2. Understand what tenant insurance covers

Tenant insurance is like other kinds of insurance. You pay an insurer a certain amount every month or year and in exchange, they will usually cover costs if there is an accident or damage. Your insurance agreement explains what the insurer will pay for and how much they will pay.

Tenant insurance often covers

• liability
• living expenses
• your belongings

Liability

Liability coverage protects you if you accidentally cause damage to your landlord's property or another tenant's property. For example, insurance can pay for repairs if there's a fire because you accidentally left the stove on.

Liability coverage also helps protect you if someone sues you because they got injured at your place.

Living expenses

If you can't live at your place because it's been damaged, and you have coverage for living expenses, your insurer might pay for you to stay somewhere else. For example, if there's a fire, your insurance could cover the cost of meals and staying at a hotel until you can move back into your place.

Contents insurance

Contents insurance protects your belongings from common risks like theft, fire, or floods. If something happens, your insurance helps you pay to repair damaged belongings or buy new ones.

It's a good idea to keep information about any expensive items you own. For example, you might want to keep information about furniture, phones, or televisions you own. Keep purchase receipts in a safe place and take photos or videos of your items. Your insurance company will probably want evidence that you owned something before they give you money to repair or replace it.

Landlord’s insurance

If there is damage to the building or if your landlord causes an injury to a person on the property, your landlord's insurance should cover the costs.

Your landlord's insurance usually doesn't cover damage to your personal property, like your furniture, clothing, or electronics. But your landlord could be responsible if it's their fault your things got damaged while on the property. For example, your landlord's insurance might cover water damage to your things because your landlord did not fix a plumbing problem or leaky roof.

But if it wasn't your landlord's fault, you and your own insurer will be responsible for the costs of the damage to your things.

For example, if there is a severe storm, your landlord's insurance will pay for your landlord's repairs to the building but it won't pay to replace your damaged belongings.