Renters insurance is a variation of homeowners insurance, including many of the same coverages but excluding protection for the dwelling and other structures on the property. Renters insurance is meant to protect you against the sudden loss of property or dwelling, along with liability protection that serves multiple purposes.
If a covered peril forces you to temporarily live somewhere other than your home, renters insurance would reimburse you for the loss of use of the property. This could be the cost of a motel room, or loss of any portion of the home such as the kitchen or laundry facilities. Loss of use claims typically pay at settlement and you will need documented receipts for all of the costs involved.
If someone breaks into your home and steals your stereo and other entertainment devices, your renters insurance would pay to replace them. There are two types of coverage, Full Replacement Value and Actual Cash value, with the first completely paying to replace items at a slightly higher premium, and the second being more affordable but only paying a depreciated claim amount. The settlement type is important for most renters’ insurance claims, not just for claims related to theft.
Liability coverage is one of the most valuable protections of a renter’s insurance policy. Your liability coverage is for both property damage and personal injury liability, and applies to anyone other than your immediate family visiting your home or injured by something related to it. If the injured person later sues you, renters insurance would cover the litigation and representation costs up to the limits specified in the policy.
As you see, renters insurance is a robust package of special protections designed to protect people who do not own the home they live in. The home and other dwellings should be insured by the property owner, typically using another homeowner’s variation, a landlord's insurance policy. This would protect the structures on the property and any liability concerns related to it, such as a tree falling on a neighbor's fence.