Renter's Insurance: Summer House Edition

Renters insurance is a type of insurance that protects those renting a home or apartment, covering personal belongings in the event of a break-in or theft. While a landlord's insurance covers the building and units they own within it, renter's insurance is designed to protect a tenant's goods. It also typically helps cover the cost if someone is injured while visiting the tenant, and often helps pay for temporary accommodation if the rental becomes uninhabitable.

Most renter's insurance policies provide two basic types of coverage: personal property and liability. Personal property coverage pays to repair or replace personal belongings if they are damaged, destroyed or stolen. Liability insurance provides coverage against a claim or lawsuit resulting from bodily injury to others or property damage caused by an accident while on the policyholder’s property.

What does renter's insurance cover?

Renters insurance is an important way to protect your belongings and your space in the event of a covered accident. It covers your personal property, personal liability, medical payments, and additional living expenses or loss of use. Here's a detailed breakdown of what renters insurance covers:

Personal Property Coverage

This is the most well-known aspect of renters insurance. It covers your personal belongings, such as furniture, clothing, electronics, appliances, and other items, from theft or damage. This includes items stolen from your car or while travelling. However, certain high-value items like jewelry, artwork, and collectibles may be excluded or have limited coverage. You can purchase additional coverage for these items if needed.

Personal Liability Coverage

Renters insurance provides personal liability coverage if you are legally responsible for someone else's injuries or damages that occur in your home or elsewhere. This includes injuries caused by household pets or accidental damage to a neighbour's property. It also covers legal costs if you are taken to court.

Medical Payments Coverage

Renters insurance covers medical expenses for guests who are injured in your home. This ensures that your guests are taken care of and protects you from potential liability.

Additional Living Expenses Coverage

If your rented property becomes uninhabitable due to a covered loss, renters insurance provides reimbursement for additional living expenses such as temporary lodging, food, and other costs incurred while you are living elsewhere. This coverage ensures that you are not burdened with additional expenses during a difficult time.

Natural Disasters and Other Perils

Renters insurance typically covers certain natural disasters such as fire, windstorms, lightning, explosions, and water damage from internal sources like plumbing issues. However, it usually excludes coverage for earthquakes and floods, and damage to the exterior of the building.

Optional Coverages

Renters insurance also offers optional coverages for additional protection. These can include coverage for high-value items, water backup damage, protection for personal belongings in a motor vehicle or watercraft, and coverage for losses caused by earthquakes or volcanoes.

It's important to carefully review the specific details of your renters insurance policy, as coverage can vary. Understanding what is covered and what is excluded will help you make informed decisions about protecting your belongings and your space.

How much does renter's insurance cost?

The cost of renters insurance varies depending on a variety of factors, including location, the type of structure being rented, and the value of personal property. On average, renters insurance costs around $12 to $20 per month, but rates can be as low as $3 per month or as high as $253 per year, depending on the state and specific circumstances.

In general, renters insurance is relatively inexpensive and the rates are usually lower than those for home insurance. The crime rate in the area can significantly impact the cost of renters insurance, as it is often used to determine the likelihood of filing theft claims. The kind of structure being rented may also influence the cost, with single-family homes typically costing more to insure than apartments due to a higher risk of theft.

Additionally, the value of personal property being insured can affect the cost of renters insurance. Renters with more valuable items may need to purchase additional coverage, such as a "rider" or "floater", to ensure their belongings are adequately protected. The deductible, or the amount the renter pays out-of-pocket before the insurance company covers the rest, can also impact the cost, with higher deductibles resulting in lower monthly rates.

It's important to note that renters insurance rates can vary across different insurance providers, so it's recommended to shop around and compare quotes from multiple companies to find the best deal.

Do I need renter's insurance?

Renters insurance is not a legal requirement, but it is still a good idea to have. Your landlord's insurance will cover the building, but not your belongings. Renters insurance can protect your possessions from theft or damage, and it can also cover you in the event of a lawsuit. For example, if you accidentally damage a neighbouring apartment, your landlord's insurance won't cover it, but your renter's insurance will.

Renters insurance can also pay for housing after a disaster, such as a fire or extensive water damage. It can also cover the cost of meals or other expenses associated with living away from home while repairs are being made.

