As a renter, you are not a homeowner, but you still have exposure to risks and losses, many of which are the same as homeowner’s risks. So there is actually a special kind of insurance called tenant’s or renter’s insurance. As a tenant, you want to cover your risks of loss and liability because the landlord’s insurance is not insurance that will cover you as a tenant.
First thing you need to know is that your personal property is not covered by your landlord’s insurance policy. As a tenant, you are responsible for obtaining insurance for your own property if you want to be covered in the event of fire, theft or other loss.
These “other loss” categories include a range of other risks or “perils” as they like to say in the insurance biz. A significant benefit to renter’s insurance is that it covers personal property whether that property is damaged or stolen in your own rental unit or somewhere else.
In most policies, renter’s insurance provides coverage for damage caused by windstorms, hail, explosions, vandalism, riot, civil disturbance or even volcano. Protection against damage caused by earthquake and flood need to be purchased separately as an “endorsement” to your tenant’s policy.
Like other types of homeowner’s insurance, a renter’s policy also limits coverage for some categories of personal property, such as jewelry, furs, silverware, and other categories of valuables. You should definitely check with your insurance agent to find out the exact list of categories that may have limited coverage under your renter’s insurance policy. If you have a significant amount of property in any of the limited categories, you can increase your coverage for that specific category of property on your renter’s policy, or purchase insurance for those items separately. If you choose to insure those items separately, you will generally receive a broader coverage and lower deductibles on those items.
In addition to coverage for your personal property, a tenant’s policy also proveds liability coverage. If you’re wondering why you need liability, the answer is fairly straight-forward: your landlord’s insurance policy only covers landlord liability, not your liability as a tenant.
Your renter’s insurance will cover tenant’s liability up to a set limit depending on your policy, as long as you did not intentionally cause the loss. Liability coverage isn’t limited to damage to others or their property that occurs in your rental unit; it also generally covers legal defense expenses and your liability outside of the home.
Tenants may qualify for a multiple-policy discount if you purchase your insurance from the same company that you get your car insurance from. Other possible savings may be available if your rental is equipped with deadbolts, smoke alarms and fire extinguishers.