of the apartment/home and all the contents within the home, such as the $3,000 range and $1,000 dishwasher you never use.
Regarding pets. Most renters insurance policies cover pets under the personal liability portion of your policy — meaning if you disclosed Fido’s existence to your insurer and he bites someone, you’re covered when it comes to medical expenses and legal fees.
That’s why many landlords require tenants with pets to have renters insurance. It’s also why owning certain dog breeds jacks up your premiums or even makes it downright impossible (or at least much, much harder) to get a policy.
If you're looking for homeowner insurance, check out PolicyGenius. They are a one stop shop so you don't have to go to individual carriers and apply.
Renters Insurance Could Get Your Brand New Things
When you’re filling out the forms, make sure you check the box for replacement-cost coverage and not actual cash value.
Actual cash value means if you have a 20-year-old couch, and something happens, the insurance company will pay you what a 20-year-old couch is worth. That's no good! Because a 20-year-old couch is worth nothing to most people.
If you get replacement-cost coverage, you’ll get reimbursed for the cost of a brand new couch. And trust me, it feels great to get a brand new anything.
Replacement-cost coverage will add between $20 and $50 to your yearly premium, but it’s worth it. If something happens, you’ll get back thousands of dollars instead of hundreds.
Get Renters Insurance
Renters insurance is inexpensive and a no-brainer to buy. I once rented an apartment where a leak in the roof upstairs dripped over my laptop all night long. It was a disaster! I lost all my files. Back then, there was no such thing as cloud backups, so I had to start all over.
You can get a great renters policy on PolicyGenius, the #1 marketplace for your insurance needs. Instead of applying to different insurance carriers, apply on PolicyGenius and have different insurance carriers offer you their rates. They are the best platform today and I've met their co-founders.
If you are going to rent, get renters insurance. Hopefully, you'll eventually want to buy your own primary residence and get at least neutral inflation. Over the long term, the return on rent is always -100%.
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