Additionally, renters insurance can cover your belongings away from home. Many policies will cover your possessions if they are stolen outside of your home, or if they are in a storage unit.

The cost of renters insurance is relatively low, with an average of $148 per year, or $12 per month. This can be even lower if you bundle your renters insurance with your auto insurance, thanks to multipolicy discounts.

What is the difference between landlord insurance and renter's insurance?

Landlord insurance and renters insurance are two distinct types of insurance policies that offer financial protection for landlords and tenants, respectively, in the event of damage, loss, or other specified situations. Here is a detailed comparison between the two:

Landlord insurance, also known as dwelling fire coverage, is designed to protect landlords, or property owners, from financial losses related to their rental properties. It typically includes three basic levels of protection:

• Liability Coverage: This covers legal and medical expenses if a tenant or their guest is injured on the property. It also protects landlords from being sued due to incidents on the property.
• Property Coverage: This covers any damage to the property itself, such as the building, condo, or house, as well as any landlord-owned property within, like furniture or appliances.
• Loss of Income Coverage: This protects landlords from financial losses if the rental property becomes uninhabitable, resulting in a loss of rental income.

Renters insurance, on the other hand, is an insurance policy taken out by tenants to protect their personal interests. It typically includes three primary coverages:

• Personal Property Coverage: This covers the tenant's personal belongings, such as electronics, furniture, and other valuables, in the event of loss or damage due to covered perils like fire, theft, or vandalism.
• Personal Liability Protection: This covers medical expenses and legal costs if the tenant or someone else is injured on the rented property due to the tenant's negligence. It also protects tenants from being sued for unintentional injuries or property damage.
• Additional Living Expenses: This coverage helps tenants pay for temporary accommodation if their rental property becomes uninhabitable due to a covered loss, such as fire or mould.

Key Differences:

The main difference between landlord insurance and renters insurance lies in who they protect and what they cover:

• Protected Party: Landlord insurance safeguards landlords or property owners, while renters insurance protects tenants and their personal belongings.
• Property Coverage: Landlord insurance covers the physical structure of the rental property and any landlord-owned items within it. In contrast, renters insurance covers the tenant's personal property inside the rental unit.
• Liability Coverage: Both policies include liability coverage, but the specifics vary. Landlord insurance protects landlords from liability claims, while renters insurance covers tenants' medical and legal expenses if they are at fault for injuries or damage on the property.
• Loss of Use Coverage: Landlord insurance provides loss of income coverage if the property becomes uninhabitable, while renters insurance assists tenants with temporary living expenses during such situations.
• Cost: Renters insurance tends to be less expensive than landlord insurance since it does not cover the entire building or structure.

In summary, landlord insurance safeguards landlords from financial losses related to their rental properties, while renters insurance protects tenants and their personal belongings. Both types of insurance are important to maintain the long-term viability of a rental property and ensure peace of mind for all parties involved.

How do I get renter's insurance?

Renters insurance is not required by law, but it is a good idea to have it. Your landlord's insurance will not cover your personal belongings, so a separate policy is necessary to protect your items from theft or damage. Renters insurance can also protect you from liability if a guest is injured in your home.

• Understand your landlord's insurance policy: Ask your landlord for a copy of their insurance policy to understand what is and isn't covered. Typically, a landlord's insurance covers the building's structure but not the value of individual tenants' belongings.
• Learn about different types of renters insurance policies: Know exactly what is covered and what isn't. The value of your belongings may impact the cost of your insurance policy.
• Compare insurance companies: Shop around and compare rates from different insurance companies. You may get a discount if you already have auto insurance with a particular company and choose to bundle your policies.
• Estimate the value of your personal property: Take an inventory of all your belongings and estimate their current value. This will help you determine how much insurance coverage you need.
• Get a renters insurance quote: Many companies offer free renters insurance quotes online, over the phone, or in person. An insurance agent can help you determine the best coverage and plan for your financial situation. Remember that a higher deductible usually means a lower insurance premium, and vice versa.

By following these steps, you can find a renters insurance policy that suits your needs and provides adequate protection for your belongings and liability.

Frequently asked questions