Why would someone want to have renters insurance if their building owner has insurance?

Key Takeaway
Although your landlord is required to have insurance on the building you live in, you might be surprised to learn that you're still not covered if disaster strikes. Renters insurance is important for protecting your personal belongings and safeguarding you (and your wallet) from liability. Building owner’s insurance covers the physical structure of the building, such as the walls, while renters insurance includes coverage for personal belongings and liability protection.

Why would someone want to have renters insurance if their building owner has insurance?

Imagine this: a fire breaks out in your apartment building, and you’re forced to evacuate. Thankfully, no one is hurt, but your belongings are damaged or destroyed. You assume the building owner’s insurance will cover your losses, but you’re in for a rude awakening. The building owner’s policy only covers the structure, not your personal belongings. This is where renters insurance comes into play and, “Why would someone want to have renters insurance if their building owner has insurance?” becomes a crucial question. It’s essential to have your own coverage even if your building owner has insurance.

Key takeaways

  • Renters insurance and building owner’s insurance are both essential, but they protect different aspects of property & cover different expenses.
  • Renters insurance provides comprehensive protection for tenants and their personal possessions in case of theft/damage, accidents or injuries.
  • Get additional coverage to make sure your unique needs are covered & you have complete peace of mind - look into endorsements for high value items & pet liability.

Understanding the difference between building owner's insurance and renters insurance

Why would you need insurance coverage if your landlord already has it? Sure, your landlord is required to carry insurance on the building you live in. But, if you rely solely on your landlord's insurance, you could be left holding the bag when disaster strikes.

Building owner’s insurance covers the physical structure of the building, such as the walls, while renters insurance includes coverage for personal belongings and liability protection.

Building owner's insurance coverage

Building owner’s insurance covers the physical structure of the building, shared spaces, and the landlord’s personal items like appliances and equipment in the rental unit. However, it doesn't cover tenants’ personal possessions or safeguard renters against expenses related to accidents or injuries within their rental unit.

This is why many landlords require renters insurance. It not only protects the landlord from potential liability claims but also ensures that tenants have coverage for their personal property and liability.

Renters insurance coverage

In contrast, renters insurance exists to protect you and your property. It provides coverage for:

  • Your personal property in case of theft or damage
  • Personal liability in situations of accidents or injuries
  • Additional living expenses if you’re forced to move due to a covered incident, such as a fire.

Renters insurance policies often include coverage for personal belongings even when you’re away from home, such as stolen luggage while traveling. This comprehensive protection is what makes renters insurance key for tenants, filling the gaps left by building owner’s insurance.

The importance of personal property coverage

Personal property coverage is one of the most important parts of a renters insurance policy. It helps you replace your stuff in the event of theft, damage, or loss, which keeps you from having to shell out cash in the event of a disaster.

Personal property coverage generally includes items like:

  • Furniture
  • Electronics
  • Clothing
  • Jewelry

However, there may be certain limitations for high-value items. You'll want to double-check your policy to make sure you have enough coverage for everything you own, since the building owner’s insurance won’t cover these items.

Replacing valuables

Renters insurance (AKA tenants insurance) helps you replace valuable items like electronics, furniture, and clothing after a covered incident like theft, fire, or water damage. Renters insurance protects your belongings (and your wallet) when you consider how expensive it would be to replace your stuff in the event of a disaster. You'll want to purchase renters insurance from a reliable insurance company to make sure you have adequate coverage.

It’s important to keep in mind that there may be coverage limits for certain categories of items or high-value items. In these cases, you may need to buy additional endorsements or separate policies to make sure all of your valuables are covered.

Coverage limits

Coverage limits outline the maximum amount an insurance policy will pay to replace your damaged property. These limits are different depending on the policy, and can be adjusted based on your needs. Choosing the right coverage limits can help make sure all of your valuables are covered in the event of an event like a fire or a flood.

If you have high-value items like expensive jewelry or electronics, you may want to purchase additional coverage to make sure these can be replaced. Check your policy regularly, and adjust your coverage limits as needed to account for new purchases or changes in the value of your possessions.

Liability coverage: protecting yourself from legal costs

Accidents can happen, and when they do, liability coverage in your renters insurance policy can be a lifesaver. This type of coverage protects you from legal costs and potential lawsuits from accidents or injuries that occur on your rented property.

Without liability coverage, you could be stuck paying for medical bills, legal fees, and potential settlements if someone is injured on your property. That’s why you need to make sure your renters insurance policy includes adequate liability coverage to protect yourself (and your wallet.)

