What Does (And Doesn't) Renters Insurance Cover?
Renters insurance covers damage to or theft of personal property, personal liability damages, emergency medical expenses for guests and additional living expenses if you need to temporarily relocate. However, your insurer will not reimburse you for every event related to these coverages, as only certain events qualify for a claim.
We recommend anyone renting a residence to consider purchasing a renters policy as an affordable way to protect against the financial impact of such events.
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What is renters insurance?
Renters insurance protects tenants from the costs of unexpected personal property damage, theft and legal liability. This coverage can be bought by anyone renting an apartment, condo, home or other living space, and is much cheaper than homeowners insurance.
Property protected by renters insurance | Property not protected by renters insurance |
|---|---|
| Furniture | Structure of your apartment/house |
| Clothing | Permanent fixtures (e.g., stove and refrigerator) |
| Appliances and electronics you own | Your car |
| Art and jewelry (subject to coverage limits) | Anything you keep outside your home |
| Sporting goods (e.g., bicycles) | Anything not owned by you (e.g., your roommates or landlord) |
| Any other property you keep in your home |
Providers of rental insurance range from established insurance names, such as State Farm and Allstate, to newcomers like Lemonade.
What does renters insurance cover?
Renters insurance generally provides four types of financial protection:
- Personal property damage: If your property is damaged, renters insurance will cover the cost of the damage up to your policy's limits. Covered "perils," as insurers call the various causes of damage, are specifically named (or not excluded) in your policy such as fire, wind or theft.
- Personal liability: If someone is injured or their property is damaged, and you are blamed for the event, your policy will cover liability costs, including legal costs. A standard policy includes up to $100,000 in liability coverage.
- Additional living expenses: If your rental home becomes uninhabitable as a result of a covered peril, renters insurance will pay for expenses above and beyond your normal living expenses. This is sometimes called loss of use coverage.
- Medical Payments: Limited coverage for medical costs if a guest is injured on your property.
Combined, these coverages provide substantial financial protection against unexpected events, but it's important to understand exactly which situations are covered and which aren't.
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Renters insurance covers personal property against specific perils
Covered perils:
The central feature of renters insurance is coverage of your personal belongings from common sources of unexpected damage and theft. Personal property includes almost everything you own in and outside your rental unit or home.
But not all damage to your property is covered by renters insurance. You are only able to make a claim if the peril that caused the damage is included in your policy. Some of the most common perils not covered by renters insurance include floods and earthquakes.
When damage or theft of your personal property is covered by your renters insurance, you can make a claim for reimbursement up to your policy limits.
For example, if a fire in your apartment destroys all your property—valued at $10,000—your renters insurance company will reimburse you for that amount, minus your deductible.
When buying renters insurance, make sure you select limits that will cover you in the event of a total loss. This will ensure you'll be reimbursed in full in the unfortunate event that a fire or other peril destroys your belongings. Allstate estimates that, for a standard two-room apartment, the value of the average renter's personal property in the U.S. is approximately $30,000, so it's important to make a home inventory and understand the value of what you own.
Renters insurance covers personal liability
Most renters insurance policies include $100,000 of liability protection, covering the costs associated with a lawsuit or damages.
Although any one person is unlikely to have a lawsuit filed against them, the damages can be extensive in the rare instance it happens. Say a visitor trips and injures themselves. They could potentially file a lawsuit against you to cover their medical bills. Or suppose your dog bites a guest: The average cost for a dog bite claim in the U.S. is about $35,000. Personal liability coverage will reimburse you for attorney fees and also any damages a policyholder might be ordered to pay a plaintiff.
One caveat is that insurance companies commonly write into their policies that it will only cover the expenses of an attorney of their choice. The attorneys appointed by insurance companies are generally experienced litigators and do work in favor of their assigned clients.
Renters insurance covers costs when your apartment isn't livable
If your apartment were to become unlivable, your renters insurance will help pay for the increased costs of living out of home through additional living expenses (ALE) coverage. Like personal property coverage, ALE only applies if your dwelling becomes unlivable due to a covered loss—in other words, one of the perils covered by your renters insurance policy. This coverage is called loss of use.
If your apartment in San Francisco or Manhattan burned down, it would be costly to live in a hotel in one of those cities. Eating out every night would add to the bill as well. If you have renters insurance, these expenses are covered up to the limits of your policy. If you live in an expensive city, it may be prudent to increase the limit on this part of your policy.
Renters insurance covers accidental injury costs for visitors
Renters insurance policies include limited medical payments coverage if guests are injured in your residence. This might include their hospital stay, surgical procedures, x-rays, dental expenses and other related costs. Unlike liability coverage, the fault of the injury does not matter, so regardless of cause your guest can be covered under this category up to policy limits, which usually range from $1,000 to $5,000. This coverage extends exclusively to guests, so it won't cover anyone who lives on the property or is listed on your policy.
Other things covered by renters insurance
In addition to the four primary coverages, renters insurance provides supplementary coverages.
- Debris removal: Renters insurance will often help cover some of the costs of debris removal after a covered loss. This is covered under personal property limits.
- Building additions or alterations: If you've funded upgrades or alterations to your rental unit at your own expense, renters insurance may cover damage to it from a covered event. Coverage for building additions will generally be limited to a certain percentage of your personal property coverage limits, such as 15%.
