Renters Insurance

What it protects against

The financial consequences of a loss of personal property due to a broad range of perils. These are generally the same perils covered by homeowners policies. The do not include flood, earthquake, war, nuclear accident and other natural disasters excluded by policy language. Renters policies also provide liability coverage similar to that in homeowners policies, and they cover the extra expenses of having to live elsewhere if a dwelling becomes inhabitable. Different kinds of policies cover mobile homes, condominiums and co-ops.

How it works

Landlords are responsible for insuring their buildings. Renters insurance does not cover the actual building, but it does cover changes made to the inside structure, such as carpeting, kitchen appliances and built-in bookshelves. Like homeowners, renters can choose whether to insure up to the full replacement cost.

Who needs it

Tenants who want to protect the value of their possessions or insure against liability or the extra cost of living elsewhere if their rental unit is damaged or destroyed.

Who may not need it

While some renters may not need this insurance in the technical sense of the word, most would probably want to have it.

When to buy it

When you begin renting.

How you pay for it

Annual premiums.

Terms to Know

• Actual Cash Value
  Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
• Floater
  A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.
• Replacement Cost
  The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.