Individuals who rent an apartment, condo, townhome or house need renters insurance to cover their personal belongings in the event of a disaster like a fire, theft, or legal expenses if someone is injured on the property. Without renters insurance, the individual is responsible for all the costs associated with events like: 

•    Theft and vandalism
•    Fire and smoke damage, water damage from plumbing or appliances
•    Loss of use costs if the home becomes uninhabitable
•    Vehicle damage to the property

Additionally, the liability coverage portion of renters insurance will help cover the costs associated with lawsuits should the renter be sued for injuries that a guest suffers on the property or for damage to their property. 

If a covered event occurs, renters insurance provides financial reimbursement for losses and other costs. For instance, imagine a small electrical fire damages items in the renter’s bedroom. The renter would file a claim to receive compensation for the loss of their belongings, including furniture and clothing, minus their deductible. 
Most people aren’t aware of how much the value of their belongings can add up. Before obtaining a renters insurance policy, renters should take time to add up the costs of items like electronics including computers and televisions, jewelry, furniture and clothing. 

In most cases, landlords require their renters to obtain renters insurance. Also, while renters insurance is not required by law, it is highly recommended to have.

Renters insurance policies do have some exclusions, including:

• Flood and earthquake damage
• Infestations, such as bedbugs or mice
• Roommate belongings – only the policyholder’s belongings are covered
• Property damage to the exterior of the building such as the roof and siding – these should be covered by the landlord’s insurance

The cost of renters insurance will vary depending on a few factors, including:

• Location of the dwelling: Safer locations with fewer crimes usually means lower renters insurance costs. Coastal property would drive prices higher due to larger chance of event.
• Policy coverage limits: Individuals can lower the cost of their renters insurance by choosing lower limits that more accurately cover their belongings’ values.