Renter's insurance is a type of insurance that offers apartment dwellers some financial compensation if their personal effects are destroyed or lost because the apartment is damaged or destroyed by a natural disaster or other calamity. One of the more important features, provided by some renter's insurance policies, is payment of some or all of the cost of temporary lodging.

Management companies generally encourage their tenants to purchase renter's insurance. As with any type of insurance, coverage of everything and every contingency would be prohibitively expensive. Insurance companies offering less expensive policies may decline coverage of jewelry and other items. Few of us maintain inventory lists and purchase receipts in a location separate from our dwelling, and in some cases, inventory lists and purchase receipts may be required to collect adequate compensation. Photographs and documents may have great personal value but are not suitable for insurance coverage.

Some tenants may have valid need for renter's insurance, but not all. All prospective purchasers should read the exclusions and limits in the policy.