Definition
Insurance covering a tenant's belongings, personal liability, and extra living costs if the rental becomes unlivable. The landlord's policy covers the building only, not anything you own inside it.
Why it matters
It is among the cheapest meaningful coverage, typically $15-30 a month, and the liability portion matters as much as the property portion: a guest's injury or a kitchen fire that spreads to neighboring units can otherwise cost tens of thousands.
Example
A kitchen fire forces a tenant out for two months. The policy replaces $12,000 of damaged belongings and pays $4,000 of hotel and food costs above normal living expenses, all on a policy costing roughly $20 a month.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.