What Renters Insurance Does and Doesn't Cover


Enter your ZIP code to get started

Shield

Free. Simple. Secure.

Banner image
ByMark Fitzpatrick
Edited byVictoria Copans
ByMark Fitzpatrick
Edited byVictoria Copans

Updated: May 22, 2024

Advertising & Editorial Disclosure

Renters insurance safeguards your belongings from theft or damage, covers liabilities in case of injuries or damages you cause and offers temporary housing if a covered event makes your rental uninhabitable. However, it typically excludes certain events, such as bed bug infestations and damage from floods, earthquakes or landslides. Despite these exclusions, the protection offered by renters insurance is often well worth the expense. It may also be required in your lease.

Table of Contents

What Does Renters Insurance Cover?

Renters insurance has three core coverages: personal property, personal liability and loss of use coverage. Personal property coverage safeguards your belongings against theft or damage, while personal liability protects against claims of harm or property damage. Loss of use assists when your rental becomes uninhabitable. These important coverages offer financial protection when the unexpected happens.

Coverage
Definition
Scenario

Personal Property Coverage

Personal property coverage pays to replace or repair your belongings if they gets damaged or stolen. You’ll be covered up to the dollar value of the limit you select when you buy your policy.

A fire in your apartment complex damages your furniture, clothing and electronics. Your policy can cover the costs to repair or replace these items.

Personal Liability Coverage

Personal liability insurance covers your legal exposure. If you’re found responsible for injuries or property damages to others, your renters insurance policy can cover the costs, up to the value of your selected limits.

A guest slips on a wet floor in your apartment and breaks their arm. They decide to sue for medical expenses. Your personal liability coverage can cover these costs.

Loss of Use Coverage

Additional living expenses coverage protects you against extra costs if you’re displaced from your home. You will be covered up to a percentage of your personal property coverage.

A gas leak in your building forces an evacuation, and you need to stay in a hotel for a week. Loss of use coverage can cover your hotel expenses.

Covered Perils in Renters Insurance

 

Renters insurance is considered an open-peril policy, which means it offers comprehensive coverage against a range of events except those specifically excluded.

Some commonly covered perils in renters insurance include:

  • Fire
  • Theft
  • Wind
  • Hail
  • Lightning
  • Smoke damage
  • Snow or ice collapse
  • Falling objects
  • Damage caused by frozen or leaking pipes
  • Vandalism
  • Explosion
  • Items in a storage unit (lesser coverage may apply)

Understanding the perils covered by your renters insurance ensures you're well-prepared for unexpected events. If you’re unsure about your coverage, review your policy details and clarify any uncertainties with your insurer. With the right knowledge, you can have peace of mind, knowing your belongings are safeguarded against these common risks.

What Personal Property Covers

All renters insurance policies include personal property coverage, which protects your possessions, such as your clothes, appliances, decor and more in your apartment, condo or rental unit. If a covered event happens, such as a fire, theft or vandalism, and your items get damaged, your policy will reimburse you for damages up to your limit.

However, not all personal property is covered. Below is a list of items that are often covered by a renters insurance policy:

Personal Property Typically Covered
Personal Property Not Typically Covered

Electronics (e.g., laptops, TVs)

High-value jewelry (beyond a basic limit)

Furniture

Collectibles (e.g., rare stamps, coins)

Clothing

Business equipment (if used for business)

Appliances (e.g., microwaves, fridges)

Pets

Personal items inside your car

Motor vehicles (e.g., cars, motorcycles)

Apart from protecting items in your home, renters insurance also applies to items you carry in your car that aren’t directly attached to the vehicle. This could include your laptop, CDs, clothes and more.

High-value items such as expensive jewelry or art pieces are typically not included in your standard personal property coverage limits, but some providers may offer additional riders that can cover these items at a few extra dollars a month. If you own expensive equipment, ask your provider if they offer a rider to protect it.

bookshelves icon
PERSONAL PROPERTY COVERAGE IN ACTION

Imagine you're an avid photographer with a collection of valuable equipment. An unexpected fire damages your apartment, and your prized cameras are destroyed. With adequate personal property coverage, you can claim and replace your equipment without facing a financial burden. However, if you own a rare, antique camera, it might not be covered under standard limits. For such special items, many insurers provide additional endorsements to ensure you're fully protected.

Actual Cash Value (ACV) vs. Replacement Cost Value (RCV) in Renters Insurance

Renters insurance policies can pay out in two ways: actual cash value (ACV) or replacement cost value (RCV).

  • ACV: Represents the current value of your belongings, deducting depreciation over time.
  • RCV: Reflects the cost to replace your belongings with brand-new items, without considering depreciation.

