What Does Renters Insurance Cover?

Renters insurance is an affordable way to protect your possessions and finances in the event of an unexpected loss. A renters insurance policy covers your personal property, offers liability protection, and pays for additional living expenses if you need to move out during covered repairs.

Here’s what you should know about the different coverage types included in a renters insurance policy, common exclusions, and any additional coverage you might need as you compare renters insurance quotes.

Renters insurance coverage basics

Renters insurance helps protect your belongings, covers your liability, and can help with housing costs if you experience a covered loss. A typical renters insurance policy includes the following components:^[1]

• Personal property coverage pays to replace your personal belongings if a covered event damages or destroys them, up to the policy’s limits.

• Liability coverage helps cover legal costs if you, a family member, or a pet accidentally injures someone or damages their property, up to your liability limits.

• Loss of use coverage pays for additional living expenses, such as hotel and restaurant costs, if you need to relocate while your rental undergoes repairs.

Renters insurance doesn’t cover your home’s structure. Your landlord’s insurance pays to repair the building if a covered event damages it.^[2]

Personal property coverage

Personal property coverage pays to repair or replace your belongings after a covered loss. Your policy typically covers furniture, clothes, linens, electronics, appliances, and kitchen utensils. Certain items, such as expensive jewelry, collectibles, sports equipment, and gaming computers, often have coverage limits and may require an endorsement or floater.^[3]

A renters insurance policy typically covers the following perils:

• Certain types of water damage (such as a burst pipe)

• Explosions

• Fire damage

• Lightning damage

• Smoke damage

• Theft

• Vandalism

• Windstorm damage

You can typically choose between two types of coverage: actual cash value and replacement cost coverage.

• Actual cash value coverage pays to replace your belongings at their depreciated value, up to your policy’s limits.

• Replacement cost coverage pays to repair or replace your belongings at today’s prices, up to your policy limits.

Replacement cost coverage is the more comprehensive coverage, but it costs about 10% more than actual cash value coverage.

Liability coverage

Liability coverage helps pay your legal costs if you, a family member, or a pet injures someone or causes property damage. For example, liability coverage applies if your dog bites a visitor or your child throws a baseball through a neighbor’s window.

Renters liability insurance also includes no-fault medical payments coverage. This coverage allows an injured guest — regardless of fault — to submit medical bills directly to your insurer, helping you avoid a lawsuit. For example, it could apply if a guest tripped on a rug in your home and broke their arm.

Liability coverage limits typically start at $100,000. Depending on the value of your assets, you might want to increase your liability limits to ensure you’re financially protected from a lawsuit.

Loss of use/additional living expenses

Loss of use coverage is also called additional living expenses coverage. This coverage pays for living expenses beyond your typical costs if a covered event damages or destroys your home and you must move out temporarily.

This type of insurance typically covers:

• Additional transportation costs

• Hotel stays

• Restaurant meals

• Temporary rentals

For example, if a fire destroys your apartment, you may need to move out while repairs are underway. Your loss of coverage helps prevent you from having to pay for hotels and expensive restaurant meals out of pocket.

What renters insurance doesn’t cover

While renters insurance covers many scenarios, it doesn’t cover everything. Standard renters insurance policies typically exclude the following:

• 

  Flooding

  Standard renters insurance generally won’t cover flood damage. You’ll need to buy a separate policy from the National Flood Insurance Program (NFIP) or a private insurer for flood coverage to apply.

• 

  Earthquakes

  Renters insurance policies typically exclude earthquakes. If you live in an area prone to seismic activity, you can often buy a separate policy or an endorsement to cover earthquake damage.

• 

  Pest damage

  Insurers consider pest damage a maintenance issue and often won’t cover it. Contact your landlord as soon as you notice rodents, bed bugs, or termites in your home.

• 

  Mold or mildew damage

  Like pest damage, mold and mildew are maintenance issues that your insurer considers preventable. Keep your landlord informed if you notice any moisture damage in your home.

• 

  Your roommates’ belongings

  If you have roommates, they’ll need to buy their own renters insurance to cover their personal items. Check with your insurer if a sibling, spouse, or child is moving in, as coverage may extend to relatives.

• 

  High-value items

  While renters insurance covers jewelry and other valuables, it typically has coverage limits. You may need to buy extra coverage if you have a jewelry collection, valuable art, expensive sports equipment, firearms, or musical instruments.

Optional renters insurance add-ons

You can choose from several renters insurance add-ons to strengthen your coverage. The following are common add-ons to consider:

• Scheduled personal property coverage: Also known as a floater, this provides additional protection for expensive jewelry, electronics, and other high-value items.

• Earthquake coverage: You can buy earthquake insurance either as an endorsement or a stand-alone policy. It helps protect your belongings if seismic activity damages or destroys them.

• Identity theft protection: This coverage reimburses you for any expenses related to restoring your identity after it’s stolen.

• Pet liability: A pet liability add-on can increase your coverage for pet damage or injury claims if your standard renters insurance liability coverage isn’t enough.

• Replacement cost: A replacement cost upgrade will increase your premium, but you’ll receive a higher payout if a covered event destroys your personal belongings. This decreases your out-of-pocket costs when you file a claim.

• Umbrella insurance: An umbrella policy increases your personal liability coverage limits. This type of coverage is a smart purchase if your assets exceed the liability limits of your renters insurance policy.

How renters insurance deductibles and limits work

A renters insurance deductible is the amount you pay out of pocket toward a covered claim. Renters insurance deductibles are generally a set amount, like $500, and apply each time you file a claim.

Increasing your deductible typically lowers your premiums, but you’ll pay more out of pocket when you submit a claim. For example, if you have a $500 deductible and submit a renters insurance claim for $5,000, your insurer will send you a check for $4,500. With a $1,000 deductible, you’d receive $4,000.

You can also adjust your coverage limits to suit your budget. Generally, the higher your coverage limits, the higher your premium. Here’s what to know about coverage limits:

• Personal property coverage can be adjusted to suit your needs. Making a home inventory can help you ensure you have enough personal property coverage to replace your belongings in the event of a total loss.

• Liability coverage generally starts at $100,000, but some experts recommend having at least $300,000.

• Additional living expenses coverage pays the difference between your normal living expenses and the extra costs you incur during home repairs. Many policies limit how long your insurer will pay.

When renters should consider additional coverage

In some instances, you might need to buy add-on coverage from your renters insurance company. The following scenarios illustrate situations where you might need additional coverage:

• You own high-value items, like expensive jewelry, art, or musical instruments.

• You own a breed-restricted pet that your renters insurance won’t cover.

• You live in a flood-prone area and require flood insurance.

• You live in an area prone to earthquakes and want to ensure you have proper protection.

• You work from home and need business property coverage.

Renters insurance coverage FAQs