Renters insurance protects you with personal liability coverage and your stuff with your personal property coverage. Your landlord’s insurance protects the building you live in. But when your parents are your landlord, the line isn’t so black and white. In some cases, you may be covered by their policy. In some cases, you’ll need your own renters insurance.
You don’t need a lease to buy renters insurance, and you don’t even need to be paying rent. If you’re living in a house you don’t own, it’s a good idea to buy renters insurance, even if the house’s owners are your parents.
If you are living with your parents, your status as a resident relative automatically means that you are covered by their renters insurance policies, even if your name has not been added to the policy.
However, just because you’re technically covered by their policy doesn’t mean you have enough coverage.
There are several reasons why you may want to purchase your own renters insurance policy:
Though as a live-in blood relative your are technically covered by your parents’ policy, it’s still their policy. That means that they alone can make changes to the policy, like increasing coverage limits, and handle claims to the policy. It also means that any checks for reimbursement will be made out to them.
If you have property that you want to make sure you have coverage for, it’s important to get your own policy. Your parents’ policy was taken out based on their own belongings — if a true disaster were to destroy everything, the policy limits of their policy may not be enough to replace their stuff and your stuff. This is especially true for certain categories, like electronics. If you want to ensure that you’ll be reimbursed for destroyed property, you need your own policy.
Another reason to get your own renters policy is to ensure that you have your own liability coverage. If someone makes a liability claim against you personally — for example, you accidentally trip someone and they break a bone — your renters insurance policy would pay for legal representation and funds to settle the claim, up to your policy’s limits. If you are living with your parents and don’t have your own policy, the hurt party could make a claim through your parents’ renters insurance policy, and that claim could affect your parents’ insurability. Would you want your parents to pay for your mistakes? If not, get your own renters insurance policy.
Second homes have secondary policies, either a landlord policy or a dwelling fire insurance policy or, in some cases, a second home rider added to the primary homeowners insurance policy. These policy types just cover the physical structure of the home, not its contents, and these policies don’t offer liability coverage to residents, just owners and their households.
Unlike when you’re living in your parents’ home with them, if you’re living a secondary home, you’re not considered a part of their household, and their coverage would not extend to you.
There is one exception, and that is if you are a student under 25 who is still financially dependent on your parents. In that case, your parents’ coverage generally follows you no matter where you live. But because secondary home insurance is so complicated, have your parents talk to their insurance agent to see if you’re covered by their policy.
Buying renters insurance if you live with your parents, or in a house owned by your parents, is the same as if you were living in a home owned by someone else, and it’s really easy.
You can buy renters insurance in just a few steps:
A home inventory is a list of everything you own and an estimate of how much each item costs. You can get fancy with photos, videos, and apps, and it’s a good idea to do that, but at its heart, a home inventory is just a list of your stuff.
Total up all the value of everything you own and you’ll find out how much personal property coverage you need. For liability coverage, a rule of thumb is to buy enough to cover any assets as you have (e.g., any savings or investment accounts). When you get a renters insurance quote from Policygenius, you can use our Renters Insurance Calculator to quickly find out how much renters insurance you need — and how much it will cost.
Renters insurance rates can vary by provider, so it’s important to get quotes from several different insurers when you’re shopping for renters insurance. Use an insurance broker like Policygenius and you can get several quotes from insurance agencies at once.
Once you pick a plan that fits in your budget, it’s time to sign and get it in force. You’ll pay your first premium and you’re policy will be active. This is also an important time to talk to your insurance broker or insurance agent about the category limits and exclusions of your policy so you understand your insurance coverage.
The final step to ensure your plan is working hard for you is to talk to your insurance company or broker about adding riders, or endorsements.
Riders are additions that you add on to existing renters insurance policies to make them work better for you. For example, you can add a rider that will make sure your expensive computer, which may not be covered fully by your electronics category limit, is fully covered wherever you are. If you live in an area prone to earthquakes, you can add a rider to make sure you’re covered if one destroys your personal belongings. Riders generally only increase the cost of your policy a small amount, but can add a huge amount of additional coverage.
Policygenius can help shepherd you through the renters insurance buying process, from answering your questions about coverage, to getting a policy in force and adding riders. Start by getting a free renters insurance quote.
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.