Published: September 2015
When you think of renters insurance, you may think about the protection it provides for your personal property (electronics, clothes, furniture, etc.) if it is damaged or lost as a result of a covered peril like a theft or fire. However, renters insurance policies also typically include an important protection known as liability coverage.
This portion of a renters insurance policy may help cover legal expenses or the cost of non-auto-related damages to other people or their property if you are found legally responsible, according to the Insurance Information Institute (III).
Suppose you're held liable after a guest falls down your stairs, or your child accidentally throws a football through a neighbor's window. Or imagine you cause a kitchen fire in the home you're renting. Liability coverage may help protect a renter in situations such as these. Liability coverage typically starts at $100,000, says the III, with higher limits available.
Renters who seek additional liability coverage may benefit from a personal umbrella policy (PUP). PUP coverage typically begins after the limits of the underlying policy have been reached, helping provide greater liability protection.
No — and that’s a common misconception, says the III. That’s why many landlords require tenants to show proof of renters insurance before leasing to them, or require them to sign documents indicating they understand their landlord’s insurance policy doesn’t cover tenants.
A landlord’s insurance may help cover structural damage to the building caused by covered perils such as a hailstorm or a fire caused by lightning, says the National Association of Insurance Commissioners. That coverage typically does not extend to the tenant's personal property. A landlord insurance policy also typically provides liability protection to the owner of the home. For example, a policy may help protect a landlord if a tenant is injured and the landlord is found responsible. Meanwhile, renters insurance can help protect a tenant if, for instance, a visitor is injured in the home and the tenant is found legally responsible.
Liability coverage may help protect renters in a number of situations. Talk to a local agent to learn more about liability protection for renters and to choose the coverage that's right for you.