Why Tenants Should Carry Renter's Insurance


What Is Renters Insurance

Renters insurance provides people in rental housing with coverage for:

  • Personal Property - Consistent with the terms and limits of coverage, renters insurance covers damage to or the loss of the tenant's personal property;

  • Accidental Injury - If somebody is injured while in the rental premises, renters coverage may provide coverage for an injury claim made against the tenant; and

  • Negligence Claims - If the tenant commits an act that causes accidental damage to the rental unit, to other portions of the rental property, or to a neighbor's property, renters insurance may cover the cost of repair or replacement.

Approximately one third of renters carry insurance. The rest do not, potentially placing themselves at considerable potential financial risk.

Your Landlord's Insurance Doesn't Cover Your Losses and Liability

Some renters believe that because their landlords carry insurance, they don't need to have their own coverage. Unfortunately, that is not the case.

A landlord's policy typically applies to the physical structure of the building and to any common areas, but does not cover a tenant's property or injuries that occur within rental units as a result of a tenant's negligence. This means that if a pipe breaks or a sewer backs up, or if the building burns down, the landlord may be insured for any damage to the building or to property owned by the landlord, but coverage will not ordinarily extend to any property belonging to tenants property that is also damaged or destroyed. A landlord's policy also won't cover injuries caused by a tenant's pets.

Other People's Insurance Policies Probably Won't Apply

Typically, even where people live as roommates, a renter's policy held by one roommate will not cover the property of the other. While it is possible that a parent's homeowner's insurance policy will cover the property of a student who lives in a college dormitory, students should check their parents' policy language before assuming that their property will be covered. Even where coverage is available to a student through a parent's insurance policy, the coverage will rarely extend to off-campus housing.

Protect Yourself

If you are a renter, take a look at your property and ask yourself how much it would cost to replace it, in the event it was lost, destroyed, or stolen. That will give you an idea of the amount of renters insurance that you should carry. If you contact an insurance agency about renters coverage, based upon the estimated value of your property, you will likely be surprised at how affordable the coverage will be. Be sure to inform the insurance agency of any pets that you will have in your household when obtaining the quote.

Copyright © 2003 Aaron Larson, All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder. If you use a quotation, excerpt or paraphrase of this article, except as otherwise authorized in writing by the author of the article you must cite this article as a source for your work and include a link back to the original article from any online materials that incorporate or are derived from the content of this article.

This article was first published on Aug 1, 2003, and was last reviewed or amended on Aug 23, 2016.