Who Needs It?

Any individual who rents a home of any type or a storage unit should obtain a renter’s insurance policy to protect their belongings such as clothes, computers, stereo, furniture, etc.

How It Works

Renter’s insurance pays the renter for their belongings if a named hazard occurs. Named hazards typically include fire, hail, tornado, hurricane, and similar events. They do not cover floods. Some do not cover wind damage. For earthquake coverage, you will need an endorsement to an existing renter’s policy. While the landlord obtains insurance on the building and liability coverage for the public areas of the building, the renter must obtain their own. For coverage against flood, you’ll need a contents only policy from the National Flood Insurance Program.

Different Types of Coverage

You can choose between an actual cash value policy or replacement cost policy. Actual cash value typically costs less. It replaces the item accounting for its depreciation. A replacement cost policy costs more. It pays the cost of purchasing a replacement at full retail price.

Major Benefits

You’ll find numerous benefits of renter’s insurance. The main one is that you’ll be able to rent somewhere to live. Many landlords now require proof of renter’s insurance before they’ll give you a lease. Financial protection provides the other major benefit. In cases of storms and natural hazards, your landlord’s policy only covers their building. Your renter’s insurance covers your losses and can pay for you to stay in a hotel room while the landlord repairs their building.