Renters insurance may not be the most glamorous part of living in an apartment or moving into a new place. Still, it’s one of the smartest things you can get to protect your belongings and wallet. Even so, many people skip doing so or buy it without knowing what coverage they’re getting.
While renters insurance is both affordable and valuable in many situations, common mistakes can lead to overpaying, inadequate coverage, or ending up in a frustrating situation.
Here are the renters insurance mistakes you should avoid.
Thinking you don’t need renters insurance
This is, by far, the most common mistake. Many renters assume that their landlord’s insurance will cover their personal items if something goes wrong. Unfortunately, that’s not how it works. Your landlord’s policy usually only covers the building itself, not your personal belongings.
Even if you have liability coverage, your belongings still won’t be covered. For instance, if there’s a fire, a break-in, or a burst pipe, you could be left replacing everything out of pocket if you don’t have your own coverage.
Tip: ResidentShield Insurance protects personal belongings from unexpected events while still offering liability protection so that you’re safeguarded in every aspect of your home life. Get a quote to learn more about available plans.
Not knowing what your policy covers
Understanding the fine print is crucial to navigating the claims process without headaches. Renters insurance covers certain events (called perils) — like fire, theft or vandalism — but it doesn’t cover everything. Common exclusions include:
– Floods
– Earthquakes
– Hurricanes
– Pest damage
Tip: If you want protection from things like floods or earthquakes, you’ll need to buy separate coverage or add it as a rider (also called an endorsement).
“Named perils” vs. “All risk”
A “named perils” policy only covers specific events listed in the policy, like fire, theft, or vandalism. Basically, if something happens that’s not on the list, it won’t be covered. On the other hand, an “all-risk” policy (sometimes called “open perils”) covers everything except what’s specifically excluded, offering broader protection. Knowing which type of insurance you have can make a big difference when you need to file a claim. Be sure to review your coverage or ask your insurance provider for clarification.
Underestimating the value of your items
You may be surprised when you estimate how much your belongings are worth: Laptops, phones, gaming consoles, clothes, kitchenware, and even decorations can add up fast. If you insure everything at its full value, you’ll be better protected and more likely to get the payout you need if something goes wrong.
Tip: Walk through your place and make a rough inventory. Take photos or videos and save receipts, if you can. Doing so will not only help you estimate how much coverage you need, but it will also make the claims process much smoother if you ever need it.
Actual cash value vs. replacement cost
Some policies only pay out the actual cash value of your belongings, which means they factor in depreciation. For example, that $1,000 TV you bought two years ago? You might only get $400 for it after a claim. On the other hand, replacement-cost coverage pays what it would cost to replace the item at today’s prices.
Forgetting about liability protection
Many renters don’t realize that renters insurance also includes liability coverage. This may help if someone gets hurt in your home or if you accidentally damage someone else’s property.
Let’s say your dog bites someone or you leave the water running and it leaks into your neighbor’s apartment. That could get expensive fast.
Tip: Make sure your policy includes at least $100,000 in liability coverage. It usually doesn’t cost much to increase it.
Not updating your policy as life changes
Bought a new laptop? Moved in with a roommate or partner? Got a new piece of jewelry? If your life changes, your renters insurance policy should change, too. Informing your renters insurance provider about these types of events can be useful in case you need to make a claim.
Tip: Review and update your policy at least once a year or whenever something significant changes in your living situation.
Forgetting to list roommates or partners
If you live with at least one roommate, they need to be listed on your policy. If not, their belongings won’t be covered and any damage they cause may not be covered, either.
For instance, if your roommate accidentally starts a kitchen fire, but isn’t named on the policy, your insurance may not cover the damage.
Tip: Get a joint renters insurance policy or make sure both of you are listed on one. ResidentShield allows you to add up to three adult roommates or your spouse to a single policy for simplified coverage.
Not knowing the coverage limits on expensive items
Most policies have coverage caps on certain high-value items, like jewelry, art, or high-end electronics. For example, if you have a $2,000 engagement ring, but your policy only covers $1,000 for jewelry, you’ll be out the difference if it’s lost or stolen.
Tip: Look for extra coverage options like a rider or endorsement for anything especially valuable.
Waiting too long to file a claim
Each policy has its own deadline for reporting damage or theft. If you file claims as soon as possible, you increase your chances of having a smooth reimbursement process.
Tip: Check your policy or call your renters insurance provider to learn the time limit.
Protecting your home and belongings works even better if you understand what your insurance policy covers and can avoid the renters insurance mistakes that lead to denied claims or gaps in coverage.
It doesn’t take much time or money to get it right, but it does take a little attention. Review your policy, ask questions, and update it when life changes. It’s one of the best moves you can make as a renter.
