Renters insurance is one of the most cost-effective and important investments you can make as someone who rents a place to live, whether it’s in a duplex, apartment or single family home. Many property management companies require their tenants to purchase renters insurance. Even if your landlord doesn’t require this type of coverage to rent an apartment or house, you should still consider it. Renters insurance covers the belongings and assets of the person renting the property.
While renters insurance covers property owned by the tenant, another type of insurance coverage—landlord insurance—protects the investment of the property owner (the house or apartment itself). Landlord and renters insurance coverage is separate from homeowners insurance. Homeowners insurance won’t usually cover rented homes. Landlord insurance offers additional commercial protections that aren’t available with traditional homeowners coverage.
Personal Liability Insurance vs. Renters Insurance
It’s important to understand the difference between renters insurance and personal liability insurance. Renters insurance is the comprehensive policy that protects you and your belongings, while personal liability insurance is a type of coverage included under most standard renters insurance policies.
Personal liability insurance helps pay for another party’s medical bills or repairs to their property in the event that you’re legally responsible for either their injuries or damage. In addition, this liability coverage can help protect you from legal expenses if you’re sued due to something that occurs in your rented home. Some examples of when personal liability insurance can help cover incurred costs include:
- Your dog bites someone on the property
- A delivery person slips and falls while delivering a package
- A tree falls from your rental property and damages a neighboring home
Personal liability insurance is an important safety net for renters and covers a wide range of scenarios. However, most policies start at $100,000 of coverage, so you may have to purchase additional coverage if you want more protection. Your coverage may also vary if your rental property has features that some insurance carriers consider high-risk, such as a trampoline or pool.
Landlord Liability Insurance
Landlord insurance typically only covers the structure of the building and not the tenants’ belongings. It might cover some personal property items that the landlord supplies, such as appliances or lawn equipment, but none of the tenants’ personal belongings. Landlord liability coverage helps pay for instances of tenant injury due to the landlord’s negligence, such as failure to repair parts of the home. It can also help pay for damages in the event that the tenant does something illegal and the landlord fails to prevent it.
What does renters insurance not cover?
Renters insurance can cover many common disasters, from fire and smoke damage to lightning, theft, explosions or wind storms. Plumbing issues—including burst pipes or water leaks from upstairs neighbors—may also be covered. Floods and earthquake damage typically aren’t covered by renters insurance, but you can usually add this type of coverage as a rider to your existing renters policy.
A renters policy’s personal liability coverage may also help cover you in the event of other things a tenant could be held responsible for, including injuries to guests such as dog bites. A good rule of thumb is that tenants are responsible for the safety of their guests, and if someone is hurt in your home or as a result of things that happen there, you could be liable.
One aspect of renters insurance to be mindful of is how your policy approaches reimbursement for damaged property, either through replacement cost or cash value. Replacement cost is typically more expensive up front, but it will help pay for what it would cost to replace the damaged item today. Cash value coverage will only cover the current value of the goods. If an item has depreciated, the payout may not be enough to cover the cost of a replacement.
Some renters insurance policies do not include coverage for temporary living expenses in the event that your home is under repair, but many do. Before you buy your renters insurance liability policy, make sure you understand what is and isn’t covered.
Does landlord insurance cover tenant damage?
Landlord insurance coverage does offer robust protections, but it can often cost more than standard homeowners policies. It can cover damage to the property, but there are limitations.
For example, landlord insurance would likely cover fire or water damage, damage from natural disasters or damage to the property’s appliances. But if a tenant vandalizes the unit or otherwise intentionally damages it, the claim may be denied. Extra coverages, like burglary or vandalism insurance, may be available to offer more protection than a standard landlord insurance policy alone.
Understand Your Renters Insurance Coverage with SelectQuote
Renters insurance is an easy and typically inexpensive way for you to protect yourself, your family and your belongings when you rent. With the cost of renters insurance averaging around $15 a month, it’s an affordable option for most renters and can give you priceless peace of mind.
When you shop for renters insurance with SelectQuote, we’ll compare rates from several trusted insurance companies to save you time and money. We can help you explore coverage options for your apartment or rental home, whether you’re looking for coverage that can replace all your belongings or to protect specific valuables.
If you have questions about your renters insurance coverage—including how much coverage you need for your belongings—contact SelectQuote today.