Understanding Renters Insurance

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Understand the basics of renters insurance.

Whether you live in a dorm, home, an apartment or on base or post, you likely have personal property that’s valuable to you. What if your belongings are stolen? How about if a guest trips and injures himself at your home? Or, say a pipe bursts, floods your apartment and you need to stay in a hotel while repairs are made? Without the right insurance, you may have to pay more out of pocket to repair or replace your stuff. You may also be financially liable for someone’s medical bills or have to pay a large hotel bill.


Renters insurance can help protect your personal property and cover you financially if you’re found liable for a person’s injuries or damage to property. It can also help pay for your temporary living expenses if your home becomes uninhabitable.


Prepare your finances for the unexpected.

Financial security means having the right pieces of your financial puzzle in place. By paying as little as $10 to $15 per month, renters insurance is an affordable way to protect your stuff and your financial well-being if something goes wrong.1


More than 50% of the Americans who rent are under the age of 30.2 Many are just starting to save money for their futures and learning how to manage their budgets. As a whole, most Americans don’t have an emergency fund and struggle to pay for unexpected expenses.3


According to the Insurance Information Institute, 46% of renters nationwide spend nearly a third of their income just on rent and utilities. Replacing a stolen computer or TV may be tough for someone who doesn’t have a healthy emergency fund or renters insurance. 


Understand coverage terms and what they mean.

Let’s look under the hood of a renters insurance policy, so you can get familiar with some common coverage terms.


Covered Perils: A peril is what causes your loss or damage and causes you to file a claim. So, an event like fire or theft. Your renters policy will spell out which perils are covered and which aren’t.


Covered Items: These are your belongings with some exceptions. Renters insurance typically covers things like electronics, computers, clothing and jewelry. However, there may be limitations on coverage amounts for specific items. For items like jewelry, antiques and collectibles, you may want to consider additional insurance.


Deductible: Your deductible is the amount you owe before your policy will pay to repair or replace your stuff. Carrying a higher deductible can reduce your monthly premium, but you’ll pay more when you file a claim. It’s important to save for emergencies, so you can afford to pay your deductible if you need to file a claim.


Replacement Cost Coverage vs. Actual Cash Value: That TV that you bought five years ago isn’t worth the same amount of money today. With replacement cost coverage, your policy will help you replace that TV with one of equal value. Actual cash value pays the depreciated value of your TV.


Let’s say you file a claim for a stolen computer that you bought several years ago. A new comparable computer to your stolen one costs $2,000. With replacement cost coverage, your policy would cover the cost to replace the computer with a new one, minus your deductible.  


Actual cash value would only pay what your computer is worth today. So, let’s say after depreciation, that computer you bought years ago is now worth $1,000. With actual cash value coverage, your policy would only pay for the depreciated value of the computer minus your deductible


Liability Coverage: This type of coverage protects you financially if you’re liable for something that causes bodily injury to someone else or damages their stuff. Landlords or rental companies may require you to carry a minimum amount of liability coverage with your renters insurance policy. A good rule to thumb is to buy coverage that’s equal to your net worth, which is considered all your assets minus your total debt.



Get renters insurance while you’re deployed.

A USAA renters insurance policy was designed with our military members in mind and covers military uniforms and gear.4 We also offer worldwide coverage5 for your personal property if you’re deployed, and even protect your items while they’re in storage.6 Additionally, we offer coverage limits of up to $10,000 for property damage caused by war7, and we waive your deductibles if your military equipment is damaged, lost or stolen while you’re on active or active reserve duty.


Read the fine print.

Finally, when you’re shopping for your renters insurance policy, be sure to read the terms and conditions or talk to a representative. You’ll want to know if there are any coverage exclusions or limitations before you buy your policy.


1According to national data for renters policy premiums provided by the Insurance Information Institute.

2Insurance Information Institute, June 2020

3Bankrate Survey, 2019 - https://www.bankrate.com/banking/savings/financial-security-january-2019/










4For loss due to a covered peril of military uniforms or equipment owned by you and when the loss occurs while you are on active or reserve duty, no deductible will be applied.


5For coverage to apply, property must be under a bill of lading or other professional shipping document before being shipped. Policy must be in force before goods are placed in transit. Breaking, and marring & scratching are excluded.


6Availability of renters insurance to residents of another country is limited to qualified members.


7Stateside based coverage limit is lesser of $10,000 or personal property limit coverage that is in excess over coverage provided by the government. USAA Limited (Foreign based policy) provides coverage in excess over what is provided by the government.

Membership eligibility and product restrictions apply and are subject to change.


Renters insurance provided by United Services Automobile Association, USAA Casualty Insurance Company, USAA General Indemnity Company, Garrison Property and Casualty Insurance Company, based San Antonio, TX; USAA Limited (UK) and USAA S.A. (Europe), and is available only to persons eligible for P&C group membership. Each company has sole financial responsibility for its own products.


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