Shopping for insurance might be the last thing you are thinking about when you finally sign the lease on your dream apartment. While it doesn’t always feel necessary, renters insurance provides you with financial security if you suffer major damages, losses, or liabilities.

Whether you want to know what renters insurance covers or how to build a low-cost policy that fits your needs,

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has created this guide to help you navigate the process of buying renters insurance in Texas.

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What is renters insurance?

Renters insurance provides financial protection for a renter by covering personal property damage and personal liability expenses if others are injured or suffer property damage while in your apartment.

Renters insurance policies usually include the following coverages:

Property (Coverage C): If your belongings are damaged or destroyed by a peril named in your policy, this covers the actual cash value (ACV) or replacement cost of the items.

Loss of use (Coverage D): Also called additional living expenses coverage, this covers temporary hotel stays or other living costs you sustain as a result of damage to your rental.

Personal liability (Coverage E): If someone else is injured or their belongings are damaged on your rental property, legal fees you have to pay are included in your coverage.

Medical payments (Coverage F): This coverage takes care of any medical expenses—up to a set amount—that result from an injury that happens on your rental property.

What does renters insurance cover?

Renters insurance coverage only applies when your belongings are damaged by specific events—called perils—that are named in your policy. Common perils named in Texas renters policies include:

Fire

Lightning

Smoke

Theft or vandalism

Explosions

Impact by a vehicle or aircraft

Falling objects

Frozen or broken plumbing fixtures

Weight of ice or snow

Hail

Depending on your policy, you may have coverage for additional—or fewer—perils than these. Make sure to read your policy carefully!

What does renters insurance not cover?

A renters policy will cover most of your belongings, but there are some exceptions that won’t be included in your coverage—even if they are damaged by a peril listed in your policy. These include:

Items for your job or business: If you run a business or work from home, your renters insurance will not apply to items owned by the business, like your work computer or printing machine.

Valuables: Your expensive jewelry, antiques, or artwork will usually need additional coverage if they are worth more than the maximum item value specified in your policy.

Your car: Renters insurance coverage doesn’t extend to your car, even if it is parked on your rental property when it is damaged. You will need a separate

car insurance

policy that meets the minimum requirements in Texas.

If you want coverage for perils that aren’t listed in a standard renters insurance policy, you can add these coverages—typically at a low cost—to your policy.

Additionally, flooding is a common disaster for those who live near the Gulf Coast. Most Texas renters policies won’t cover flooding, so you may need to purchase additional flood insurance to cover damage to your personal property from this threat.

MORE:

Texas car insurance laws

Key Takeaway Renters insurance provides important coverage not just for your belongings, but also for legal and medical costs in case someone is injured on your rental property.

Is renters insurance required in Texas?

Renters insurance is not required by law in Texas, but your landlord may require you to have renters coverage as part of your lease agreement. Even if it’s not mandatory for you, renters insurance is a low-cost way to protect yourself in case of high-cost disasters down the road.

In Texas, the average renters insurance policy costs $134 annually, which is $25 less than the national average. While this price tag can vary each year, this means that you will pay around $12 a month for coverage that can save you thousands of dollars after a major loss.

How to build a Texas renters insurance policy

To build your renters insurance policy, you’ll start by creating a personal asset inventory of all your furniture, electronics, appliances, and other valuables. It is important to record as much information as you can about each item, including:

Quantity

Purchase date

Purchase price

Brand

Model number

Serial number

Take pictures of each item as you are adding it to your inventory. If you have to submit a claim in the future, having photos of your belongings will simplify the process.

Choose a personal liability limit that fits your needs. Your landlord may specify a required limit—usually between $300,000 and $500,000—but you may be able to reduce the cost of your policy by choosing a lower limit.

Actual cash value vs replacement cost

As you build your renters policy, you can choose coverage for either the actual cash value (ACV) or the replacement cost of items that are damaged or destroyed by a named peril.

ACV coverage will pay you the value of the item at the time of loss, which factors in depreciation over time. While these policies are less expensive, the payout you get after a disaster will likely be smaller, too.

On the other hand, a policy that covers the replacement cost of damaged belongings will pay the full value of the item if you were to buy a new one today. While you will have to pay more up-front, this will entitle you to more money in the event of a disaster.

MORE:

What does actual cash value coverage mean on insurance?

How to find cheap renters and car insurance

Protecting your finances with

renters insurance

won’t cost you very much each year, but you can save even more by bundling your renters and

car insurance

. Many top insurance companies offer between 5% and 25% discounts on each policy when you bundle them.

To find the best deal on your insurance policies, look no further than

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Is renters insurance worth it?

Yes, getting renters insurance is a worthwhile investment. It is fairly inexpensive and protects you from having to pay for property damage, personal liability, or loss of use of your apartment.

What is the average cost of renters insurance in Texas?

On average, Texas renters will pay $134 a year for insurance coverage, which is $25 less than the national average.

You could save 15% or more on renters insurance by bundling

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