A standard renters insurance policy typically covers your personal belongings should they be damaged, destroyed or stolen. Renters insurance also covers liability in case someone is injured or someone else’s property is damaged, as well as any medical payments. Lastly, it can pay for additional living expenses should your place become uninhabitable.
So, how does renters insurance work? Let’s talk about what renters insurance is, the specifics of what it covers, and how much it might cost to hop on a policy.
Renters Insurance Basics
Renters insurance offers financial protection to tenants in case anything were to happen to their personal property and in the instance of legal liability.
If you’re a renter, you may think that your landlord will foot the bill should there be a break-in and some of your belongings get stolen, or if there’s a fire in your apartment building. While a landlord might have insurance in place to cover the building, their insurance won’t cover your items should they get damaged or stolen, or pay for additional living expenses should you need to temporarily move out while your unit undergoes repairs. Rather, these are the types of things that renters insurance covers.
While renters insurance offers similar coverage to homeowners insurance (aside from covering the building, which is the landlord’s responsibility), it is generally much less costly. Some landlords require renters insurance, but not all do.
💡 Quick Tip: Online renters insurance can cover your belongings not just at home but also in your car and on vacation.
What Is Covered by Renters Insurance?
In a nutshell, standard renters insurance covers four main areas:
• Personal possessions
• Liability
• Living expenses
• Medical payments
Let’s take a closer look at each area.
Personal Property Damage
Renters insurance will cover your personal belongings if they are lost or stolen from common incidences such as:
• Theft
• Fire
• Smoke
• Lightning
• Vandalism
• Explosions
• Water-related damage from utilities on the property
• Windstorms
• Any other disasters, risks or other events listed in your policy
As mentioned before, unlike homeowners insurance, a standard renters policy typically doesn’t provide financial protection and pay for repairs to the actual structure of the building in which you live.
Renters insurance also will not cover damage to personal property during an earthquake or flood, but you can get add-on insurance or a separate policy altogether so that both are covered. If you get comprehensive renters insurance, damage and destruction from hurricanes and storms can be covered, but this type of policy usually costs more.
Liability
A standard renters insurance policy will also protect you financially should you, a family member or, in some cases, a pet cause injury or damage to other people or to their personal property. It could cover the costs of lawsuits, up to the limit of the policy, and the expense of repairing or replacing another person’s property or belongings if you are at fault.
However, it won’t replace your personal belongings or property should you, a member of your family, or your pet cause damage to your own property.
For example, let’s say you’re walking your dog, and your dog has a run-in with another canine. Chaos ensues, and your dog damages a neighbor’s fence. In that case, your renters’ insurance policy will pay to replace the fence. On the other hand, if your dog is chasing a squirrel while on her leash and tears up your mailbox, you’re out of luck. Your renters insurance policy won’t cover that.
Living Expenses
Should you become unable to live in your home and need to temporarily move out due to a covered natural disaster like a tornado, or another incident or event like damage from a fire or a storm, a standard renters insurance policy can cover the cost of additional living expenses.
This can include costs such as meals out and accommodations. It could also pay for pet boarding, the cost of doing laundry outside of your home, and storage costs. What’s covered would be based on your normal living expenses and lifestyle.
Medical Payments
Medical payments are covered under the liability portion of your insurance policy. If someone were injured in your home — say a delivery person slips and falls on your premises or your dog bites a neighbor in your apartment building — your policy can cover medical bills or funeral expenses up to a certain amount. On the other hand, if you, your family member, or your pet were injured, renters insurance would not cover that.
Unlike the liability portion of a renters insurance policy, medical payments coverage will pay for medical bills no matter who is at fault.
Recommended: Choosing a Renters Insurance Deductible
How to File a Claim
Need to file a renters insurance claim? Here’s the general process you can expect to follow:
1. Document the damage or loss: To file a renters insurance claim, you’ll first want to gather as many details about the incident as possible, including what exactly happened, when and where it happened, who was involved and what was damaged or taken. Take detailed notes and photos.
2. Tell your landlord: Next, notify your landlord. That way, if there’s any structural damage to where you live, they can handle it on their end.
3. File a police report if necessary: If there was damage to your property or loss of items due to burglary, theft, vandalism or an incident with ill intent, you’ll want to file a police report.
4. Reach out to your insurance company: You’ll then want to reach out to your insurance company and file a claim. Generally this must be done within a certain timeframe, such as two or three days. You’ll typically need to provide your policy number as well as all of the details and supporting evidence you’ve gathered. This will help the insurer to gauge what will and won’t be covered. Often, someone will come by to assess the damage.
5. Make any updates if needed: If there were any unexpected or additional costs along the way, such as staying at a short-term rental home while your place gets repaired, meals out because you couldn’t use your kitchen or personal possessions you later realized were damaged or missing, then you can update your claim along the way.
💡 Quick Tip: It’s important to create an inventory of your personal possessions in case you ever need to file a renters insurance claim. One easy way to do that is to walk through your home and photograph all your belongings — especially anything of value.
How Much Is Renters Insurance?
Average annual cost of renters insurance: $15-$30 a month
According to the most recent data from National Association of Insurance Commissioners (NAIC), the average cost of a renters insurance policy is $15 to $30 a month. However, the cost can vary depending on a handful of factors, including:
• Where you live
• Type and amount of coverage
• The size and construction of your building
• Your deductible
• Security and prevention measures in place
• Any discounts
• Your claims history
Recommended: Most Affordable Renters Insurance for Apartments
The Takeaway
While not required by your landlord, renters insurance can help cover your personal belongings, additional living expenses and liability should there be an incident, disaster, or theft where you live. To figure out how much coverage you need, it’s a good idea to take inventory of your items.
Looking to protect your belongings? SoFi has partnered with Lemonade to offer renters insurance. Policies are easy to understand and apply for, with instant quotes available. Prices start at just $5 per month.
Photo credit: iStock/humanmade
Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPT1123001