Renters Insurance Exploration: Most Things you Need to Know

They say it's tough to find a rental that allows pets -- because no one has the right claws in the contract. Of course, if you don't have a pet, that's the least of your worries.

A more challenging issue, though, will be settling on the right renter's insurance policy. This form of coverage can be confusing, especially when you're new to it. Get past the confusion, and you'll see that renters insurance provides critical financial protections and can be found relatively quickly. It's also affordable. So there's rarely a good reason to rent without securing this coverage.

Read on for an introduction to our best Learning Center articles about renters insurance. These cover renters insurance and its protections, how to determine the amount of insurance you need, and frequently asked questions about renter's policies.

What renters insurance covers

Renters insurance includes three main types of coverage. These are personal property coverage, additional living expenses, and personal liability.

Personal property coverage

This reimburses you for loss or damage to your movable belongings under certain circumstances. Movable belongings include clothes, appliances, and furniture. And the certain circumstances -- also known as named perils -- are things like theft, vandalism, fire, smoke, wind, hail, snow, and water damage from burst pipes. Your insurance documentation will define your named perils.

Your personal property protections apply to items you keep in your home and may extend to your belongings in offsite storage. You do pay a deductible on any personal property claims.¹

Additional living expenses

This helps you pay for extra rent, food, transportation, and pet costs you incur if your rental is temporarily uninhabitable. As with personal property coverage, the cause of the damage to your place must be a named peril. If a non-covered incident caused the problem, then you are financially responsible for your extra living expenses.

Personal liability coverage

This protects you against lawsuits and damage claims when you accidentally injure someone or harm their property. This coverage extends to injuries and damages your pet or kids cause.

Renters policies will typically include $100,000 in personal liability coverage. The carrier can use those funds to defend you in court, pay settlements, or both.

To learn more about the nuances of renters insurance coverage, see our post on renters coverages, exclusions, and common myths.

Determining how much renters insurance you need

A key metric is determining how much renters insurance you need is the value of your personal property. Your carrier will suggest limits for additional living expenses and personal liability coverage based on the amount of personal property coverage you request.

A home inventory is the most reliable method for quantifying the value of your possessions. That sounds like no fun at all, but it's an incredibly useful exercise. When you finish the inventory, you'll have a full list of what you own and estimated values. That information justifies you how much insurance you need. It also helps you manage your policy going forward.

To learn more about how and why you should complete a home inventory, see our post: Know Your Needs: Navigate Renters Insurance Like a Pro.

Renters insurance FAQs

Does your renters policy extend coverage to your roommate? How about your kid who's living in a dorm room out of state? Can you file a claim with your renters insurance if you dropped your TV and broke it?

These are just a few of the burning questions we answer in our renters insurance FAQs. There may be an answer to your top renters insurance questions, too. Find out now. And if we don't have your question answered, please reach out and let us know!