Renter's Insurance In a Nutshell: What You Need to Know

The last thing on your mind when renting a home or apartment is probably renter's insurance right? Renter's insurance can bring you a peace of mind that you are protected from life's unpredictable events. You may assume that you are covered under your landlord's insurance, but that is not always the case. Your landlord's insurance policy probably only covers damages to the actual building structure or anything attached to the structure (ex:gutters, awnings, roof, etc); not your actual possessions. Renter's insurance actually ensures that you can protect your own possession from a disastrous scenario.

Here is what you need to know about renter's insurance in a nutshell:
What is Renter's Insurance?

Renter's insurance typically covers the losses of your possessions. It is similar to homeowner's insurance except it does not include coverage of damage to the actual building you live (your landlord's worry).

It covers the costs of replacing personal items that are stolen, damaged, or destroyed. According to MSN Money, some of the types of disasters that are typically covered by renter's insurance are:

•Fire or lightning
•Windstorm or hail
•Explosion
•Riot or civil commotion
•Aircraft
•Vehicles
•Smoke
•Vandalism or malicious mischief
•Theft
•Damage by glass or safety-glazing material that is part of a building
•Volcanic eruption
•Falling objects
•Weight of ice, snow, or sleet
•Water-related damage from home utilities
•Electrical surge damage

Do take note that renter's insurance does not typically cover flood damage or earthquake damage.

What Does It Cover?

What renter's insurance covers varies. Your insurance will typically cover the following:

•Electronics
•Clothes
•Furniture
•Sports Equipment
•Appliances
•Jewelry
•Collectibles

Keep in mind that actual value coverage is vastly different than replacement value coverage. If you have an old sound system that you bought for a pretty penny back in 2000, it may not be worth much in actual value. If you have to replace that sound system, it will probably cost more. Make sure you know if you are covered for actual value versus replacement cost.

The one nice perk about renter's insurance is that it covers your possessions even if the damage occurs outside of home. Let's say you are outside and someone steals your wedding band. You are typically covered by renter's insurance.

It Protects You From Liability

Renter's insurance also often covers you from many types of liability -- such as someone getting injured in your home, damage you cause to another person't property (you mess up the neighbor's house), and housing costs if your own home becomes uninhabitable.

In the end, paying for renter's insurance is worth the hassle because it protects you from a host of bad things that no one can predict. It is one of those things that no one really thinks about, but when you are in a pinch, you are glad it is there.