Renters insurance for an apartment is no different than renters insurance for a single-family home. Apartment renters insurance offers the same coverages for personal property, liability and loss of use. But life in an apartment building is different than that of a single-family home, and more likely to have neighbor-related issues or perils, that might lead to an insurance claim.
Cost of Apartment Renters Insurance
Generally, the cost to insure an apartment is much less than that of a single-family, freestanding home. The reason is that renters insurance does not cover the apartment or freestanding home itself – only a renter’s personal belongings, liability and loss of use expenses. The type of rental property is does not directly impact the price of a policy. In the U.S., the average cost of a renters insurance is $187 per year. That’s much less expensive than the average cost of homeowners insurance ($1,083). A variety of factors will affect your price and we recommend you shop for renters insurance quotes for apartments before choosing a policy.
Rental Insurance Coverages for Apartments
Renters insurance includes three basic coverages that impact the cost of a policy for your apartment. Typically, standard renters insurance policies come with claim limits for each. But anyone can customize their apartment insurance by increasing any limit independently or by adding endorsements or floaters to their policy. If you're wondering whether you need renters insurance for an apartment—we generally recommend it—you can see what these three basic coverages provide you with below.
Personal property coverage: Personal property coverages pays to repair or replace a renter’s belongings up to a defined limit of a policy. Standard rental insurance policies some with at least $15,000 in coverage but policies holders have the option to purchase more coverage and increase their claim limit. Remember that earthquakes, flooding and sinkholes are usually excluded from personal property coverage, regardless of the type of rental someone inhabits. This covers belongings inside of your apartment, and outside - including in your car, or on your body while you're traveling.
Many renters don't feel a need to buy insurance because they don’t think their belongings are valuable enough to warrant the cost of a policy, but the truth is almost all renters underestimate the value of their personal property. If you're renting a small studio apartment, you may not own as many things as someone living in a 5,000-square-foot home. However, the few items you possess may be worth a considerable amount of money. For example, you might own a television, computer, tablet, some furnishings and kitchen utensils – all which don’t take up much room but can be expensive to replace.
Apartment personal liability protection: Damages to someone else or their property that a renter might be liable for could be financially crippling, which is why this coverage is so important. Personal liability protection pays for damages (including medical bills) to another person or to repair or replace their personal property. Most renters insurance policies, whether you’re renting an apartment or a single-family home, include at least $100,000 in liability protection.
Loss of use of the apartment: Although unlikely, there might be a circumstance when an authority might declare a renter’s apartment uninhabitable. But renters still have to go to work, eat and continue living their lives until they can return home or find a new permanent residence, which is where loss of use coverage comes in handy. It reimburses policyholders for expenses like hotel stays, dining out and alternative transportation up to the limit of a policy.
Perils and Problems Apartment Renters Face
Even though rented apartments and single-family homes both should have renters insurance, they don’t necessarily face all of the same perils. There are certainly claim-warranting situations that occur more frequently in an apartment than another type of rental. We’ve detailed some of those below.
Damage to your belongings caused by neighboring tenants: Water or fire damage from another apartment is something that happens in apartment buildings. No matter how careful a tenant might be, they are (on some level) at the mercy of their neighbors who might surround their unit on all sides. A bathtub might overflow in the apartment above a policyholder's, leak into their apartment, and ruin their belongings. Smoke or flames from a candle in an adjacent apartment might do the same. Either circumstance could be grounds for filing a renters insurance claim. A renter living in a single-family home might not have to worry about their neighbors as much when it comes to their bathtubs flooding or fire hazards.
Liability claims: Liability claims are something any renter might have to file, whether they call an apartment or a freestanding house their home. The best example of this is a liability claim related to a dog bite. Any damage or medical expenses related to a policyholder’s dog are covered by renters insurance liability. A dog probably isn’t more or less likely to bite someone if it lives in an apartment than if it lives anywhere else. Even if an applicable event doesn't happen in your apartment, personal liability protection often follows policyholders wherever they go. If your dog bites someone on its daily walk in your neighborhood, leading to a lawsuit, legal costs may be covered by your renters insurance liability.
Higher likelihood of a loss of use claim: Apartment renters are probably more likely to use loss of use coverage than anyone. Generally, apartments are adjacent to at least one other unit, making them more susceptible to major problems that could result in them having to temporarily leave their home. Again, no matter how careful an apartment renter might be, their unit is at the mercy of whatever happens on the other side of a wall.
Freestanding homes might have a driveway, a whole yard, or more between them and their nearest neighbor. That buffer would insulate a renter from having to file claims for their personal property or loss of use. This is especially the case for apartments that share a single common entrance with many other tenants. For example, say a fire, flood or some other peril prevents an apartment building's tenants from safely entering or leaving. That circumstance could potentially affect a large number of renters and warrant a loss of use claim, even though their individual units remain unaffected.
More frequent use of home-sharing services: The risks associated with home-sharing services, such as Airbnb, are not exclusive to tenants of apartments (there any also many homes listed on home-sharing service websites). However, they are more commonly used in urban areas with more travelers. The good news is that renters insurance does protect tenants from certain damages related to temporary guests.
Unlikely Apartment Rental Insurance Claims
While apartments share most of the same risks with freestanding rental homes, there are some exceptions. Here are some examples of potential claims that apartment renters don’t have to worry about making:
Pool and garden liabilities: Renting a single-family home might come with some perks, like a swimming pool or a garden. But those perks can also be liabilities. For example, if someone rents a home with a private pool, they could be found liable for any damages related to it, whether someone had permission to use it or not. Pools are considered an “attractive nuisance” and children might be tempted to use them -- that’s why most local laws require pools to be fenced in.
When it comes to a garden or landscaping, renters are sometimes responsible for their upkeep and responsible for informing visitors of any potential hazards related to them. For example, if there is a hole in the yard where a bush is waiting to be planted, renters are obligated to do their best to inform others of that hazard, otherwise they could be considered negligent.
Sump pumps: Apartment tenants don’t need to worry about a sump pump. If you rent a freestanding home with a basement, a sump pump is something you are responsible for maintaining. The devices remove excess water from the sump basin of a home to prevent its basement from flooding. Most renters insurance policies won’t cover water damage related to this, but tenants should add an endorsement for sewer and drain back up to their policy to protect against these damages.