Renters

What renters coverage costs, and the part tenants underestimate

Renters is priced mostly off the contents limit and the liability limit, with the building's construction, age, and protection class in the background. It is the cheapest policy most people will ever buy, and that low price is exactly why it gets treated as a leasing formality rather than real coverage.

The liability half is the part worth paying attention to. A tenant is responsible for damage they cause to the building — a bathtub left running, a grease fire, a space heater against a curtain — and the landlord's carrier will pursue you for it. Liability on a renters policy is what stands between that subrogation demand and your savings. It also follows you off the property and covers your legal defence, which is normally paid in addition to the limit rather than out of it.

On contents, ask for replacement cost rather than actual cash value. The difference is whether a six-year-old sofa pays what a new one costs or what a six-year-old sofa is worth, and on a full-apartment loss that gap is usually larger than several years of premium. Estimate the limit by walking through room by room; almost everyone undercounts clothing, kitchen equipment, and the accumulated stack of electronics.

Two things that surprise people: a roommate who is not named on the policy is not covered by it, and coverage for your belongings follows you rather than the address — a laptop stolen from a car or a hotel room is generally still a covered loss, subject to the deductible.