What Renters Insurance Actually Covers In New York

Renters insurance is inexpensive and widely skipped, usually on the reasoning that the contents of an apartment are not worth insuring. That reasoning misunderstands what most of the policy is for.

Three separate covers

A standard policy provides cover for personal property, for personal liability, and for additional living expenses if the apartment becomes uninhabitable.

The liability cover is generally the most valuable. It responds if you are held responsible for injury to someone else or damage to their property — including damage to other apartments originating from yours, which in a New York building is the realistic scenario.

The water problem

In dense buildings, water is the common claim. An overflow or a failed appliance in your unit can damage several below.

Note the distinction that catches people: damage from water escaping inside the building is generally covered, while flooding from outside is generally excluded and requires separate cover. The two are not the same peril in insurance terms however similar the damage looks.

Additional living expenses

If a fire or a burst pipe makes the apartment unusable, this cover pays the difference between your normal costs and the cost of living elsewhere. In a city with New York's short-term accommodation prices, this cover can exceed the value of everything you own.

Replacement cost against actual cash value

A replacement cost policy pays what it costs to buy the item new. An actual cash value policy pays the depreciated value, which for a five-year-old television is very little. The premium difference is usually small and the claim difference is not.

What is limited

Standard policies cap categories such as jewellery, watches, cash, and business equipment. If you own something valuable in those categories, it needs to be listed specifically and separately, which usually requires a valuation.

Practical steps

Photograph every room and keep receipts for significant items somewhere outside the apartment. Check whether your landlord requires a minimum liability limit — many New York leases now do.