Renting a home comes with plenty of advantages. You avoid many of the costs and responsibilities that come with owning a property, and when something breaks that is the landlord’s responsibility, you generally don’t have to worry about fixing it yourself.

But there is one important responsibility that renters sometimes overlook: protecting their own belongings and finances with renters insurance.

It may seem unnecessary when you don’t own the building, but that is exactly where some confusion begins.

Your Landlord’s Insurance Doesn’t Cover Everything

A common misconception is that the landlord’s insurance will take care of the renter’s belongings if something goes wrong. In most cases, that isn’t how it works.

A landlord’s policy generally protects the building itself and the owner’s financial interest in the property. Your furniture, clothing, electronics, appliances you own, and other personal possessions are typically your responsibility.

Imagine a kitchen fire damages the rental home. The landlord may have coverage for repairing the structure, but replacing your television, furniture, clothing, and other personal belongings could be up to you.

Renters insurance can help cover those losses, depending on the policy and the cause of the damage.

It Can Help With More Than Your Belongings

Personal property is only part of the picture. Many renters insurance policies also include liability coverage.

That can become important if a guest is injured in your rental or if you accidentally cause damage to someone else’s property. Depending on the policy, renters insurance may also provide additional living expense coverage if a covered event makes the rental temporarily unlivable.

These details vary by policy, so it is important to understand exactly what is covered, what isn’t, and what deductibles apply.

Why Don’t More Renters Have It?

There are several understandable reasons people skip renters insurance.

“I don’t own enough stuff.”
It is easy to underestimate how much it would cost to replace everything at once. Add up clothing, furniture, kitchen items, electronics, tools, and everyday possessions, and the number can be surprisingly high.

“The landlord has insurance.”
As mentioned above, that coverage generally protects the property owner rather than the renter’s personal belongings.

“Nothing has ever happened to me.”
That’s probably true for many renters. Unfortunately, insurance is designed for the unexpected — fires, certain types of water damage, theft, and other covered losses don’t usually give you advance notice.

“Insurance is too expensive.”
Renters insurance is often relatively inexpensive compared with many other types of insurance, although the actual cost depends on factors such as location, coverage limits, deductible, and insurer.

A Small Cost for Some Valuable Protection

Before choosing a policy, make a simple inventory of your belongings. Take photos, keep receipts for expensive items when possible, and estimate what it would cost to replace your possessions.

Then look closely at the policy rather than choosing based solely on price. Pay attention to coverage limits, deductibles, exclusions, liability protection, and whether personal property is covered for actual cash value or replacement cost.

A rental may not be your property, but what happens inside it can still have a significant financial impact on you.

Renters insurance won’t prevent a pipe from leaking, a fire from starting, or a burglary from occurring. What it can do is provide a financial safety net when something unexpected happens — and that can make a difficult situation considerably easier to manage.