Who is Responsible for Renters Insurance?

When you’re shopping for an apartment, you’ll likely come across renters insurance requirements. What does this mean?

Essentially, landlords will require you to purchase renters insurance before you move in. This insurance is designed to protect your belongings and other tenants in case you cause property damage or bodily injury to someone else. As such, you are responsible for carrying the required amount of renters insurance for the duration of your stay on the rented property.

What Does Renters Insurance Cover?
There are three main coverages under renters insurance:

General Liability: General liability insurance covers property damage and bodily injury you may cause someone else. It provides compensation for medical bills, property repairs and possible legal fees, should the victim decide to sue. This insurance can expand to cover damage and injuries caused by pets, as well.
Personal Possessions: Personal possessions coverage provides compensation if your personal belongings are lost or damaged due to fire, smoke, lightning, theft, vandalism and more.
Additional Living Expenses: If a disaster makes the rented property unlivable, additional living expenses (ALE) helps with the cost of temporarily staying elsewhere while repairs are being made.

The required limits of these coverages vary depending on your location and your landlord. In general, landlords will require you to carry at least $100,000 in personal liability insurance and $30,000 in personal possessions coverage. Make sure to assess your insurance needs before signing a policy, however. If you face higher liability risks or have many valuable belongings, you may need more coverage. On average, people have about $35,000 worth in personal belongings. Certain items such as laptops, computers, televisions, gaming systems and furniture will need more insurance to cover the possible cost of replacement.

You can also add floater policies in order to cover expensive items that may have limited coverage under basic renters insurance. Items such as electronics, jewelry, art and furs may need floater policies.

Other exclusions to renters insurance include damage due to floods and earthquakes. Depending on where you live, you may want to purchase extra policies to cover damage from these dangers.

Does Renters Insurance Cover the Apartment?
Unlike homeowners insurance, renters insurance does not cover the physical living property. Personal possessions coverage refers only to the renter’s belongings within the apartment rather than the unit itself. For example, say a hail storm damages the roof of your apartment and causes a leak in your apartment. This does not fall to the responsibility of your renters insurance. The landlord should have their own commercial property insurance to cover damages to the unit, apartment complex and amenities.

This doesn’t mean you’re off the hook for any damage done to the apartment, however. If you cause damage to the apartment or any of its amenities, your landlord can hold you responsible for repairs or replacements. For example, if you accidentally start a fire in your kitchen and burn the cabinets, your landlord may both file a claim with their insurance company and seek compensation from you for the damage. Keep in mind that damage you (or a pet) causes to the unit may exempt you from receiving your deposit back at the end of your lease.

How Much is Renters Insurance?
Luckily, renters insurance is relatively inexpensive. The average renter pays around $15 a month for a basic renters insurance policy. This number varies depending on your:

Location
Credit score
Coverage limits
Deductible
Claims history

Choose your deductible carefully. You can typically choose between a $500 and $1,000 deductible for your personal possessions coverage. A higher deductible may save you on monthly premiums, but you will also owe more when it comes time to file a claim.

Who is Responsible for Renters Insurance?

No Comments