What Does Renter’s Insurance Cover?

Everyone has things.  Computers, bikes, clothing, appliances, gadgets, furniture, art… you name it and people own it.  So, what happens when you are living in an apartment and a disaster happens and you lose a bunch of your things?  What happens then?    

And when we are saying “Disaster”, we aren’t meaning your local volcano decided to erupt and wash your entire apartment building away in a fiery river of lava.  We are meaning run of the mill disasters, like a fire in the building, someone coming over to your apartment and stealing something, or someone being injured on your property. 

Don’t think you can be liable for some of those things? Think again. 

Think that your apartment complex must have its own insurance coverage which would take care of that?  Think again.

Your apartment complex is going to have insurance coverage for THEIR property, not yours.  Your property is your business.  The same goes for the security of your apartment and what happens inside both when you are and are not present. 

What Is Renter’s Insurance And Why Do I Need It?

Renter’s Insurance is what you need to protect your possessions, yourself, and your liability to others should something unfortunate happen.  It is going to cover your Personal Property, Personal Liability, and Living Expenses should something like smoke or fire damage force you to move somewhere else for a period of time. 

What Is Not Covered By Renter’s Insurance?

While renter’s insurance will cover almost anything that you list in the policy as part of your personal possessions, the times they will not pay out is if there is a natural disaster such as a flood or an earthquake.  (Strangely enough, volcanoes ARE almost always on the list of perils that are acceptable in most policies.)

As long as the damage was done by things like these, your property and person will be covered: 

  • Theft or Vandalism
  • Wind, Hail, Lightning, and Fire
  • Smoke
  • Water Damage From A Busted Pipe
  • Mold
  • Snow

And last but not least…

  • Volcanos

How Much Is Renter’s Insurance?

People living in apartments typically don’t have unlimited pockets, and for too many apartment dwellers, paying for one more piece of insurance that they may never need can seem like an unnecessary expense.  

The problem is if something DOES happen, you could be in a world of hurt.  Say you had a kitchen fire that started on the stove and you have both smoke damage in the apartment, to most of your possessions, but also the unit above and beside you also had damage in it.   

You are going to get hit with a MAJOR bill to fix and replace everything.  In all the units that were affected. Literally, a situation like this is going to cost you tens of thousands of dollars to remedy.  And you thought you had enough expenses now, right? 

Renter’s Insurance is surprisingly cheap.  For most renters, it is going to cost them under $200 a year to cover everything they need to cover.  This means it is going to cost less than a dollar a day.  These few pennies a day could mean the difference in you having to declare bankruptcy and having any and all your savings wiped out instantly should something unfortunate happen. 

It is a small price to pay knowing that not only are all your things covered, but any liability that you may have yourself on the disaster to other people will be covered as well.    

How Much Renter’s Insurance Should I Have?

As with most insurance policies, you can usually modify how much of your personal property and personal liability you would like to cover.  What you add to your policy is then going to determine how much your premium is going to be each month. What you want to make sure to do is have coverage for those liabilities that would cost you the most should something happen. 

The first thing you will want to add to the policy is regarding Personal Property. A good rule of thumb is to add all the personal property to your policy that you would not want to write a check tomorrow to replace if you had to.  Even if you total up everything in your apartment and have only $4,000 worth of possessions, writing a check tomorrow to replace them all is not going to be fun.  Whereas for under $200 a year, you can probably get everything in your apartment completely covered. 

The other key factor that you will want to protect against is against personal liability.  Let’s say your dog bites someone while they are over at your apartment and they have medical bills.  Or someone slips while in your apartment and sues you. Even just having friends over and something happens, you could be liable for any injuries they get simply because they were in your apartment at the time.  

Most insurance agencies are going to recommend around $100,000 in personal liability coverage for your policy.  This is going to cover that large exposure you have to a calamity like this. And don’t think things like this don’t happen.  You don’t see every other commercial on TV being from an insurance company for no reason. Things happen every single day and having renter’s insurance can mean the difference between getting everything back and financial ruin. 

With renter’s insurance, the major areas that you have the potential for full financial ruin while you are staying in the apartment are covered. 

Does Renter’s Insurance Cover Tenant Damage?

Usually, if the damage wasn’t intentional, your renter’s insurance is going to cover the damage.  

Now any damage to the structure of the apartment building is more than likely going to be covered by the landlord’s own insurance, but their insurance company may require that you pay a part of the damages, especially if the damages were intentional or neglectful.  