Personal liability

Personal liability coverage is another important part of your renters insurance policy. It covers legal fees and costs associated with injuries or property damage caused by you or your guests, whether it’s a simple slip and fall accident or damage to a neighbor’s property.

It’s important to check your policy and understand the coverage limits for personal liability. This will make sure that you have enough protection in place to cover potential legal costs and damages in case of an accident or injury on your rented property.

Medical payments

Another key part of your renters insurance is medical payments coverage. This coverage pays for your guests’ medical expenses if they're injured in your rented property, no matter who's at fault. For instance, if your buddy is hurt while visiting your apartment, medical payments coverage will help pay his medical bills, even if you’re not found responsible for the injury.

Including medical payments coverage in your renters insurance policy can help protect your finances, but also your friends and family. It’s a small investment that can make a big difference in the event of an accident or injury.

Additional living expenses: financial support during displacement

If an unfortunate incident, such as a fire or natural disaster, makes your place unlivable, additional living expenses (ALE) coverage can help. This coverage assists in covering the extra costs you run into while living away from your home during its repair or replacement, including hotel bills, temporary housing, and storage fees.

Having ALE coverage as part of your renters insurance policy provides peace of mind, knowing that you won’t be left covering all of these costs if you do have to move out of your place temporarily.

Covered events

Renters insurance policies usually include ALE coverage for various covered events that can make your rental uninhabitable. These events include:

  • Fires
  • Natural disasters like windstorms and hail
  • Water damage from plumbing issues
  • Vandalism or theft

Understanding the specific covered events in your policy is an important piece of making sure you have the right protection in place. Be sure to go over your policy and discuss any concerns or questions with your insurance provider to make sure you understand what events are covered as well as any potential limitations or exclusions.

Calculating ALE

Calculating ALE can be a bit confusing, but it’s essential to understand how it works to ensure you have enough coverage in place. ALE is typically calculated as a percentage of your personal property coverage limit, usually around 20%.

The expenses covered by ALE include:

  • Temporary accommodation costs
  • Laundry costs
  • Storage costs
  • Moving or displacement costs
  • Pet boarding expenses

To be reimbursed for these expenses, be sure to keep receipts and bills to submit to your insurance company.

Customizing renters insurance: endorsements and optional coverages

Each tenant’s situation is different, and your renters insurance policy should mirror that. Tailoring your policy with endorsements and optional coverages makes sure you're covered for any unique risks or high-value items that a standard policy may not cover.

By adding endorsements and optional coverages to your policy, you can make your renters insurance fit your specific needs, ensuring that you’re fully protected and have peace of mind.

High-value items

If you own any pricey items, like jewelry, artwork, or expensive electronics, you might want to think about adding high-value item endorsements to your renters insurance policy. These endorsements offer extra coverage for your valuable belongings, making sure they're covered in case of theft or damage.

Keep in mind that your standard policy may have coverage limits for specific categories of items or individual high-value items. In these cases, high-value item endorsements or separate policies may be necessary to provide the needed coverage.

Pet liability

For tenants with pets, pet liability endorsements are crucial as they shield you from potential expenses and legal complications from pet-related mishaps or injuries. Typically, pet liability coverage pays for medical costs and property damage caused by your pet, along with legal fees if you’re sued because of your pet’s actions.

While some renters insurance policies may include basic pet liability coverage, it’s key to review your policy and consider adding a pet liability endorsement for extra protection, especially if you have a dog breed that may be excluded from standard policies.


Renters insurance protects tenants, even if their building owner has insurance. It provides coverage for personal property, liability, and additional living expenses, making sure renters aren't stuck with the cost of replacing belongings, covering medical bills, or paying for temporary housing due to a covered event. By customizing your policy with endorsements and optional coverages, you can create a policy that covers all of your belongings.

Frequently Asked Questions

What does building owner's insurance cover?

Building owner's insurance covers the structure of the building, common areas, and the landlord's personal property such as appliances.

What does renters insurance cover?

Renters insurance provides peace of mind by covering your personal property, liability, and living expenses, making sure you're protected in case of an unexpected incident.

Are my personal belongings covered if they're stolen or damaged away from home?

Yes, renters insurance typically covers your personal belongings even when they're stolen or damaged away from home.

What is the difference between personal liability coverage and medical payments coverage in renters insurance?

Personal liability coverage protects you from legal costs and damages caused by injuries or property damage due to your actions, whereas medical payments coverage helps cover medical expenses for guests regardless of fault.

How can I customize my renters insurance policy to include coverage for high-value items or pet liability?

Customizing your policy with endorsements and optional coverages can make sure you're fully protected, including your high-value items and pets.

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