What Do I Need to Know About Renters Insurance?

Q: I’m a renter. What are some things I should know about renters insurance?

Renters are made up of a wide variety of people, from college students living in their first off-campus apartments to retired couples downsizing to a rented condo. Valerie Muldez, an Allstate agency owner in Durango, Colorado and Albuquerque, New Mexico, says many renters aren’t clear on just what renters insurance is all about. Below, she recaps some of the most frequently asked questions that she regularly answers.

What Does Renters Insurance Usually Cover?

A renters insurance policy typically includes a few types of coverage, Muldez says:

  • Personal property protection, which helps protect your belongings in case of a covered loss
  • Liability protection, which can help protect you financially in case someone is injured in your home and files a lawsuit
  • Increased living expenses, which helps cover the reasonable costs of staying somewhere else after a covered loss renders your home uninhabitable
  • Guest medical protection, which can help pay medical expenses for someone injured at your home

Doesn’t My Landlord’s Insurance Policy Protect My Stuff?

“While your landlord may have an insurance policy that helps cover the actual building you’re living in, landlord insurance doesn’t extend to personal possessions,” Muldez says. And, while some landlord insurance may help protect against limited damages caused by tenants, you could still be held liable for damages in certain circumstances — for instance, if you caused a fire or plumbing accident, she notes. A renters insurance policy typically helps protect your belongings and provides liability protection.

I Don’t Own Much. Why Do I Need Renters Insurance?

You might not think your possessions are worth that much, but when you consider replacing all of the electronics, clothing, furniture and appliances you own, the costs can quickly add up. “Even a small fire or a burglary, for example, could end up costing you thousands of dollars if you have to replace your stuff,” Muldez says. Renters insurance can help protect your stuff against the unexpected.

Is My Computer Covered?

Your computer is one of your personal possessions, so if you have a renters insurance policy with personal property coverage, that protection would likely extend to your computer. But Muldez says there are a couple of things to take into account when you’re trying to figure out whether your computer is protected:

  1. Your policy’s limits, or the maximum amount of money your insurance company will pay after a covered loss. If your computer is worth more money than the limit on your policy, you may want to consider purchasing additional coverage.
  2. Whether your policy offers replacement cost coverage or actual cash value to help replace your computer. Replacement cost coverage may help pay enough for you to purchase a new computer of the same kind. Actual cash value may help reimburse you for the amount of money you might reasonably expect to receive if you sold the item at its current age and condition.

What Is Personal Liability Insurance?

Liability coverage may help protect you if, for example, you are found responsible for a visitor’s medical expenses after they are injured at your home. Liability coverage typically comes with a renters insurance policy, Muldez notes, but be sure to check your specific coverage to learn what protections it may offer.

A local agent can help answer your questions about renters insurance so that you can make informed choices when purchasing a policy and selecting coverage limits that are right for you.

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