Renters insurance provides a package of coverages for damages and expenses that can arise when you rent an apartment, house or other type of home. Although renters insurance is generally not required by law, many landlords require it. It’s also often worth getting when it’s not required. Here’s a look at the most important things that renters insurance covers.
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What does renters insurance cover?
Renters insurance provides coverage for your belongings, potential liability claims against you and certain other expenses.
Even though your landlord probably also has insurance, their insurance typically only covers things such as structural damage to their property and potential liability claims against them.
Your landlord’s policy generally does not cover your belongings or your liability for injuries or damage you may accidentally cause to others.
Whether you rent an apartment, condominium unit, house or mobile home, renters insurance typically provides you with coverage for the following:
- Personal property, or contents: Damage, destruction or theft of your personal items from a covered peril such as a fire, falling tree or windstorm. The coverage is offered with a deductible. Sublimits typically apply to valuables such as jewelry.
- Additional living expenses, or loss of use: If a covered peril leaves your home uninhabitable, loss of use covers the portions of temporary rent and living expenses that exceed your normal costs.
- Personal liability: Injuries or property damage you accidentally cause to other people, plus your legal defense if you are sued over a liability claim.
- Guest medical payments: Initial medical treatment for injuries a guest suffers in your rental unit, regardless of fault.
Most companies also offer optional endorsements for specific additional needs you may have.
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How does renters insurance cover my personal property?
Standard renters insurance covers your personal property at actual cash value for theft or damage from covered perils, provided you can document your losses.
Renters insurance also covers your belongings when they are in your car, a storage unit or other locations away from your home, although limitations may apply.
The most common perils covered by renters insurance include:
- Fire
- Lightning
- Explosions
- Windstorms
- Falling objects, including trees or tree limbs
- Theft
- Vandalism
- A sudden, accidental release of water or steam, such as from a burst pipe
How do I document my personal property?
If your belongings are stolen or damaged by a covered peril, you have to provide your insurance company with evidence that you owned them to receive a check. Insurance companies typically require descriptions of the items, along with documentation, such as receipts or photos of the items in your home.
Creating and maintaining a home inventory when you get renters insurance is the best way to make sure you'll be able to document your belongings, in the event of a future loss.
An effective home inventory includes an itemized list of your possessions and their purchase prices, dates and locations, as well as receipts and photos.
Actual cash value vs. replacement cost coverage for renters
If your items are damaged or destroyed, renters insurance typically covers them at their actual cash value, which is their value after depreciation. However, many companies offer upgrades to replacement cost coverage.
With replacement cost coverage, the insurance company pays to replace damaged items with new ones of the same kind and quality.
For example, if the $1,000 sofa you bought five years ago is destroyed in a fire, a standard renters policy may only cover it for $500, based on its actual cash value after depreciation. With replacement cost coverage, the insurance company replaces your sofa with a comparable new one.
Since replacement cost policies require insurance companies to pay out more money for claims than actual cash value policies, they also cost more.
Whether you stick with actual cash value coverage or upgrade to replacement cost coverage, you usually have to pay your deductible before insurance funds kick in.
How does renters insurance cover jewelry and other valuables?
Standard renters insurance policies typically come with sublimits for valuables such as jewelry, unless you pay for additional protection.
For example, many insurance companies cap their coverage for jewelry at $1,500, regardless of your policy’s overall personal property limit. Similar sublimits are also common for furs, fine art, silverware, golf clubs and other high-value items.
However, most insurance companies also offer endorsements that provide more protection for high-value items. You usually need to provide receipts or appraisals to verify the value of these items.
Why is personal liability coverage important in renters insurance?
Personal liability may be the most important coverage in renters insurance, because it covers costs that can quickly escalate.
Most people never intend to hurt anyone else or damage their property, but accidents happen.
The gourmet feast you plan for your friends can turn into a kitchen fire. A game of fetch in the park can turn into hospital visit for an injured bystander.
In addition to medical treatment for someone you injure, renters liability pays for repairs to other people’s property, including your landlord’s property.
Renters liability also covers the cost of your legal defense if someone sues you over a liability claim.
How does renters insurance cover loss of use?
The loss of use coverage in renters insurance, also known as additional living expenses, covers increased living expenses if a covered peril leaves your home temporarily uninhabitable.
This reduces the strain on your budget as you get your life back to normal after a disaster.
The coverage applies primarily to temporary rent, food and transportation costs, but other documented expenses may be eligible. The coverage ends when your home is safe to live in again or you move into a new long-term home.
Insurance companies typically require your temporary rental unit to be comparable to your normal home. However, they generally also cover hotel stays while you search for a temporary home.
Frequently asked questions about renters insurance coverage
Renters insurance covers water damage under limited circumstances. Water damage from a burst pipe or ruptured appliance is generally covered. Damage from water that a covered peril, such as a windstorm or fallen tree, allows to get into your home is also covered.
Renters insurance does not cover flooding, but you can buy flood insurance separately. The government-backed National Flood Insurance Program offers contents coverage, which covers flood damage to your belongings.
Mold coverage in renters insurance is extremely limited. For example, mold damage to your belongings is only covered if the mold is caused by a covered peril, such as if a windstorm or fallen tree allows moisture into your home.
Renters insurance does not cover theft of your car, but it does cover theft of possessions from your car. You typically have to pay your deductible before insurance funds kick in.
Renters insurance covers fire damage to your possessions and a portion of your temporary living expenses if a fire leaves your home uninhabitable during repairs.
The liability coverage in renters insurance generally covers damage your pet causes to other people’s property, including your landlord’s property. Since some companies place limits or exclusions on pet liability, it’s best to check your policy or ask your insurance agent for details. Renters insurance does not cover damage your pet causes to your own property.
The personal property coverage in renters insurance covers stolen packages, but only for amounts that exceed your deductible. If your stolen packages contain $600 worth of merchandise and you have a $500 deductible, you’re eligible for $100 from the insurance company. If you have a $1,000 deductible, you have to cover the entire loss.
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