How does renters insurance work and what does it cover?

Renters insurance is a policy you purchase to protect your personal belongings and provide liability coverage when you rent a home or apartment. You pay a monthly or annual premium, typically between $15 and $30 per month, and in exchange the insurer compensates you if covered losses occur. It generally covers three main areas. Personal property protection pays to repair or replace your belongings if they are stolen, damaged by fire, vandalism, or certain weather events. Liability coverage protects you if someone is injured in your home and sues you, covering legal fees and medical costs. Additional living expenses coverage pays for temporary housing if your rental becomes uninhabitable due to a covered event. It does not cover flood or earthquake damage unless you add separate policies.