Most renters forgo renters’ insurance thinking that the landlord’s insurance will cover losses in the event of a theft or fire. However, most landlords’ policies don’t cover any of their tenants’ personal belongings. This means that all of your valuables, including electronics, computers, clothing, antiques, furniture, jewelry, and others are at stake if the building burns down, suffers water damage, or is vandalized. It also means that you will be liable for all expenses related to any injury that a visitor incurs while in your apartment, including legal expenses.

What does renters’ insurance cover? According to the Insurance Information Institute (III), most policies name certain “perils” against which it will protect the policyholder, including fire or lighting, vandalism/theft, smoke, windstorms, and water damage. Standard policies generally cover cost-of-living expenses as well in case you are displaced by one of the named perils.

When shopping for insurance quotes, be aware that there are two different types of renters’ insurance policies, says the III. An Actual Cash Value policy will cover the value of your possessions (minus a deduction for depreciation) up to the limit of the policy. A Replacement Cost policy will cover the value of your possessions (with no deduction) up to the limit of the policy. In addition, you may want to get an insurance quote for a “floater.” A floater provides coverage for items that exceed the limit of the policy and covers them for accidental loss. If you’re looking on the Internet for renters insurance, online quote services will list a floater as a separate policy. 

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