What Is Renters Liability Insurance?

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Young renters (Photo: @heatherdeffense via Twenty20)
When you own a home, you have to get a homeowner’s insurance policy to provide coverage for your dwelling and belongings. Homeowner’s insurance pays to repair damage to your home and to replace belongings lost in a covered incident.
But what do you do if you rent an apartment? Insurance companies offer renter’s liability insurance for just this purpose. Here’s what you need to know about this type of insurance.

What Is Renter’s Liability Insurance?

If you rent an apartment or home, you should consider getting renter’s insurance to provide coverage for your personal property. In addition, renter’s insurance can provide some protection if a guest is accidentally injured in your home. On average, a renter’s insurance policy costs around $15 a month, or $180 a year. That is not a whole lot of money for some simple piece of mind.
Some landlords even require their tenants to carry renter’s insurance to transfer the responsibility for the tenant’s personal belongings to the tenants and not themselves. On the other hand, some local governments prohibit landlords from requiring tenants to get renter’s insurance. It’s best to check and see what the laws are in your local area before proceeding.
It’s always best to protect your assets whether you own or rent them. In many cases, a landlord is not responsible for any of your damaged or stolen personal property items or if someone is injured while in your home. When buying renter’s insurance, you need to know exactly what the coverage is.
Here are the different types of renter’s insurance coverage:
Personal Property: First and foremost, renter’s insurance protects your personal property if it’s damaged or stolen. Some common items that renter’s insurance replaces include:
  • Clothing
  • Electronics
  • Art and jewelry (although these items might require additional insurance depending on their value)
  • Furniture
  • Computers
  • Appliances
  • Personal belongings
Remember that your renter’s insurance policy only protects your personal property against listed perils. The perils that renter’s insurance usually covers include:
  • Fire, lightning
  • Windstorms, hail
  • Explosions
  • Riots
  • Damage by aircraft or vehicle (not your own)
  • Smoke damage
  • Vandalism
  • Theft
  • 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
Liability: The liability part of renter’s insurance can come into play in two different ways. With the first, the renter’s insurance will pay for any damages caused by your negligence as the renter. This includes inadvertently starting a fire or similar damage that happens as a result of an action you take.
So, if your landlord has to take you to court to recover the money they paid out to repair the apartment, your renter’s insurance will pay for this as long as the damage is from a covered peril.
The second area that renter’s liability insurance provides coverage for is when someone is injured in your apartment. This is only for injuries sustained due to negligence on your part. If someone gets hurt because of the landlord’s negligence, a faulty step on the stairs that the landlord was supposed to fix, for example, then the landlord’s insurance is liable.
Loss of Use: If your apartment or rented home is damaged by a covered peril and you have to move out while it’s repaired, your renter’s insurance should pay for a hotel. Most renter’s insurance policies pay for the shortest amount of time as possible in these cases. As soon as your home is livable again, your renter’s insurance will stop paying for a hotel and other expenses.
Third-Party Property Damage: You renter’s insurance should also pay if your actions accidentally damage another renter’s property. This could be in the form of an overflowing tub damaging the apartment below, a fire causing damage to another neighbor’s property, or even if your kids hit a baseball through someone’s window.