UPDATED: Mar 19, 2020
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If you live in an area with a high crime rate, insuring your
property against burglary and theft may be the only method available to fully protect your family. And even if the location is not well-known for crime, you could be targeted by someone who, for instance, saw you bringing in that new big screen Renters insurance protects against theft, but you need to have the right coverage for your specific requirements.
What is Renters Insurance?
Renters insurance is a type of homeowners insurance for people who rent but do not own. Technically, the name of the policy is HO-4 Homeowners insurance, the coverage needed to insure property and provide liability coverage, without protecting the home or other structures. HO-4, because it does not insure structures, is much less expensive than a standard home insurance package.
Renters Insurance and Personal Property
A renters insurance policy provides two important types of coverage: Property insurance and liability insurance. In the case of theft, your personal property coverage will replace items lost, up to the amount of personal property protection in the policy. Renters insurance will only cover the property of the insured person and their immediate family members, and you will need to provide proof of ownership when you file the claim.
Why a Home Inventory Matters
The best way to itemize your personal property is to use a video recorder and move from room to room. By having a video record of your belongings, you are able to demonstrate to the insurance company the items you owned, including the brand and a visual indication of the condition of the item. Remember, everything you own is part of your personal property, including your furniture, appliances, wardrobe, and items that are stored outside or in other storage locations on the property.
Matching Property with Coverage
The single largest error made by renters and homeowners alike, in regards to insurance, is to assume that the default amount of personal property insurance is enough. The truth is that the average family has many thousands of dollars in personal property, and a standard policy may only pay for a percentage of the loss if you have to file a large claim. Use your home inventory to calculate the actual value of your possessions, and purchase personal property insurance that matches what you need.