Quick take: Do I really want renters insurance?

• Renters insurance can help you repair or replace property after loss due to many types of damage or theft.
• It can also provide coverage for an accident at your residence.
• Policies usually have very affordable annual premiums.
• Note that your landlord’s property insurance doesn’t cover your belongings.

Q:Question

I just got my first apartment! It’s tiny, and I don’t own a lot of things, but my parents are encouraging me to get renters insurance. Here’s my question: Since my landlord already has insurance on the property, what reason would I have to get renters insurance?

A:Answer 

Simply put, renters need insurance to protect their stuff. As a renter, you don’t own the structure you live in and you are not likely to insure it. The belongings inside your rental, on the other hand, are probably important to you. One reason to carry renters insurance is to have coverage for your belongings.

For example, renters could provide coverage in the event of:

• A kitchen fire. A renters policy could help with the costs to replace items destroyed in the fire. If your place can’t be lived in while repairs are being done, renters insurance may also provide coverage for a place to stay, meals and related expenses.
• A burglary. Renters insurance could help with the costs to replace the covered stolen items.
• A guest falls and gets hurt. The personal liability coverage included in a renters policy could help with the payment of medical bills or other expenses related to the accident.

Q:Question

What does renters insurance cover?

A:Answer

In general, renters insurance provides coverage for your belongings, such as clothing, household items and furniture. It also includes electronics and jewelry, although limitations may apply.

A renters policy also typically includes:

• Personal liability coverage — in case you are found legally liable for bodily injury or property damage to someone else in an accident where coverage applies.
• Personal property coverage – even when you are traveling and away from home.
• Additional living expenses – when you can’t stay in your rental because of a claim.

Some renters policies will provide a replacement cost for a lost or damaged item. Other policies may provide cash value, which takes into account depreciation of your item before the payout. What’s the difference? Say you purchased a new sofa 10 years ago, the cash value that you’d receive could potentially be well under $100. But if the same couch can be bought brand-new, that dollar amount would be the replacement cost amount.

Q:Question

Is renters insurance expensive?

A:Answer

Not really, which is one of the best reasons to recommend renters insurance. While several variables can affect the cost of your premium, overall, renters insurance is a cost-effective type of coverage. In fact, according to the Insurance Information Institute, the average yearly premium for renters insurance is just under $200.