Hitting the rental market? Five insurance must-knows

For a lot of us, COVID-19 has meant rethinking our living arrangements – whether that's moving in with a roommate to share expenses or swapping a city studio for a bigger place in the suburbs (thanks, WFH!). It also means rethinking your insurance.

Here are five questions we hear often from people new to the rental scene or changing the way they rent:

1) Why do I need renter insurance when my landlord already has insurance?

Your landlord's insurance protects their interest in the building, not you or your belongings. For that, you need your own policy which, for most renters, costs about $16 a month when paired with auto insurance through the same company.

Besides protecting your belongings against risks like fire and theft, renter insurance covers loss of use and additional living expenses (if your home is damaged in a covered loss), personal liability lawsuits and legal defense fees (think dog bites or slip-and-fall injuries) and car prowls (twice as likely to happen to apartment dwellers as homeowners).

2) If my belongings were destroyed, wouldn't the person responsible have to pay?

Fewer than 60% of renters have insurance, meaning the person living on the other side of the wall may not be able to reimburse you for significant damage they cause. Renters are at higher risk of having a loss than someone who owns a home. For example, you can't control how careful your neighbors are about things like fire prevention or making sure their bathtub doesn't overflow and flood your place downstairs. (Renter insurance also protects you in a lawsuit if you're the person with the overflowing tub!)

You're also more likely to suffer a car break-in as a renter. If personal belongings are stolen out of your car, your car insurance can't cover it (it's only good for equipment attached to the car). Your renter insurance would pay to replace your stolen property.

3) Can I split my renter insurance with a roommate?

Probably not. Most insurance companies, including PEMCO, exclude roommates from renter policies. Instead, they write individual policies for each person. That's because roommate arrangements tend to be fluid, changing as job and educational opportunities arise. If one roommate suddenly moves out, the remaining tenant likely would get stuck with the combined bill. In addition, you shouldn't be responsible for keeping track of your roommate's belongings or any liability concerns they may present. It's also hard to figure out who should pay for what when splitting the bill. (Is your stuff worth more? Your roommate's?)

Unmarried couples in a relationship are the exception. Theirs is a much more stable situation in which people are likely to acquire property together, and it makes sense to insure it together.

4)      If I already have renter insurance, can I just take the same policy with me?

You probably can if you're not replacing your furniture or combining households with a significant other. Renter insurance is much less complicated than homeowners insurance, since it doesn't cover the structure. The price could change slightly, up or down. That's because part of your rate is based on location (the same is true for your car), but the change probably won't be dramatic. It's best to let us know your plans before you move. That way, you'll be protected from the very first day in your new place.

5)     My new landlord wants to see proof that I have renter insurance. Is that legal?

Yes, and it's not uncommon. They're interested because renter insurance helps you if you're held accountable if someone is hurt in your home or if something of theirs is damaged. PEMCO Customer Service can email or fax proof of insurance or add your landlord as an "additional interest" on your policy. When they're added, they'll automatically receive confirmation when your policy renews, so you won't have to hassle with it every time you renew your lease. The notice they get only contains information that pertains to them, like liability limits and policy start and end dates. Your personal information is protected.

If you're getting ready for a change of scenery, be sure to check out "How to negotiate a great deal on an apartment" (don't miss the safety section) and see "How to score a new apartment – even with COVID-battered credit."

To get or update renter coverage, log in to your pemco.com account, talk with your local PEMCO agent or call 1-800-GO-PEMCO.