Renters Insurance in Minnesota: The 5 Things Most People Miss

Common Renters Insurance Oversights in Minnesota

Renters insurance is often overlooked or misunderstood. Here are five critical things many Minnesota renters miss when evaluating their coverage needs.

1. Liability Coverage Importance

Many renters focus on personal property but underestimate liability needs.

Why It Matters

• Guest injuries: If someone is injured in your rental, you could be liable
• Accidental damage: You damage the building or neighbor's property
• Dog bites: Your dog injures someone
• High costs: Liability claims can be expensive

Recommendation

Carry at least $300,000 in liability coverage, consider $500,000 or more. It's relatively inexpensive to increase limits.

2. Actual Cash Value vs Replacement Cost

Many renters don't understand the difference, which can cost thousands in a claim.

Actual Cash Value (ACV)

• Pays replacement cost minus depreciation
• Older items receive much less
• Example: 5-year-old laptop worth $1,200 new might get $300

Replacement Cost

• Pays to replace items at current prices
• No depreciation deduction
• Costs more but provides better protection

The Bottom Line

Replacement cost coverage is usually worth the extra cost (often $20-$50 more per year).

3. Coverage Limits May Be Too Low

Standard policies often have limits that may not cover all your belongings.

Personal Property Limits

• Typical default: $20,000-$30,000
• May be insufficient: If you have electronics, furniture, clothing, etc.
• Solution: Inventory your belongings and increase limits if needed

Special Limits

Policies have sub-limits for certain items:

• Jewelry: Often $1,000-$2,500 total
• Electronics: May have limits
• Firearms: Often limited
• Silverware/gold: Limited amounts

Solution

Schedule valuable items separately or increase overall limits.

4. Roommate Coverage Gaps

Sharing a rental creates coverage complexities many don't understand.

The Problem

• Separate policies needed: Each roommate typically needs their own policy
• Shared items: Who owns what? Coverage can be unclear
• Liability: If roommate causes damage, coverage may not apply

Solutions

• Each roommate gets their own policy
• Clearly document who owns shared items
• Understand how liability works with roommates
• Consider joint policy if appropriate (less common)

5. Additional Living Expenses (ALE)

Many renters don't realize they have coverage if their rental becomes uninhabitable.

What ALE Covers

If your rental is damaged and you can't live there:

• Temporary housing: Hotel, apartment, etc.
• Meals: Additional food costs
• Storage: Storing belongings
• Laundry: Additional laundry costs

Typical Limits

• Often 20-40% of personal property coverage
• Example: $30,000 personal property = $6,000-$12,000 ALE
• May have time limits (often 12-24 months)

Why It Matters

If your building has a fire or major damage, you need a place to live while it's repaired.

Additional Considerations

Off-Premises Coverage

Most policies cover belongings even when away from home:

• Travel: Items stolen while traveling
• Storage units: Usually covered
• Car: Items stolen from your car

Water Backup

Like homeowners, consider water backup coverage if your rental has a basement or lower level.

Flood Insurance

Renters insurance doesn't cover floods. If you're in a flood zone, consider separate flood insurance.

Questions to Ask Your Agent

• What's my liability coverage limit?
• Do I have replacement cost or actual cash value?
• Are my personal property limits adequate?
• What are the sub-limits for jewelry, electronics, etc.?
• How does coverage work with roommates?
• What's my additional living expense limit?
• Are there any exclusions I should know about?

The Bottom Line

Renters insurance is essential and relatively affordable, but understanding these five common oversights helps ensure you have adequate protection. Don't just buy the cheapest policy—make sure it actually protects you.

If you're renting in Minnesota and want to ensure you have appropriate renters insurance coverage, consider speaking with a licensed insurance professional who can help you evaluate your needs and avoid these common gaps.