- Credit card and check forgery: Renters insurance may cover losses to the policyholder resulting from the theft and fraudulent use of credit cards or forgery of checks. Coverage is usually up to a limited amount, such as $1,000.
- Food spoilage: If a power failure in your apartment results in refrigerated food loss due to spoilage, renters insurance policies will often cover you under personal property limits.
Optional add-ons
There are a number of add-ons, or endorsements, a renter can add to their policy. These can increase coverage limits or cover perils that otherwise would not be covered, such as earthquakes or floods. Renters insurance policies may offer add-on coverage for more unique risks too, such as a sinkhole endorsement.
If the coverage you need is not available as an endorsement, you might need to purchase a separate policy to ensure you are adequately covered.
What does renters insurance not cover?
Renters insurance does not cover:
The personal property and liability coverage provided by renters insurance won't protect you from all risks. For example, property damage due to floods won't be covered and liability coverage for events related to dangerous dog breeds may also be excluded. Coverage may be limited for high-value items like jewelry. Here are some of the more common coverage exclusions and limits in renters insurance policies.
Renters insurance does not cover property damage for all risks
Renters insurance will rarely — or never — cover damage to your personal property for some specific perils, such as earthquakes, riots and pests.
Bed bugs and pests
Most renters insurance policies will not cover damage costs associated with bed bugs, with limited exceptions. Along with rodents, they are considered a maintenance issue, and not covered under your standard renters policy.
Earthquake and flood damage
Standard renters policies do not cover earthquake or flood damage, though some companies may offer an add-on. If you can't get earthquake or flood coverage through your renters insurance policy, you can buy a separate flood or earthquake policy.
Car theft or damage
Damage or theft of your car will not be covered by your renters policy. You will need a car insurance policy with comprehensive coverage. Belongings inside your car at the time of the theft, however, are covered by renters insurance.
Roommate property
Renters insurance generally doesn't cover damage associated with your roommate's belongings. To be covered, they would have to be listed on the policy.
We don't recommend adding roommates however, unless they are related or a spouse. Adding a non-relative to your policy will split coverage among all those assigned to the policy. So if your policy insured up to $20,000 in damage, you and your roommate would split that coverage for all your possessions.
Renters insurance has lower limits for expensive personal property
Renters insurance personal property coverage limits do not apply equally to high-value items. Jewelry and electronics may be covered under separate sub-limits given the high monetary risk posed by their damage or theft. If you own expensive items, make sure you buy a renters insurance policy in which you can increase sub-limits to ensure you're fully covered.
For example, if you have $15,000 of jewelry and total possessions of $25,000 in value, your coverage may be insufficient, since most standard policies only cover up to $2,000 worth of jewelry. If you want higher limits, you will have to buy more coverage specific to that item.
Common categories | Typical claim limit |
|---|---|
| Money, bank notes and coins | $200 |
| Jewelry and furs | $1,000 - $2,000 |
| Personal computers | $1,000 - $5,000 |
| Other electronics | $1,000 |
| Firearms and ammunition | $2,500 |
| Collections (i.e. baseball cards, comic books and album covers) | $1,000 |
| Silverware and goldware | $2,500 |
| Watercraft and trailers | $1000 - $1,500 |
| Sports equipment and musical instruments | $500 - $2,000 |
| Credit card and forgery | $1,000 |
Renters liability coverage may exclude specific incidents
Although liability insurance covers most costs related to legal liability, there are some important exceptions in the case of pets. Bodily harm caused by a pet, such as a dog bite, may fall under renters liability coverage, but policies can exclude these events in certain circumstances.
Many insurers exclude coverage for certain dog breeds — such as pit bull-type breeds or bully breeds and mixes — and may even deny coverage if you own one of their banned dog breeds. Exotic pets — such as reptiles or monkeys — may not be covered under renters insurance liability. A few progressive companies like State Farm don't consider your dog's breed and won't deny you a policy because of your dog's pedigree.
Finally, like property damage coverage, your renters insurance liability coverage will not extend to your roommate unless they are family.
How do renters insurance companies pay out claims?
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Your insurer will only provide you with coverage if you file a claim—a request to the insurance company for compensation for a covered loss. A renter could make a claim for damage or theft to personal belongings, personal liability coverage or additional living expenses incurred. A property damage claims process will involve several steps.
- Before anything happens, create an inventory: You should create an inventory of all your possessions along with documents that determine their value, like receipts. An inventory of your possessions can include the date you purchased them, any notes, and their value, as shown:
Item | Date purchased | Value (new) | Notes |
|---|---|---|---|
| 2015 Dell Inspiron Laptop | 05/01/2015 | $599 | Gift from mom |
| Apple iPhone 8 64 GB - Black | 11/10/2017 | $649 | Bought at Apple store |
| IKEA KIVIK sofa - Blue | 06/20/2018 | $599 | Receipt in email |
| Zales engagement ring | 01/17/2019 | $3,999 |
- Document the damage: After a qualifying event, such as a fire in your home, document all damaged items to prepare to make a claim.
-
File the claim: You can file your claim in person with your agent, through your company's app, or over the phone. You can either work with the adjuster in person at your home to document the loss, or upload photos and/or videos through the app to provide proof.
Filing a claim can be a long process, but the more information you have readily available for your insurer, the more likely you are to accelerate your claims process and receive timely compensation for your loss.