Should You Purchase Renters Insurance?

A renter who has problems with plumbing, their refrigerator, or heating can easily call the maintenance crew for their apartment complex or contact their renter. People who rent a home or apartment will not have many issues to worry about.

However, there are a few issues that should be a worry. Any building complex or a rented home has the potential to be damaged in a storm or burglarized. Many people may not realize their possessions need to be insured. Renters insurance is the best option for anyone renting an apartment or a home.

Specific Needs

Insurance companies can tailor insurance policies for renters to fit their specific needs. One aspect that may confuse people is the coverage options and limitations that are included. The main reason is often due to a lack of understanding of standard insurance needs.

This is common for young adults who may have a desire to live by themselves. When a young adult moves out on their own, then any possessions kept in an apartment need to be insured.

There are a few key differences between homeowners insurance for people who own their home and a standard renters insurance policy. However, there aspects that make each type of insurance similar.


Personal Possessions – Insurance policies for renters include coverage for personal possessions. This is often the main component of the policy. Personal possessions will typically include electronics items, a set of furniture, clothing, a variety of kitchen appliances, and various tools. This same coverage will be available on a standard homeowners insurance policy.

Liability – Homeowners insurance and insurance for renters also include liability coverage. A renter or a homeowner will need this coverage to protect themselves from liability that is due to bodily injury or if any property damage occurs. This can be caused by you or any family members.

Additional Living Expenses – If a home or apartment becomes uninhabitable for reasons which can be due to a storm, fire, or other covered peril. This coverage is available to renters and homeowners and is used to pay for expenses, such as hotel bills and meals.

Key Difference

The insurance policy for a renter is only meant to cover the personal property and liability when inside a rented home or apartment. Any damage done to any part of the building, such as the walls, plumbing, the roof, or any fixtures is covered by the policy of the landlord or apartment complex.


Most renters often concentrate on the value of any possession when considering renters insurance. This is important, but more thought should go into liability coverage. The reason is any visitors may become injured and file a lawsuit when in a renter’s home or apartment.

How It Works

The monetary value of any loss when a claim is filed is determined by an insurance adjuster. A renters policy will reimburse a policyholder in one of two ways.

Actual Cash Value – This is similar to the method used for calculating automobile insurance polices. A renter will be reimbursed the value of any damaged items after deducting for depreciation and the wear and tear that has occurred. One benefit of actual cash value is the premiums are often cheaper.

Replacement Cost Value – This is a method that does not calculate depreciation and replaces any items that are damaged with similar items are current market value. However, the premiums for a policy will be higher for a renter.

The Cost

The total cost for a renter to purchase an insurance policy will depend on the coverage limits that have been selected. One thing to keep in mind is to create a checklist of items that are in the apartment or in a rented home. Many people will be surprised to discover the total is more than they realize.

Premium Savings

There are many ways for an individual to lower the cost of an insurance policy when renting. There are generally a variety of discounts that are offered by insurance companies. One option that is available to lower the cost of the premium is to bundle their renters policy with their automobile policy.

Apartments with an alarm system, smoke detectors, sprinkler systems, and deadbolt locks can also qualify for some form of discount. The right discounts can easily save a renter up to 25 percent or more on the cost of the policy.

The best way to lower the cost of an insurance policy is to have a high deductible. This means choosing a deductible that is $1,000 to $2,000 when purchasing the policy.

Anyone who is planning on getting an apartment will need to shop around for a suitable policy. One of the best options is to look for an independent insurance agency. Independent insurance agencies have a variety of insurance carriers available and can choose the best option to meet any need or preference.

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