Tenant insurance is insurance for tenants who rent their homes, whether they’re renting an apartment, house, condo, or room share. Most tenants are on a lease and pay a monthly rent to a landlord or property manager, however you do not have to be on a lease to buy a tenant insurance policy.
Tenant insurance, also known as renters insurance protects tenants’ personal property if it gets damaged or ruined in a covered peril. Landlords have their own landlord insurance to protect the physical building structure that tenants live in, but that insurance does not extend to the tenant’s personal belongings or liability.
Some landlords require their tenants purchase a certain amount of tenant insurance coverage, but not all do. Even if your landlord doesn’t require you to purchase tenant insurance, it’s still a good idea to protect yourself by purchasing a policy.
In this article:
What does tenant insurance cover?
A tenant insurance policy, or renters insurance policy, is financial protection for tenants (or renters) of all kinds. Every tenant insurance policy has three main components.
Personal property coverage
Every basic tenant insurance policy includes personal property coverage. This coverage will protect your personal belongings if they get stolen, damaged, or destroyed by a qualifying event. If your belongings do get ruined and your claim is approved, your renters insurance company will reimburse you the cost to replace them, after you pay your deductible. Most insurance providers consider these perils qualifying events:
Fire and lighting
Windstorm and hail
Explosions
Riots
Damage by aircraft
Damage by vehicle (not your own)
Smoke damage
Vandalism
Volcanic eruption
Falling objects
Weight of snow, ice, sleet
Damage from steam-heating/water-heating appliances/systems
Leakage or overflow of water or steam
Freezing of plumbing, heating, air conditioning
Short-circuit damage caused by electrical appliances
Tenant insurance will also protect your belongings outside of your rental premises. So if your suitcase gets stolen on vacation, your tenant insurance policy will reimburse you for some or all of the price of the suitcase and its contents.
Liability and medical expenses
Your tenant insurance policy will also protect your personal liability, meaning injury or property damage for which you’re responsible. If someone gets hurt in your apartment, your tenant insurance will help pay for the cost of their medical expenses. The liability coverage can extend to your pets, so say for example your dog bites someone — your liability coverage will help pay their medical expenses or your legal fees if they decide to sue you. If you accidentally damage someone else’s property, like if you knock over a candle and burn your friend’s table, then your liability coverage will also help cover some of those reimbursement costs or potential legal fees.
Loss-of-use coverage and additional living expenses
If your home becomes uninhabitable due to a covered peril, your tenant insurance will pay for you to temporarily stay elsewhere, like at a nearby hotel. For example, if there is a fire at your apartment complex and the damage takes weeks to fix, your tenant insurance will reimburse you for the price of your hotel and any additional living expenses that accrue, like if you have to eat at restaurants more because your hotel room does not have a kitchen.
You should keep your receipts during the time that you are dislocated from your home so that you have proof of how much you are owed when filing a tenant insurance claim.
Adding endorsements to your tenant insurance policy
If you have expensive items, like jewelry, that exceed your policy’s sublimit, you can schedule an endorsement to your tenant policy in order to add more coverage for that specific item. A limit is the maximum amount of money your tenant insurance will pay you for a claim, and certain categories of items, like jewelry, have lower sublimits.
You can also add an endorsement for specific perils that are not typically included in a tenant insurance policy, like if you live in an area with extreme weather or near a faultline you can add a flood or earthquake endorsement to your policy.
What does tenant insurance not cover
Most tenant insurance policies are named peril policies, meaning the perils your tenant insurance covers will be outlined in your policy’s declarations page. Most tenant insurance policies will not cover the following:
Natural disasters
Damage caused by pests, like bed bugs or mice
Expensive or rare items that exceed your policy’s sublimits
How much does tenant insurance cost?
Your neighborhood and building type will affect the price of your tenant insurance premium. The price of renters insurance can also vary from state to state, and companies will factor in if you live in an area with a high-crime rate or extreme weather. That being said, tenant insurance is one of the cheapest insurance products you can buy, costing an average of $16 a month.
The average annual renters insurance premiums in each state as of 2015, per the NAIC, are:
State | Avg Annual Premium |
|---|---|
Alabama | $242 |
Alaska | $172 |
Arizona | $191 |
Arkansas | $214 |
California | $202 |
Colorado | $166 |
Connecticut | $201 |
Delaware | $156 |
District of Columbia | $158 |
Florida | $195 |
Georgia | $226 |
Hawaii | $201 |
Idaho | $155 |
Illinois | $173 |
Indiana | $183 |
Iowa | $146 |
Kansas | $177 |
Kentucky | $172 |
Louisiana | $249 |
Maine | $147 |
Maryland | $161 |
Massachusetts | $196 |
Michigan | $203 |
Minnesota | $144 |
Mississippi | $262 |
Missouri | $180 |
Montana | $147 |
Nebraska | $149 |
Nevada | $189 |
New Hampshire | $150 |
New Jersey | $171 |
New Mexico | $191 |
New York | $202 |
North Carolina | $154 |
North Dakota | $114 |
Ohio | $185 |
Oklahoma | $242 |
Oregon | $166 |
Pennsylvania | $156 |
Rhode Island | $179 |
South Carolina | $192 |
South Dakota | $121 |
Tennessee | $210 |
Texas | $241 |
Utah | $149 |
Vermont | $155 |
Virginia | $153 |
Washington | $169 |
West Virginia | $186 |
Wisconsin | $132 |
Wyoming | $153 |
United States | $188 |
How to purchase tenant insurance
There are a few steps you should take when purchasing a tenant insurance policy:
Take a home inventory: You should itemize your personal belongings and take an inventory to see how much each specific item costs and how old the item is. This will help you determine the total amount of personal property coverage that you need.
Choose a policy Most tenant insurance companies offer you the choice between two types of tenant insurance policies: replacement cost policy or actual-cash value policy. Replacement cost policies will cover the price of replacing your items as if they were new. That means if your couch is destroyed in a fire, your replacement cost policy will reimburse you the price of a similar, brand new couch. Actual cash value policies replace items at their depreciated value, meaning the age and condition of your damaged couch will be factored into the amount you are reimbursed. Replacement cost policies pay out more, but your premiums will be higher.
Consider your premiums: Your premium price depends on different factors, like your deductible amount and coverage sublimits. The higher your deductible the lower your premiums will be.
Filing a tenant insurance claim
When filing a tenant insurance claim, you will have to provide your insurer with a lot of information and proof before your claim can be approved.
If your rental is broken into or your personal belongings are stolen, you should first file a police report and then contact your landlord. Next, you should document all the destruction or loss by taking photos and videos of the damage. You should not throw out any of your damaged items as they can be used as proof of a loss.
There are a few things you will need on-hand when contacting your tenant insurance company to file a claim:
Your policy number
Police report if you filed one
Documentation of loss (item receipts, home inventory, photos or videos of damage)
A phone number for your insurer to easily reach you
Once you file your tenant insurance claim, either online, through an app or over the phone, your insurance company will assign you a claims adjuster. Your claims adjuster will investigate your claim to determine if it is a covered loss and how much you are owed in reimbursement.
If your claim is approved, you will have to pay your insurance company your deductible before the rest of your coverage can kick in. So if you are filing a claim for $3,000 in losses and your deductible is $500, your tenant insurance company will pay you the remaining $2,500 after you pay them the $500 deductible.
