Apartment Insurance: Covering Your Possessions

Apartment insurance, more commonly known as renters insurance, protects you against loss and damage to your personal belongings when you rent a house or apartment.

Many renters make the mistake of assuming that any damages will be covered by their landlord’s insurance when, in actuality, the landlord’s insurance will only cover damage to the structure of the building. It’s up to you to protect your items from damage or loss.

What It Covers

Home insurance protects your apartment from the following catastrophes:

• Fire and smoke
• Theft and vandalism
• Flood and water damage (from appliances, for example)
• Wind, lightning and windstorm

This insurance policy would cover damages to items like:

• Computers, TVs and other electronics
• Furniture
• Clothing
• Antiques or vintage items
• Household items and personal appliances

In addition to covering your personal belongings, rental policies also cover your liability if someone is injured in your home and decides to sue. Furthermore, most cover your living expenses if you’re temporarily unable to live in your apartment because of a catastrophe.

Most people are also pleasantly surprised to learn that this coverage is very affordable. Because the policy only covers the contents of your home—and not the structure of the building—you may spend as little as $160 per year on renter’s insurance, depending on what policy you buy.

Needless to say, the “package deal” protection and affordable cost of these types of policies make them more than worth what you pay for them.

Shopping tip: Buy apartment insurance with your auto coverage and receive a discount!

Types of Policies

According to the Insurance Information Institute (III), there are two types of renters policies:

(1)   Actual Cash Value: Pays to replace your items minus a deduction for depreciation, up to your policy amount.
This means if you bought your laptop two years ago for $1,000, the insurer will only reimburse you for its worth at the time of damage—which could be a several hundred dollar difference

(2)    Replacement Cost: Pays the actual cost of your possessions with no deduction for depreciation, up to your policy amount.
This means no matter when you bought your laptop, you’ll be reimbursed for the amount you paid for it.

Because replacement cost policies don’t deduct for depreciation, they are most recommended by insurance experts. 

The affordability combined with the excellent contents insurance really makes apartment coverage a no-brainer.