Most renters insurance policies have replacement cost coverage, or you can add it for a small fee. It may be worth it to have replacement cost coverage, as it will replace your older items with new items. If you have coverage on an actual cash value basis, then you will only get reimbursed for the cost of a used, five-year-old TV, rather than the replacement cost to buy a brand-new one.

Personal Liability and Medical Payments Coverages

Personal liability coverage protects you against the cost of accidents that are your fault, while medical payments coverage will pay for injuries sustained on your property regardless of who is at fault. For medical payments, the base is $1,000 of coverage.

You can usually increase limits for liability insurance for just a few dollars a year, and it might be worth it depending on your lifestyle. For instance, if you tend to have guests over multiple times a week or host parties and get-togethers often, increasing your limits can ensure you won’t have to pay out of pocket in case the worst happens.

hospital icon
PERSONAL LIABILITY & MEDICAL PAYMENTS COVERAGE IN ACTION

Let’s say your dog bites someone while they are in your home. An ambulance takes your guest to the ER, and they end up suing you. Under your renters insurance policy, the personal liability coverage will pay up to the policy limit for legal representation and the settlement or judgment.

Additional Living Expenses Coverage

Additional living expenses (ALE), otherwise known as loss of use in renters insurance, pays for your temporary living expenses if your rented unit is deemed uninhabitable due to a covered event. Typically, additional living expenses can pay for the following expenses:

  • Hotels or alternative rented apartments for temporary stays
  • Increased commuting expenses
  • Elevated food costs due to frequent dining out
  • Boarding fees for pets if not allowed in temporary lodgings
  • Storage fees for personal items
  • Laundry service charges in the absence of on-site facilities
  • Costs for moving trucks to transport belongings to storage or another location
  • Childcare expenses arising from disrupted routines
  • Extra charges for utilities or internet services.

Depending on where you live, it can be costly to rent a hotel room or temporary housing. Check your renters insurance policy to see how much coverage you have for additional living expenses or loss of use, as insurance company limits can vary.

hotel icon
ADDITIONAL LIVING EXPENSES IN ACTION

Imagine you're temporarily displaced from your apartment due to a major water leak. While repairs are underway, you need to stay in a hotel, dine out more frequently, and even board your pet. These costs can quickly add up. With additional living expenses coverage, these unexpected costs are taken care of, ensuring you maintain your standard of living without draining your savings, until you can return home.

Other Events Covered by Renters Insurance

Renters insurance isn't just about protecting your personal belongings; it also offers a range of additional coverages that can be invaluable in specific situations. These coverages address various challenges renters might face, ensuring comprehensive protection beyond the basics.

Some additional coverages you can get, depending on the provider, include:

  • Credit Card and Check Forgery Coverage: This offers protection against financial losses if someone forges a check or illicitly uses your credit or debit card, ensuring your finances remain secure.
  • Perishable Food Reimbursement: In the event of a power failure or mechanical breakdown that results in spoilage of perishable food, this coverage can reimburse you for the loss, minimizing wastage costs.
  • Debris Removal: After a covered claim, there might be debris that needs clearing. This coverage ensures that the costs associated with such removals are taken care of, maintaining the cleanliness and safety of your living space.
  • Additions or Alterations Reimbursement: If you've made modifications or additions to your rental space and they get damaged due to a covered event, this coverage can reimburse you for those alterations, ensuring your investments in the property are protected.
Loading...

What Does Renters Insurance Not Cover?

While renters insurance is comprehensive, it doesn’t cover everything. For instance, damages due to neglect, mold, insects and flooding are typically not covered. Additionally, damage to your roommate’s possessions and your vehicle aren’t covered. Understanding these exclusions can help you prepare adequately and avoid unexpected burdens.

Non-Covered Perils in Renters Insurance

 

Every insurance policy has its boundaries, and renters insurance is no exception. Non-covered perils refer to those events or risks that fall outside the protection of a standard policy. These are the major events that renters insurance does not cover:

  • Floods
  • Sinkholes
  • Earthquakes
  • Bed bugs or other pests
  • Damage to or theft of car
  • Damage to or theft of your roommate's possessions

If you live in a place where floods are common, you can get a separate flood insurance policy to cover your personal property.

Roommate’s Property

Renters insurance is tailored specifically to the individual policyholder. This means that your roommate's property won't automatically be covered under your policy. For instance, if a burglary occurs and both your laptop and your roommate's gaming console are stolen, only your laptop would be covered under your policy. Your roommate would need their own renters insurance to ensure their possessions are safeguarded against potential risks.

