No one wants to have an apartment break-in happen to them or lose their personal belongings to an unexpected tornado but sometimes life happens. When the unexpected occurs, everyone wants financial coverage and know that they have a backup plan or safeguard in place.
That’s where renters insurance comes in. While property owners will have insurance policies covering the apartment complex and building in place, it’s often up to the tenants to provide their own renters insurance where the policy covers personal belongings. In fact, most landlords are requiring proof of renters insurance to rent their property before signing the lease.
We’ll help you understand the fundamentals of a basic tenant insurance policy and provide ideas on how to show proof of renters insurance if your landlords require it.
What is a renters insurance policy?
Simply put, insurance is protection against financial loss. Renters insurance is a type of insurance policy that’s specific to tenants and renters only. Unlike homeowners insurance, renters insurance does not usually cover the structure of the building, but it does cover the renter’s personal property that’s housed inside the apartment.
Renters insurance exists to protect you and your personal belongings should an incident — like theft or fire — occur while you rent. The insurance policy would then pay you for the damage caused to your belongings. Renters insurance also protects renters from liability in case someone gets hurt within your apartment.
Why every renter needs renters insurance coverage
Landlords are requiring tenants to provide proof of renters insurance. This helps safeguard property managers from liability, but it also protects renters. People who have renters insurance can breathe easy knowing it protects their personal property. Here are a few reasons you need to purchase renters insurance:
- Offers protection of your personal items from theft or natural disasters
- Covers you from personal liability if someone is hurt within your apartment
- Often required to sign a new lease
- Sometimes required for lease renewal
- Can save you money should something happen to your personal belongings
- Provides peace of mind to tenants
- Helps expedite the rental process and avoid waiting periods if you already have a policy
Regardless of the reason you purchase renters insurance, it’s smart to have it when you live in a rental unit.
What exactly does renters insurance cover?
We’ve talked about the benefits of having renters insurance, but what exactly does renters insurance cover? Your coverage will vary based on your insurance company and policy, but in most cases, renters insurance policies offer these types of coverage:
Personal property coverage
Personal property coverage includes repairs or replacements for lost or damaged property, such as furniture, electronics and clothing. Depending on the policy, it may cover the costs of things like jewelry, but you’ll have to check with your insurance provider to see how much coverage comes with your plan.
Liability coverage protects the tenant in case an injury occurs to someone within the apartment and needs medical attention. There’s often a cap on how much liability coverage there is, so read your policy carefully.
Additional living expenses coverage
Additional living expenses coverage includes the cost of hotel or travel bills should your apartment become unlivable due to an incident that occurs on-site. This part of a policy will not cover property damage to the building itself — that’s usually the landlord’s responsibility — but it will cover your hotel bills while you find a new place to rent.
You’ll likely have increased premiums when you purchase more coverage and it’s up to you to determine how much renters insurance you need and how much coverage your landlord requires. Do your research to select the best policy for you.
How to show proof of renters insurance to your landlord
We’ve mentioned that landlords require proof of insurance to rent a rental property. But how do you show proof of renters insurance to a landlord? Here are several ways to show proof of renters insurance.
1. Provide the declarations page to your landlord
Every renters insurance policy will have a declarations page that outlines the details of your coverage. The declarations page will include things like your name, the policy number and how much coverage you purchased. You can send a digital copy directly to property management as proof.
2. Share a digital file with the landlord
You can show digital proof of your insurance by emailing the landlord a copy of the entire policy or the declarations page itself. When you send electronic proof, you have a digital footprint that shows your communication with the landlord. You can even ask your landlord to store this electronic copy on their property management software so you have a record of it.
3. Show them the physical copy of the renters insurance policy
If you’re more old-school, you can print out a physical copy of the policy as a way of showing proof of coverage. Print out a copy for your records and print out a second copy for the landlord to have, as well.
4. Have your insurance agent contact your landlord to confirm
If your landlord will accept verbal confirmation, you can ask the insurance company to call the landlord directly to show proof of insurance. Let your landlord know when your insurance agent will contact them so they can prepare for the call.
5. Add the landlord as an interested party to the policy
On any insurance policy, you can add an interested party to the policy. This is one way to show proof that the tenant has insurance. When the insurance agent is writing the policy, they will add the landlord as an interested party and then, notify the landlord upon completion of the policy.
6. Share the policy number and insurance agency with your landlord
Another way to show proof when renting is to share details of the policy with your landlord. You can share things like the number of the policy, the name of the insurance company and agent or the amount of coverage purchased.
7. Give verbal assurances of your renters insurance policy
Depending on the property managers, you can show proof by giving verbal confirmation of coverage. While this is only as good as your word, some landlords are OK with this type of proof. Keep in mind that there’s often no digital or written record of verbal assurances, so it’s not the most concrete or secure way to show proof of renters insurance.
These are some of the most common and accurate ways to show proof of coverage when property owners require proof.
How much does renters insurance cost?
Renters insurance is relatively inexpensive and ranges from $15 to $20 a month, or $180 to $220 per year. The cost of the policy will depend on how much coverage you purchase. Some landlords will even require that you have a certain amount of coverage, but that varies by location, by the landlord and even by state. When you’re analyzing your budget, it’s important to include renters insurance with your other utilities.
Keep in mind that most policies renew annually and if you don’t automatically renew your policy lapses and you may temporarily lose coverage. You also need to pencil in the cost of compensation for the agent, if they charge a fee to draft a policy.
How to get a renters insurance policy of your own
If you’re trying to rent an apartment and can’t sign the lease until you have proof of renters insurance, then it’s time to find a policy for you. There are ways to find an insurance agency who you get you set up:
- Ask your new landlord for a recommendation
- Use your existing insurance agency and bundle it with your car insurance, for example, to save money
- Use an online comparison tool to find an insurance company
- Do an online search to find an insurance agency
- Ask your neighbors who they use
- Go to your local insurance broker
Proof of renters insurance is key
Once your policy is in place, you’ll be happy to know that you can then sign the lease, move into your new apartment and feel secure knowing you’re protected from the unexpected.