renters insurance costs an average of $130 per year. For that price, you’ll get coverage for your rental property, personal liability, loss of use, and any medical payments for persons injured on or in your rental property.

Buying insurance is very rarely the first thing new renters consider when they move into a brand new apartment or condo, but purchasing

renters insurance

is one of the best ways to ensure financial and legal security for any kind of loss or accident in your rental property.

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has put together a complete guide to everything you need to know about renters insurance in the Mid-Atlantic’s “Old Line” state of Maryland.

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What is renters insurance?

If your property is damaged, destroyed, or stolen, a renters insurance policy will provide you with the financial protection you need to repair or replace your valuables. A renters insurance policy also will provide you with personal liability coverage.

A renters insurance policy typically includes the following coverages:

Property coverage (Coverage C): This insurance covers the actual cash value (ACV) or replacement cost of your belongings if they’re destroyed or damaged by a peril outlined in your policy.

Loss of use coverage (Coverage D): Also known as additional living expenses (ALE) coverage, this component of your policy pays for living expenses, like temporary lodging or groceries, incurred as a result of damage to your property.

Personal liability (Coverage E): If another person (or pet) is injured in your home, your personal liability insurance will cover any amount you’re legally required to pay, including court and attorney fees. Personal liability coverage also protects you if their property is damaged, as well.

Medical payments (Coverage F): This coverage pays for any medical expenses when someone is injured on your property.

You can tabulate the specific amount of coverage that’s right for you by doing a complete inventory of your belongings, which should include everything you own of any significant value. This typically includes electronics, furniture, and expensive artwork. Landlords often establish thresholds for required liability coverage between $300,000 and $500,000.

What does renters insurance cover?

Renters insurance covers only the perils named in your policy. These may vary from place to place, but in general, you can expect your policy to cover:

Fire

Theft

Frozen plumbing

Lightning

Impact by a vehicle

Falling objects

Explosion

Windstorm

Vandalism

Hail

Your renters policy might cover all of the above and more—or it might list fewer named perils.

Be sure to read your policy carefully so you understand what’s covered. For instance, if you live in the Chesapeake Bay area, flooding may not be included in your renters insurance policy. You’ll need to purchase special insurance to get full coverage that’s designed specifically for the part of the Mid-Atlantic coast that you call home.

What does renters insurance not cover?

Renters insurance is typically quite comprehensive, but it won’t protect everything in your home. Here are a few non-covered items to keep in mind:

Work-related items: If you run a business out of your rental home (or just work from home), any property associated with your full-time or part-time job may require special insurance. If your side hustle is slinging pizzas from your brand new woodfire oven, make sure to explore alternative coverage options for your shiny new equipment.

Valuables: Your great grandfather’s telescope and your adult daughter’s collection of limited-edition Beanie Babies may not be covered by your standard renters insurance policy. Expensive collectibles often require extra coverage. That includes jewelry and priceless antiques, as well. (Not literally priceless, of course!)

Your car: Even if your vehicle is parked in front of your rental property, it will never be covered by your renters insurance policy. You will have to purchase

car insurance

that meets Maryland’s insurance standards.

MORE:

Maryland minimum car insurance laws

Key Takeaway Renters insurance covers your belongings and also provides important legal protections if an incident takes place on your property.

Is renters insurance required in Maryland?

Renters insurance is not required by law in Maryland. Landlords, however, can elect to require you to purchase renters’ insurance. Even if your landlord doesn’t require it, renters insurance is always a wise purchase; it covers your property as well as your legal liability in the event an accident takes place on your rental property.

Luckily for renters everywhere, renters insurance is relatively inexpensive. The cost varies from year to year and state to state, but Maryland renters insurance tends to cost an average of $30 less than the national average of $160 per year.

That means you can expect to pay somewhere between $10 and $12 a month for a policy that can ultimately pay out thousands of dollars if an accident should occur.

Key Takeaway Whether your concern is the Chesapeake overflowing, a Beanie Baby blaze, or a clumsy neighbor’s inability to avoid your prized telescope, protecting your belongings with a renters insurance policy makes great financial sense.

How to build a Maryland renters insurance policy

It’s incredibly simple to customize your renters insurance policy. First, put together a personal asset inventory for every room in your apartment, condo, or rental home. Do that by making notes of the following information for all electronics, appliances, art, furniture, and yes, even those beanie babies:

Quantity

Purchase date

Purchase price

Brand number

Serial number (if available)

Take photos of every item. You’ll be glad you did because documenting your property extensively will ultimately make your claims process much smoother in the event you do one day submit a claim.

Select a personal liability limit that works for you. Your landlord may insist upon a certain amount of liability insurance, but you may be able to choose your limit. Landlords often set the liability limits around $400,000, but you can adjust that number to as low as $100,000 if that’s more appropriate based on your personal inventory.

Make sure flood damage is covered in your location. In some parts of Maryland, separate flood insurance is required. If you’re renting at the foot of the Atlantic Ocean, you may need to purchase a special policy with extra flood coverages alongside your renters insurance.

Actual cash value vs. replacement cost

If you decide to purchase renters insurance, one choice you’ll need to make is whether or not you go for a policy that covers the actual cash value (ACV) or replacement cost of your damaged or destroyed items.

If your policy covers replacement costs, you’ll be able to claim the price you originally paid for your damaged item. For example, if you were the victim of a break-in and your $1000 flatscreen TV was taken off your wall, your replacement cost policy would cover the entire $1000 replacement cost.

If your policy covers actual cash value, you will only be able to claim what the television was worth at the time of the accident. When factoring depreciation into the broken TV scenario, you may only be able to claim a fraction of the original $1000 that you spent to buy the TV.

Replacement cost coverage may sound more appealing on the surface, but keep in mind that you will have to pay more for that policy. At the end of the day, you have to make the decision that works best for your risk profile and budget.

MORE:

What does actual cash value coverage mean on insurance?

How to find cheap renters and car insurance

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FAQs

Is renters insurance worth it?

For sure! Renters insurance is one of the least expensive flavors of insurance out there, and it gives you extensive coverage for both property damage and personal liability.

What is the average cost of renters insurance in Maryland?

Renters insurance rates change every year, but you can usually expect Maryland’s rates to come in slightly under the national average of $160 per year. You can typically expect to pay somewhere between $120 and $140 a year for a renters insurance policy in the great state of Maryland.

You could save 15% or more on renters insurance by bundling

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