Your Vehicle

Renters insurance doesn't cover motor vehicles. Instead, auto insurance provides the necessary protection for vehicular damages or theft. For example, if a tree falls during a storm and damages both your bicycle in the storage room and your car parked outside, your renters insurance might cover the bicycle's repairs, but the car's damages would be a claim for your auto insurance.

How Much Renters Insurance Coverage You Should Buy

Determining how much renters insurance coverage you need involves a thorough examination of your personal belongings, lifestyle and budget. While you can get cheaper renters insurance if you lower your limits, you risk not being fully covered.

How Much Personal Property Coverage Do You Need?

Ensuring the right amount of personal property coverage is crucial for safeguarding your belongings. After all, if a fire damages your apartment and your coverage limit is too low, you might bear the brunt of replacement costs for items like electronics and furniture.

One way to determine the amount of personal property coverage you need is to create a home inventory. There are several ways to do this:

  • Use your smartphone or camera to take photos or videos of each room. Capture clear images of valuable items, serial numbers and any identifying features. Store these digital files in a cloud storage service or an external hard drive for safekeeping.
  • Use a mobile app designed specifically for home inventory. These apps allow you to catalog items, attach photos, note purchase dates and even save digital receipts, making the process streamlined and organized.
  • Use a notebook or computer spreadsheet to list out items room by room. For each item, note its description, purchase date, estimated value and any other relevant details. Pair this written inventory with printed photos of items for a comprehensive record. Store the inventory in a safe place, such as a fireproof or safe deposit box.
Loading...

It’s important to know how much your belongings are worth. If you have $20,000 worth of personal property, ensure you have at least that amount of coverage. You wouldn't want a $10,000 personal property renters insurance policy if a catastrophe could cause $20,000 worth of damage.

If you have high-value items like jewelry or fine art, check with your agent or insurer to see if there is an endorsement or special coverage you can include to properly cover those items. The top renters insurance company for you will have coverage for the items you value most at an affordable rate.

When you compare renters insurance quotes, be sure to check coverage limits, deductible amounts and if there is replacement cost on contents, so you know you’re getting the best value for the price.

How Much Personal Liability Coverage Do You Need?

Determining the right amount of personal liability coverage in renters insurance is key to ensure you're adequately protected. Several factors come into play:

  • Assets: The more assets you have, the higher the coverage you might need to protect them.
  • Risks: If you have potential risks in your rented space, like a dog known for its aggressive breed, you might need more coverage.
  • Location: Living in a litigious area or a city with higher medical costs can influence the amount of coverage you should consider.

Balancing these factors, experts often recommend a baseline of $100,000 in liability coverage. However, for those with significant assets or higher risks, considering coverage of $300,000 or more is advisable.

How to File a Renters Insurance Claim

Knowing how to navigate the claims process is essential when an unexpected event occurs. A structured approach and clear knowledge can simplify the claims process.

1
Prioritize Safety

If the event involves a crime, such as theft or vandalism, report it to the police. For emergencies like fires, ensure everyone's safety and contact emergency services.

2
Document the Damage

Take clear photos or videos of all damaged or stolen items. This visual evidence will support your claim.

3
Review Your Policy

Before filing, understand your coverage limits, deductibles and any specific procedures your insurer requires.

4
Contact Your Insurance Provider

Notify your insurance company about the incident as soon as possible. They'll provide guidance on the next steps and what documentation they require.

5
Complete Claim Forms

Your insurer will provide claim forms. Fill them out accurately and completely, detailing the incident and losses. Remember, honesty is crucial. Any discrepancies can delay or even invalidate your claim.

6
Provide Additional Documentation

Along with the claim form, submit any receipts, photos, police reports or other relevant documents.

7
Facilitate an Adjuster Assessment

An insurance adjuster may visit to assess the damage and determine the claim payout.

8
Receive Compensation

Once your claim is approved, you'll receive compensation based on your policy's terms, either ACV or RCV.

Frequently Asked Questions

MoneyGeek answered the most commonly asked questions about renters insurance to help you determine the right amount of coverage for your renters insurance policy.

What does renters insurance cover?
What does renters insurance not cover?
Is there month-to-month renters insurance?
Is there a difference between renters insurance and tenant liability insurance?
How do renters insurance claim payouts work?

Read More About Renters Insurance

About Mark Fitzpatrick


Mark Fitzpatrick headshot

Mandy Sleight is a writer for MoneyGeek and has been an insurance agent since 2005. As a freelance writer, she uses her vast knowledge of the insurance industry to create informative, engaging and easy-to-understand content for consumers. Her work has been featured in Market Watch, Kiplinger and other major publications


sources