And remember, the landlord’s insurance policy is going to cover THEM, not you.  If you want to be made whole again from whatever happened in your unit, then you are going to want to have a renter’s policy in place.  

What Does Renter’s Insurance Cover?

Theft.  Let’s say that someone breaks into your apartment and decides to steal your flat screen and laptop.  Your renter’s insurance is going to cover that. Same thing with jewelry, stereo equipment or anything else you want to put on the policy to protect.  The policy will protect against theft just like it will protect it from an actual physical calamity from happening. 

Fire.  Let’s say that it wasn’t even you that started the fire.  Your neighbor decided to cook something and then went out on their balcony to have a cigarette and in the meantime a nice range fire started that worked its way up the walls before it could be brought under control.  Now, your entire apartment is filled with smoke and all your things have smoke damage. This is exactly what your renter’s policy is for, to cover things like this.  

Water Damage.  Your noisy neighbor upstairs decided to run a bath, and then got a phone call from her mom that lasted an hour, but in the meantime, she left the water running the entire time in the tub and now you have water everywhere in your apartment and a ton of your things are ruined.  Renter’s insurance is not only going to cover this for you but also put you up someplace else to stay until the damage can be fixed. 

Injury.  If someone got injured in your apartment, either by accident or a fight or whatever, the personal liability portion of your renter’s insurance is going to cover those expenses for you. 

Can My Landlord Force Me To Have Renter’s Insurance?

Yes, they absolutely can.  

This is becoming more and more prevalent in our very litigious society.  Many landlords require new applicants to have renter’s insurance before they accept them into the apartment complex.  Now, while you aren’t forced by law to get renter’s insurance, there is nothing preventing a landlord from requesting you have a minimum amount of insurance coverage before you move in. 

This does a couple of things. 

First off, it adds one more layer of protection on top of the landlord’s own insurance policy.  Depending on how the damage was caused, the renter’s policy could cover a portion of the damages and repairs.  It also makes moving into the apartment a very intentional act. Showing you are willing to protect your own items gives assurance to the landlord that you are going to be respectful of their property as well.  And if worse comes to worst, you have coverage to fix the situation. 

The second thing it does prevents tenants from wrongly coming after the landlord for something that happened in the building.  So, let’s go back to the fire and smoke example.  If you lived above the unit which a fire started in, many tenants would wrongly believe that the landlord’s insurance policy is going to cover all your things if they got smoke damage and you had to move out for a few weeks.  

This is Not The Case!!  The landlord’s policy is going to cover THEIR structure and property, not yours.  

So many times, renters have wrongly assumed that the landlord’s insurance would cover for damages. I mean, it wasn’t your fault, the complex should cover it, right?  Well, this is not their responsibility, it is yours. This is why renter’s insurance exists. 

Even though landlords are not going to be held liable for the smoke damage that your neighbors below you caused, they still don’t want to spend the time, hassle, and money dealing with a lawsuit that is brought against them.  Requiring you to have your own renter’s insurance removes this unfortunate situation from arising. 

Is It Worth Getting Renter’s Insurance?

YES!  It absolutely is!!  

One more common misconception is about who should get renter’s insurance.  You would think that the less money and possessions you have the less you would need the insurance.  This is not the case. The less money you have available to you means the easier you are going to be completely wiped out and have bills and expenses for years to come should something happen while you are renting an apartment.  

It is crucial to get some form of renter’s insurance to make sure that not only are all your personal possessions covered, but your personal liability is covered as well.   

It behooves anyone living in an apartment to get renter’s insurance.  From the fact that you are going to be living around a ton of other people, people who’s actions you aren’t going to be able to control 100% of the time, and the fact that things happen in an imperfect world.  That’s just the world. The Mayhem Man exists on TV for a reason. Stuff happens.  

Renter’s insurance is not the most expensive thing in the world and is usually going to be tailored for how much coverage you want on your personal property, and how much personal liability you want to have covered.  Regardless of who’s fault a calamity or peril is, or whether it even happened in your own apartment unit, renter’s insurance is going to keep your liability and your property safe.

At Apartment School, we highly recommend that if you are renting or looking to rent an apartment that you purchase some form of rental insurance, even if your landlord doesn’t explicitly require it. 

It’s the smart thing to do.

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John Boettcher

Co-Founder of Apartment School and a previous renter turned owner of many multi-family properties across the United States, with many years of experience in all aspects of the apartment, real estate, and investing world.

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