Renters insurance, sometimes called tenant insurance, pays to replace or repair a tenant’s personal property if it’s stolen, damaged, or destroyed in a home or apartment rented by that tenant. The landlord’s insurance policy covers the house or apartment building structure but not the tenant’s personal property, such as furniture, clothing, and electronics. Some rental property managers may require you to have renters insurance as a condition of your lease.
Renters insurance policies typically include three types of coverages: personal property coverage, loss of use, and personal liability.
Personal property coverage pays to repair or replace your personal property, up to your policy’s dollar limit. In addition to a total dollar limit, policies may limit payments for certain kinds of property. Common limits are $100 for cash, $2,500 for personal property used for business, $500 for valuable papers, and $500 for jewelry, watches, and furs. Renters insurance also covers your luggage and other personal items when you travel. This coverage is usually limited to 10 percent of the amount of your policy or $1,000, whichever is greater.
Loss of use pays for additional living expenses, such as food and housing, if you must move from your home or apartment because of a covered loss. Loss of use coverage is generally limited to 20 percent of a policy’s personal property coverage. For example, if you have $25,000 in personal property coverage, your policy would have $5,000 for temporary additional living expenses.
Personal liability protects you against a claim or lawsuit if someone is injured in your home. A renters policy typically automatically provides $25,000 in liability coverage and pays your legal costs. Extra liability coverage is available for additional premium.