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What Is Renter’s Insurance And Do You Need It?

What Is Renter’s Insurance And Do You Need It?

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If you are moving into your first apartment, there are a lot of important details you need to become familiar with. There are leasing agreements, contracts, credit scores, and background checks. Another aspect of apartment renting is renter’s insurance. But what is it exactly and how do you know if you need it?  


We’ve put together this quick guide to understanding the basics of renter’s insurance so you can make a confident and informed decision before signing on the dotted line.  


What Is Renter’s Insurance? 

Typically, when you rent space from someone, they have insurance on the property. But this insurance usually only covers the building, not any of the belongings inside of it. This basic insurance may not cover any accidents or injuries that happen within the home. This is where the renter’s insurance comes in.  


Renter’s insurance protects your personal property from unexpected issues like theft, fire damage, or a broken sewer pipe. When you have renter’s insurance, if something beyond your control happens in your apartment, the insurance will cover the cost of any lost or damaged possessions. If someone gets hurt in the apartment, your renter’s insurance will protect you from being liable.  


How Does It Work?  

There are usually two types of renter’s insurance. According to the Nationwide website: 

  • “Actual Cash Value coverage will reimburse you for the value of the items at the time of the damage or loss.  

  • Replacement Cost coverage covers the cost it takes to replace the items lost or damaged.” 


What’s Covered? 

Not all rental insurance policies are created the same, so it's important to understand exactly what is and is not covered under your policy. Most basic policies protect from: 

  • Fire 

  • Lightning 

  • Windstorm 

  • Hail 

  • A frozen plumbing system 

  • Theft 

  • Vandalism 

  • Impact by a vehicle 


There are a few other things that renters insurance covers that many people don't know about. If something were to happen to your apartment that caused you to have to find other living arrangements, your renter's insurance policy would help cover the cost of hotels, food, and other expenses associated with being displaced. 


Renter's insurance doesn't just cover things that are inside your home. If they're yours, and they're stolen, the renter's insurance will cover it. For example, if you have a comprehensive rental insurance policy and your backpack is still in when you're out of town, it'll be covered.  


What’s Not Covered: 


  • Valuables. Your policy may cover your basic home essentials, but family heirlooms, jewelry, high-ticket items, and valuables may need extra coverage. 

  • Home business essentials. Many Los Angeles residents are entrepreneurs and run small businesses out of their apartments. But the equipment and supplies and space designated for your small business may not be covered under your renter's insurance policy. For example, if your computer is stolen from your apartment it may be considered business property instead of personal property and not be covered under your renter's insurance policy. 

  • Motorized vehicles. Even though your car is parked on the property, it won't be covered by your renter's insurance. The personal belongings inside your car could be covered, but the vehicle itself is not. 

  • Natural Disasters. If your apartment is impacted by an earthquake, flood, sinkhole, or insect infestation, it probably won't be covered by your renter's insurance.  

  • Other Peoples’ Things. If you're living with a roommate and their valuables are stolen or damaged, they won't be covered by your policy even though they live with you 



Do You Need It?  

Renter's insurance is not required by law in California, but some leasing agents and landlords may require it for you to rent their property. The average cost for renters insurance in the US is around $180 a year, which breaks down to roughly $15 a month. For many, this added expense is worth the peace of mind that comes with knowing that if something unexpected were to happen, they would be covered.  


Bottom Line 

The worst time to look into renters insurance is when you're faced with an emergency. This is something you should look into before you start your apartment search. Once you find the right policy for you, take a virtual tour of NMS Missouri and take the first step toward living the West LA lifestyle.  

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