A Beginner's Guide to Renters Insurance

Some property managers require you to have renters insurance, but even if it's not required, renters insurance is still a good idea.

Your property manager's insurance covers the building and land property and their repairs if there's damage, but it doesn't protect your belongings. Renters insurance is what covers the costs of your personal property if it is damaged or stolen, and obtaining this insurance coverage is your responsibility as a renter.

Renters insurance is designed to help you recover from a loss of personal property without financial hardship, and insurance policies are available for specific items and situations.

What's covered?

Renters insurance generally includes coverage for fire or water damage to your personal property.

It may also:

• Pay for hotel stays or meals if you must relocate while your apartment is repaired.
• Cover medical payments if someone is injured in your apartment.
• Cover liabilities for damage to other people's property. For example, if a flood in your apartment causes water damage to the unit below yours.

What isn't covered?

Most renters insurance policies will exclude:

• Damages from major  natural disasters, such as a flood or earthquake. However, you may consider buying a separate policy from the National Flood Insurance Program (NFIP), especially if you live in an area prone to flooding, to cover your personal belongings.
• Damages caused by infestations, such as bedbugs or rodents, are often excluded from renters insurance policies.

You will choose how much coverage you want to take out in your individual renters insurance policy, and the policy might include specific limits for coverage on jewelry or other valuables.

It's important to read the policy options and talk to your insurance agent to make sure you are getting the coverage that best fits your needs.

Where can I get renters insurance?

Make sure to obtain your renters insurance through a licensed insurance agent or company.

Insurance companies will often provide a discount for bundling multiple types of insurance, such as auto insurance and renters insurance. If you have an existing insurance policy, it makes sense to start by reaching out to your current insurance provider.

How much does renters insurance cost?

You must pay an annual premium to keep a renters insurance policy active. Then, if you need to file a claim, the policy will kick in to cover the loss and related expenses.

Renters insurance is usually affordable — generally, between $10 and $15 per month. However, insurance policy costs can vary greatly, so it's important to shop around. When comparing quotes, be sure to read the fine print and compare coverage.

Like most insurance policies, if you pay the entire year upfront, it may cost less overall than paying quarterly or month-to-month. Some insurance companies check credit scores and credit histories to assess the risk of providing you coverage, which can affect the cost and coverage of the policy. Generally, a higher credit score will result in a lower insurance rate.