NDSU Extension - Sargent County


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Renters Insurance

apartment for rent

In anticipation of needing a place to live this summer while he is enrolled in summer school, and with a desire to live off campus next fall, my son and two friends are now renting an apartment. After searching and comparing, they found one that met their needs and they signed the lease. My son has had fun scavenging and shopping for furnishings, a few small appliances, and a bit of décor. As “the mom,” I’ve been happy to be a spectator to all this, and to also help when asked and able. One thing that neither he nor his roommates had considered was renter’s insurance. I saw it as a teachable moment.


Landlords are not financially responsible when there is a fire, theft, or other catastrophe in their rental units. They may have insurance to protect (cover losses on) the building, but that policy will not replace the renters’ personal possessions, and it will not pay for the renters’ living expenses if they have to live elsewhere while the building is being repaired.

Renters who want to protect themselves against financial hardships related to losses of personal property and/or living expenses when they are the victim of theft or damage to the rented structure need to have a renters insurance policy. One common exception to this is college students living in dorms, if they are still considered to be part of their parents’ household. College students like my son, who are living off campus, most likely need their own renter’s policy. Because policies vary, check with your insurer to be sure.

Renters insurance is sometimes referred to as tenants insurance and it includes three basic types of protection: personal possessions, liability, and additional living expenses. Personal possessions are things like computers, TVs, furniture, pots and pans, towels and bedding, and bicycles, but not cars or motorcycles. Typically, the policy will cover damage to personal possessions due to fire, smoke, lightning, vandalism, theft, explosion, windstorm, and water damage. Notice the coverage does not typically protect against losses due to floods and earthquakes. However, supplemental insurance may be available for those risks.

Basically, there are two types of renter’s insurance policies. One type, “actual cash value,” pays to replace the renter’s possessions minus an amount for depreciation. The other type, “replacement cost,” pays the actual cost of replacing the lost possession without a deduction for depreciation, up to the limit of the policy. A replacement cost policy usually costs about ten percent more than a policy that has actual cash value coverage.

To determine what level of coverage is needed, take a detailed home inventory of all personal possessions and their estimated value. Web-based software to help with that task is available at www.knowyourstuff.org. Having an accurate, up-to-date inventory will also simplify and speed the process of filing a claim.

Renter’s insurance is a relatively low-cost budget item. Premiums average $10-$30 per month, which may actually be less than some of the other monthly charges and fees that many of us commit to.

For more information about liability coverage and additional living expenses, as well as shopping tips, money-saving strategies, and filing a claim, contact the North Dakota State Insurance Department at 701-328-2440, or visit their website, www.nd.gov/ndins

Adapted from “Renters Insurance,” Insurance Information Institute, http://www.unl.edu/smmc/Renters%20Insurance.pdf

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