Renter's insurance is a common and often wise investment. It offers coverage in the case of theft, damage, or other disasters for the possessions you have within your rental. But what happens when you suddenly need to relocate? Is there anything that Renter's insurance can do for you in these scenarios? Does renters insurance cover early lease termination? The short answer is that it depends on why you need to get out of your lease in the first place. It is unlikely that you are breaking the lease without an immediate cause that you are covered for any costs you may incur. For certain events, though, you may be covered under Additional Living Expenses. These expenses could be what you are being forced to spend on top of the rent you already pay, and your Renter's insurance could cover them.
What is ALE?
ALE are paid expenses when you need to move out of your apartment for an unforeseen reason that is specifically covered by your insurance. This doesn't mean that insurance will cover the actual breaking of your lease. Still, it does mean that if you had to move out because of mold, or in the case of some other emergency, you could get reimbursement for the additional living costs that you have incurred. You should check with your insurer and with your policy first to make sure that you have ALE options available! If you do, this means that Renter's insurance does cover early lease termination in some sense, at least in the actual amount that it will cost you. There may be limits to how much ALE is available or stipulations that must be fulfilled for it to be used, though. Hence, it is always best practice to read your policy carefully.
What about after I move?
Renter’s insurance is often thought to be tied to the location it covers, rather than the person who purchased it. This is mostly true, but what happens if you need to move into another rental? After you have left the rental unit you are in now, you should also consider moving your renter’s insurance. Most insurers allow this, but it’s wise to contact your specific insurer to ensure that the area you are moving into is still within their zone of coverage. So long as it is, you can carry that insurance with you, and most insurers will even give you a proof of insurance should your new landlord require it! It’s even possible that if you are relocating due to a cause that is covered under ALE. You decide to stay in that location indefinitely, that you transfer your renter’s insurance over to that new location.
Do I need to cancel renters insurance
Separately, you may be wondering if you need to cancel your insurance and under what circumstances. As mentioned above, if you are moving to a zone where your insurance cannot be transferred, you may cancel your insurance. Of course, it goes without saying that if you are going to move into a home that you own, renter’s insurance should be traded out for homeowner’s insurance, and you would need to cancel. Canceling is as easy as reaching out to your provider and making sure that they know your decision. You do need to reach out to cancel, though. Otherwise, you risk paying premiums for a property that you no longer live in! It’s always smart to make sure that your coverage extends until the date you plan on vacating the unit to ensure against any unfortunate losses of coverage during a potential event!