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Consumer Insight

July 19, 2023

Renting Your Home? This is What You Need to Know About Renters Insurance

Do you rent your home from a property management company or landlord? Their insurance will not cover your personal belongings. Only a renters insurance policy will protect your belongings if they are damaged or stolen. Consider a policy to protect what you own.  

How much does renters insurance cost? 

Renters insurance policies typically are affordable, considering that replacing even a small number of items could cost thousands of dollars. A basic policy can cover these costs.  

Many insurance companies offer discounts if you have fire or burglar alarms, fire extinguishers, sprinkler systems, or deadbolts on exterior doors. You may also get a discount if you have more than one policy with an insurance company or had no claims on your previous policy.  

Be sure to ask your agent or insurance company about the discounts they offer. 

What will renters insurance cover?  

Some policies may cover your living expenses if you can’t live in your home after a covered loss. Renters insurance may also pay for a visitor’s medical bills if you’re found responsible for their injuries. 

Many policies cover your belongings outside of your home. For example, if someone steals items you own from your car or a hotel room, your policy will provide coverage.  

What are my policy options for renters insurance? 

Most policies typically provide three types of coverage: personal property, liability, and additional living expenses. 

  • Personal property coverage helps pay to repair or replace personal belongings if they are damaged, destroyed, or stolen.  

  • Liability insurance can help protect you if a guest is injured while in your home or apartment, or if you accidentally damage someone else’s property. Renters insurance policies have liability limits, which are the highest dollar amount the policies cover. Policies also typically have deductibles, which are the amount you must pay if a loss happens. 

  • Additional Living Expenses will help pay expenses that are beyond your normal expenses because you can’t live in your home. The insurance company will not pay all your living expenses. It will only pay the difference between your previous living expenses and your new temporary expenses. 

You might also have to choose between actual cash value and replacement cost value when you purchase your policy.  

  • Actual cash value only pays you the current value of an item. Your personal belongings lose value over time due to things like age and wear and tear. For example, your computer might have cost $2,000, but it is five years old. The value of the computer may currently be $500, which is the amount the insurance company would pay if you had actual cash value coverage.  

  • Replacement cost value coverage would reimburse you for a new computer that is similar to the computer that was destroyed. 

Remember, as a renter, your landlord or property management company’s insurance will not cover your personal items in your rented property. Consider a renters insurance policy to protect your items.  

For more information and definitions, check out the NAIC's Consumer Guide to Home Insurance

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.