Rental insurance, or renters insurance, helps protect those who rent or lease an apartment, house, or condo. It’s designed to both protect a renter’s personal belongings and provide liability coverage in case of an accident or injury on or within the property.

Many places require renters to carry rental insurance in order to live there; however, if you do have a choice, it’s a good idea to get it anyway, especially because most landlords’ insurance policies don’t cover tenants’ personal belongings or liability. Read on to learn more.

WHAT IS RENTAL INSURANCE?
Rental insurance typically includes several types of coverage, including:

• Personal property coverage: This protects your personal belongings, such as furniture, electronics, clothing, appliances, and more, from covered perils or events like theft, vandalism, fire, and certain natural disasters or water damage.
• Liability coverage: This offers financial protection if you’re found legally responsible for an accident or injury to someone else or damage to their property while they are on your rental property.
• Additional living expenses (ALE) coverage: On rare occasions, your rental unit may become uninhabitable. ALE coverage can help pay for temporary living expenses such as a hotel stay, meals, and other costs, until you’re able to move back into your rental.

If a covered peril occurs, you will file a claim with your renters insurance company to receive compensation for that loss, up to your policy’s limits (minus any deductible).

BENEFITS OF RENTAL INSURANCE
Rental insurance offers several benefits to tenants, so even if you aren’t required by your rental to have a policy, you may want to consider it. Some advantages include:

• Protection for personal belongings: If your belongings are damaged or stolen in a covered event, rental insurance can help cover the cost of replacing them. This can save you thousands of dollars.
• Liability coverage: If someone is accidentally injured or you damage someone else’s property, you’d be financially responsible for any medical bills, legal fees, or other costs. Rental insurance can help protect you from financial loss if you are found liable.
• Affordable: Rental insurance is typically pretty affordable, and the coverage it provides can far outweigh the cost should you ever need to use it.
• Peace of mind: Knowing you have insurance coverage and are financially protected in case of unexpected events can help provide significant peace of mind.

Keep in mind it’s important to review the specifics of your rental insurance policy to understand coverage limits, exclusions, and deductibles. You can also contact your insurance agent or the rental insurance company if you have questions.

RISKS OF NOT HAVING RENTAL INSURANCE
While rental insurance isn’t legally required (though again, certain apartments and landlords may require it), it’s still a good idea to get:

Not having rental insurance can expose you to several risks and financial hardships. For example, without this, you are responsible for replacing your personal belongings if they are stolen or damaged. This can result in significant financial loss, especially for expensive items like electronics and furniture.

Additionally, if someone is injured or their property is damaged on/in your rental property, you could be held financially and legally responsible for those damages and costs. This includes any legal expenses if you’re sued for an accident that occurs within your unit. These costs can add up quickly and have a significant financial impact.

In the event of a catastrophic loss, like a fire that destroys your unit, not having rental insurance can make it difficult to rebuild your life since you’ll be responsible for covering the cost of replacing your belongings and finding temporary housing.

FACTORS TO CONSIDER WHEN DECIDING ON RENTAL INSURANCE
When deciding on rental insurance, there are several factors to consider to ensure you get the right coverage for your needs:

• Coverage options: Look at what types of coverage are included in the policy, such as personal property coverage, liability coverage, and additional living expenses coverage. Make sure the policy provides adequate coverage for your belongings.
• Policy exclusions: Make sure to review the policy exclusions to understand what is not covered by the insurance policy. Common exclusions include floods, earthquakes, and certain types of personal property. Consider purchasing additional coverage if needed.
• Coverage limits: Check the coverage limits of the policy to ensure they are sufficient to cover the value of your belongings and potential liabilities. In some cases, some rental properties require you to have a certain coverage limit, so make sure the policy meets that limit. You may need to increase the coverage limits or purchase additional coverage if the limits are too low.
• Deductibles: Determine the amount you’d be responsible for paying out-of-pocket before insurance coverage kicks in (this is your deductible). Choose a deductible amount that fits into your budget.
• Cost of the policy: Compare the cost of rental insurance policies from different insurance providers to find one that fits your financial situation. Work with your insurance agent to learn about any discounts or savings opportunities that may also be available.
• Landlord requirements: Check your lease agreement and landlord’s insurance policy to see if there are other requirements or recommendations for insurance.

HOW TO GET THE RIGHT RENTAL INSURANCE
The best way to ensure you’re getting the right rental insurance for you is by working with an insurance agent. They can quote and review policies and coverage with you, finding the right one for your situation and budget. Rental insurance is priced depending on your location, coverage limits, number of units in your building, and other factors, so it’s important to research insurance providers that offer rental insurance policies and compare quotes from multiple companies.

Additionally, as you’re researching different policies, pay attention to policy limits, understand the different types of coverage offered, and read the policy exclusions carefully.