There are many perks to renting an apartment rather than owning a home: no yard work, no property taxes, and someone else to handle (and pay for!) maintenance work. You won’t need to worry about insuring the property, since the apartment complex already has a policy in place.
You'll still need to have a plan for if an accident or natural disaster causes damage to your personal possessions. For example, a water leak could not only damage your apartment flooring (which your landlord is responsible for), but ruin your furniture or stereo system. You'd be on the hook for the cost of replacing those personal items.
That’s where a renter’s insurance policy comes to the rescue!
What is renter’s insurance?
Renter’s insurance is a protection policy for people who do not own the property they live in but do have personal belongings within the space they rent. In the case of damage to your items, the insurance company will pay towards your loss, up to agreed-upon amounts. You pay a monthly premium to keep the policy enacted, and are often responsible for a deductible amount that must be paid before the insurance policy reimburses you.
What does it cover?
While policies details differ from carrier to carrier, a typical renter’s insurance will cover:
- Property damage—if your belongings are damaged or destroyed, your policy will replace them (up to a certain value amount).
- Liability insurance—If property accidentally gets damaged or a guest is injured while visiting your apartment, liability insurance can help cover the costs.
- Displacement – If you have to leave your apartment in the aftermath of a disaster, this coverage can help you pay for hotel fees.
- Theft—Even those living in an apartment with security precautions such as alarm systems, having coverage in case items are stolen can give you additional peace of mind.
Typically these policies will cover damage caused by vandalism, theft, fire, smoke, and water (though flood or earthquake protection often require an additional policy).
Is renter’s insurance right for me?
Some level of renter’s insurance may be required by your landlord and will be a part of your lease. Either way, it can be a wise investment—especially if you’ve invested money into your own furniture, or if you have electronic equipment, jewelry, nice clothing, or other items of value that would be a financial blow to lose.
Renter’s insurance tends to be pretty affordable (less expensive than home insurance), so its benefits often outweigh its monthly cost.