From Jennifer Lai,
Your Guide to Apartment Living / Rental.
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What is renters insurance?

For those who rent, renters insurance covers damage to or loss of your personal property. Whether you rent from a house owner, a property manager, or a university (as a student living in a dorm), consider purchasing renters insurance.

Why do I need renters insurance?

Landlords insure the physical apartment building against damage from occurrences such as fire, hail, and vandalism. But their insurance policy does not cover your belongings, so don't expect the landlord to owe you payment should anything happen. Another reason to get renters insurance is to protect yourself against any accidents caused by other tenants.

Renters insurance can also protect against liability lawsuits or medical bills of guests injured in your apartment.

Some landlords require you to purchase renters insurance. If so, this would be stipulated in your lease or lease riders.

What kinds of loss of or damage to property does renters insurance cover?

There are many types of loss that insurance will cover, plus additional options. It depends on the institution. In addition to cost, this can help you choose from where you want to get rental insurance. For example, some of the better known places do not cover damage from floods, unless you pay an extra charge. If you live in an area prone to floods, it makes better sense to search for options where flood protection is included.

How does renters insurance work when you need to replace your property?

There are two kinds of payouts: actual cash value and replacement cost coverage.

Actual Cash Value. This type of coverage pays an amount equal to the current cost to replace your items minus the depreciated value.

Replacement Cost Coverage. This type of coverage pays you the amount it would cost to replace your lost or damaged property. You only get the money if you replace the items. There is also usually a limit on how much money you receive, and the premiums tend to be higher.

Deductibles. This is the amount you pay for the lost or damaged goods, before the insurance company would begin paying. Typically, the higher the deductible, the cheaper your policy will cost.

What other protection can I get from renters insurance?

Liability protection. Some renters insurance protects you against a lawsuit if someone or their property is damaged on your apartment's premises.

Medical payments to guests. Some policies cover the medical bills up to a limit of anyone, except you or anyone else who lives in the apartment, who is injured in your apartment.

Increase in Living Expenses. If your living expenses increase, because you must live elsewhere due to a loss, some policies cover, up to a limit, that increase.

Lost property while traveling. Some renters insurance policies cover your property even when you are traveling, should the airline lose your luggage.

Premium policy add-ons. If you are willing to pay a higher premium, you can buy additional protection. The add-ons differ from company to company, so be sure to ask for details. Typical add-ons include:

• property damage due to floods or earthquakes
• damaged wedding or engagement presents

I have a roommate? Do we each get our own policy?

It depends on the policy. Some insurance companies offer one policy that covers multiple people. Others require each person to get a separate policy.

Are there any discounts available?

Some insurance providers offer discounts to people who already have their auto insurance. Check if your auto insurance provider has such discounts and you may be able to save some money by purchasing their renters insurance.

How often do I pay?

You can make monthly payments or pay all at once.

Where do I obtain a renters insurance policy?

Research policies offered by different insurance companies.

Check to see if your bank offers renters insurance.

Look into your current auto insurance provider. The company might offer discounts to policyholders for purchasing their renters insurance policy.