The person or company that owns the living space you rent generally buys insurance coverage to protect their interest, such as the building, loss of rents, liability, etc. Their insurance policy does not provide liability protection or cover your personal property against theft, fire, or damage.
Who should consider renter insurance
According to the National Association of Insurance Commissioners, the average cost in our state is about $120 – $216 per year, or roughly $10 – $18 per month. While some landlords require it, every renter can benefit from having a policy. It protects your belongings and provides liability coverage if someone gets hurt in your home or you accidentally damage someone else’s property.
Certain situations make renter insurance especially important:
- If you own valuable items like jewelry, computers, or high-end electronics, coverage can help avoid costly replacements.
- Pet owners should consider it because liability coverage can help if a pet injures someone or damages property.
- College students living in dorms or off-campus housing need protection for their belongings and personal liability. Parents should also check if their home insurance policy covers their kids’ property while they’re away at school.
Compare coverage and prices from different insurers. Check your rental agreement for any requirements. If you already have auto insurance, ask about discounts for bundling policies.
What renter insurance usually covers
Renter insurance normally combines coverage for:
Personal liability: Protects you from claims other people make against you if you're found legally responsible for injuring someone or damaging their property.
Premises medical coverage: Pays the medical costs of others accidentally injured at the place you rent.
Additional living expense: Pays for your living costs if you can't live in the place you rent and have to stay somewhere else temporarily. Please note that additional living expense is granted only if you have coverage for your loss. For example, if you don't have a flood policy and have to evacuate your apartment because a nearby river overflowed its banks, you would have to pay out of pocket to live somewhere else temporarily or make other arrangements.
Personal property (contents) coverage: Renter insurance usually only covers your property's actual cash value at the time it was damaged, destroyed, or stolen. For some personal property, like gold or jewelry, your policy will cover a specific amount and may pay you less than it's actually worth. You can ask your agent for a "scheduled personal property endorsement" for specific items that may be hard to value or worth more than your policy limits, such as:
- Jewelry
- Furs
- Cameras
- Musical instruments
- Collectibles
- Silverware
- Guns
- Art
- Some types of sporting goods
Never assume you have coverage. Read your policy documents and look for any specific exclusions, such as water damage exclusions. Ask your agent if you're unsure about coverage or if your policy's limits are enough. We're also here to answer questions about your policy and to help you understand what kind of coverage you have.
What renter insurance doesn't cover
Renter insurance typically doesn't provide coverage for:
Structural damage: The building your living space is in, whether it's a home or a multi-unit building, is your landlord's or property management company's responsibility. Their insurance policy covers the structure but provides no coverage for your belongings. If you've made improvements, such as built-in bookshelves or room dividers, ask your agent if they're covered under a renter policy.
Earthquakes, floods, landslides, and sinkholes: Damage from earthquakes, floods, landslides, and sinkholes is typically excluded on standard home and renter policies. Ask your agent about "difference in conditions coverage" for these situations, and visit the National Flood Insurance Program to learn about flood coverage if it's not offered by your insurer.
Even if the place you're renting is not in a flood plain, you might consider a flood policy. According to the Texas Department of Insurance, nearly 40% of flood insurance claims occur outside high-risk flood areas. Damaged drainage systems, broken water mains, and similar hazards can cause flooding that damages your belongings. Please note, there's usually a 30-day waiting period before policies from the National Flood Insurance Program take effect.
Home businesses: If you run a small business out of the property you rent, the items you use to operate your business may not be covered by your renter policy or may have specific limits. For example, if tools or a business laptop you use for work are stolen from your apartment, you may not get as much as you expect for your claim because they're considered business property. You may want to consider additional coverage for your business, such as:
- Increased business property limits
- Business merchandise coverage
- Incidental business liability
Vehicles: Even if your car is parked where you live, auto theft and damage to your vehicle are not covered under a renter policy. You'll need a separate auto policy. However, personal items inside the vehicle are typically covered if they're stolen, although there may be some exclusions or limits if it's business property.
If you park a boat or another type of recreational vehicle at the place you rent, talk to your agent about coverage and policy bundling discounts.
Keep track of your property and its value
If you have a renter insurance policy, it's important to maintain an inventory of your property and its value. It's also a good idea to walk through the place you rent and take video of each room a couple of times a year. If you use a cloud-based home inventory checklist or something similar, you can access it even if your home is inaccessible.
Another tip we share often is to do a semi-annual assessment of your property to make sure you have enough coverage and the right types of coverage. Talk to your agent and regularly review your coverage as your needs and personal belongings change throughout your life.