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Renters insurance covers your personal property and provides personal liability coverage. It doesn’t offer protection for the apartment. That’s handled by a landlord’s policy. 

Renters insurance policies protect your personal property, offers liability coverage and provides help if you ever need to live elsewhere for a time while your apartment is fixed.

A renters insurance policy covers those areas just like homeowners insurance. One major difference between renters insurance and homeowners insurance is that renters insurance doesn’t cover the physical apartment. Instead, a landlord’s insurance policy covers that.

If your personal property gets damaged or destroyed, you can file a claim for renters insurance. However, if your apartment gets damaged, that’s on your landlord’s insurance to handle.

Let’s take a look at renters insurance and some frequently asked questions.

How does renters insurance work with roommates and personal property?

Renters insurance companies may allow you to add a roommate to your renters insurance policy, but you want to be careful about signing up for a policy with someone else. Adding another person to a renters insurance policy increases the insurance company’s risk, so you’ll pay more for coverage.

The average renters insurance rate is $326 annually or $27 a month. Costs vary by coverage and location. So, getting a policy on your own won’t cost you much.

Your landlord will likely require that you have a renters policy. You may decide to share one with your roommate, but it’s usually a better idea to get separate policies.

With your own renters insurance policy, you can make a list of your possessions and get coverage for those personal property. Your roommate can also get their own policy for their possessions. That’s usually a better idea than adding a roommate to your policy.

How do renters insurance claims work?

Renters insurance reimburses you for damaged or stolen personal property. You have to file a claim with the renters insurance company, including information about the covered loss.

Here’s how to file a renters insurance claim:

  • If it’s a theft or break-in, notify police and file a police report.
  • Notify your landlord. The landlord may need to file a separate claim with their insurance if there’s structural damage.
  • Take photos or videos of the damage. Make a list of stolen or damaged possessions. Don’t throw away damaged items until the renters insurance company tells you to discard them.
  • Contact your renters insurance company. Don’t wait to notify the insurer. Renters insurance policies may only give you two or three days to report a loss.
  • Fill out the claims form with the applicable information. The insurance company will review and contact you about the process. A claims process can take hours to days depending on the severity of the claim.

Filing a claim may increase your renters insurance rates. Insurance companies base rates on risk. If you've filed a claim, an insurer may view you as a bigger risk. Hence, the higher renters policy rates.

Before filling an insurance policy claim, think about how much the company may reimburse you for the loss and whether it's worth it to file the claim. If a thief stole a 20-year-old TV and you have actual cash value coverage, you may get very little from the insurer if you file a claim.

How do renters insurance policy payouts work?

The renters insurance company will review the claim. It may send a representative to review the situation.

If the renters insurance company approves the claim, the company will offer a payout amount.

One major factor of the payout amount is whether you have full replacement cost or actual cash value coverage. Full replacement cost reimburses you for what the damaged or stolen items are worth new. So, if a thief steals a TV you bought for $1,000 three years ago, the renters insurance company would pay you the full amount to replace the TV.

Actual cash value pays the depreciated value. So, a three-year-old TV that you bought for $1,000 will be worth less. Full replacement coverage is more expensive but may be worth it to get full reimbursement for stolen or damaged property.

Once you agree to the payout, the renters insurance company will provide a check for the amount minus your deductible. The deductible is what you have to pay after you file a claim.

What does renters insurance cover?

Renters insurance covers your personal property inside the apartment and elsewhere, but that coverage comes with limits.

Here’s what renters insurance policies cover:

  • Personal property -- Helps you if your contents are stolen or get damaged by fire, water damage or other covered causes.
  • Liability -- Protects you if someone gets hurt in your apartment or you cause damage to others outside of your apartment, such as damaging someone else’s property. Liability coverage protects from lawsuits, so make sure you have enough coverage to cover your belongings adequately. Liability coverage is usually between $100,000 and $500,000. If you have more liabilities than $500,000, renters insurance companies offer umbrella coverage. Umbrella policies are often between $1 million and $5 million.
  • Additional living expenses -- Provides reimbursement for living expenses if you lose use of your apartment, such as following a fire or serious storm. Renters insurance can help with paying for lodging, meals and other associated expenses.

In addition to those key parts of renters insurance, some policies offer additional benefits, including identity fraud protection and reimbursement for food spoilage if you lose power. Read on to more about what does renters insurance cover.

What does renters insurance not cover?

Renters insurance lists covered perils on the policy. Covered perils are what the policy will cover, such as fire and storms.

Perils not often covered by renters insurance include:

  • Flood damage
  • Earthquakes
  • Mold
  • Intentional acts by the insured
  • Neglect

Also, renters insurance usually puts limits on personal property that it covers. For instance, jewelry and other high-price items often have coverage limits of $1,000 or $2,000. If you have high-priced personal property worth more than your coverage limits, talk to your renters insurance company to see if you can add endorsements to cover those items properly.