But individuals and families who rent can also get coverage for their personal possessions by getting renters insurance. Whether you’re renting an apartment, condominium, or house, you can get liability coverage and insure your belongings against theft, burglary, or disaster.
The main difference between the two? Homeowners insurance includes coverage for the structure of the home. Since you don’t own the building as a tenant, you’re not responsible for that, so you only get coverage for the interior of the space.
Renters insurance is often ideal for students, as it’s affordable, simple, and offers coverage against expensive mishaps that students may not be able to handle on their own.
When is Renters Insurance Required?
Technically, renters insurance is not actually mandated by law. But on a more practical level, renters insurance is often required by landlords as part of their lease agreement. This is so landlords can help mitigate their losses in case of a liability, damage, or theft claim that happens on the property. Even if neither your landlord nor the law requires renters insurance, it’s still financially prudent to look into getting a policy.
What Does Renters Insurance Cover?
Before we get into costs, let’s detail exactly what renters insurance typically covers.
- Personal property coverage. Renters insurance will cover things like furniture, electronics, clothing, and other personal items against fire, theft, vandalism, or other common perils. That coverage might also extend to items outside the home, such as the belongings in your car (check with your insurer about this).
- Liability coverage. If you are found liable for an accident, injury, or damage to another person’s property while in the rental unit, liability coverage will help cover your legal fees and medical expenses.
- Additional living expenses. Some policies will go so far as to help you find temporary living arrangements if your apartment is rendered uninhabitable by a natural disaster or other occurrence. It might pay for hotel stays, meals, and other necessary expenses until you can return to the unit.
How Much Does Renters Insurance Cost?
One of the major perks of renters insurance is its affordability. Compared with other types of insurance, renters insurance is usually quite affordable. On average, renters insurance can cost anywhere from $15 to $30 per month, with an average of $19, depending on factors like location, deductible, and coverage limits.
One of the easiest ways to save money on renters insurance is to do some shopping around. According to Ross Martin at insurance comparison platform The Zebra, premiums can vary significantly between companies. For example, State Farm offers an average of $15 monthly for renters insurance, while Allstate is the most expensive at $31 per month.
But premiums also depend heavily on location. Insurance provider Lemonade tends to have better rates in urban areas, while State Farm and Allstate may offer better rates in suburban or rural locations. Areas with low population density (such as in North or South Dakota) often have lower premiums, while areas with high population density and an increased risk of natural disasters (California, Florida) will have higher premiums.
Parents Homeowners Insurance and Student Accommodations
If you’re a parent, you might be wondering if your homeowners insurance can be extended to cover your child’s belongings while they’re a student. The answer is a conditional yes — this coverage usually only applies to on-campus dormitories, and may not be applicable to off-campus housing. That’s why it’s important to talk to your insurance company and make sure you fully understand your policy.
This coverage is usually limited to a certain percentage of the total personal property coverage. For example, if the parents’ homeowners policy covers $100k in coverage, the student’s coverage of their rented space would be limited to $10k.
Purchasing Insurance on Behalf of a Student
Even though renters insurance is often inexpensive, student finances are often tight, and parents might be wondering if they can take out renters insurance on behalf of their child. This is both possible and practical, especially when it comes to liability coverage. In order to get their child covered, parents should:
- List the student as the policyholder, with the address of the rented space included in the policy.
- Choose appropriate coverage limits and make sure that the student’s belongings and personal liability claims will be sufficient in case of mishap.
- Consider additional coverage options for high-value items such as computers, musical instruments, sports equipment, or any other items that might call for extra coverage.
Renters insurance may seem like a superfluous expense, but it can be a vital part of student life. Having your belongings and liability covered against disaster can be of crucial importance when money and time are tight, and policy features such as emergency accommodations and help with living expenses could literally be lifesaving.
