What Does Renters Insurance Cover?
Renters Insurance: Get answers to frequently asked questions about what is and isn't covered.
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Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
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Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
Renters insurance coverage is a policy for folks who are currently renting their home, condo, townhouse, or apartment. It can help protect against theft, damage to property from certain natural disasters, water backup damage, and your personal liability if someone gets injured. Knowing what renters insurance covers is key to making the most out of your policy. What is covered by renters insurance tends to be consistent from policy to policy and ranges from various disasters that could damage or destroy your personal property to incidents involving third parties that could potentially end in a lawsuit.
Many landlords actually require prospective tenants to get a renters insurance policy before they're allowed to sign a lease. Having renters insurance helps protect not only you but also any guests who visit. An independent insurance agent can help you find the right type of renters insurance for you. But for starters, here's a breakdown of renters insurance and what it covers.
What Is Renters Insurance?
You may have asked yourself, what does renters insurance do? Renters insurance provides coverage for lost, damaged, or stolen personal possessions. It also provides coverage for injuries to another person that might occur in your rented home, condo, townhouse or apartment.
For example, if someone gets hurt in your apartment, the insurance company would pay the costs associated with the injury up to the limits of the policy.
To learn more about renters insurance and the amount of coverage that makes sense for you, talk to an independent insurance agent in our network. A local member agent can provide free renters insurance quotes from several different insurance carriers and help you find the right coverage at an affordable price.
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What Does Renters Insurance Cover?
Renters insurance provides financial reimbursement to cover a tenant’s lost or damaged possessions as a result of fire, theft or vandalism. It also covers a tenant’s liability in the event that a visitor is injured on the premises.
Whether the renters insurance or the landlord insurance pays for the costs associated with the injury will depend on the circumstances of the incident, the location on the premises where the injury occurs, and who is at fault.
Renters insurance can also provide compensation for alternative living arrangements if your rented home, condo, townhouse or apartment becomes uninhabitable due to storm damage or a fire. On a basic level, renters insurance will cover your contents and give you liability coverage. However, you can customize your policy to include many of the following additional types of coverage options. Here are the specific coverages found in many renters insurance policies.
Basic Renters Insurance Coverages
So what does renters insurance cover? Well, you'll most likely find the following coverages in many standard renters insurance policies:
- Personal property: Your personal property, otherwise referred to as "contents," including your furniture, clothing, electronics, etc., is protected against various perils that may cause damage or destruction, as well as from theft.
- Personal liability: Your personal liability is covered if a third party gets injured or sustains property damage, so if you end up with a lawsuit on your hands, your attorney, court, and other legal fees should be paid by your policy.
- Additional living expenses: Also called "loss of use" coverage, if your home becomes temporarily uninhabitable due to a major disaster, your renters insurance should cover the costs associated with staying somewhere else, like a hotel, while repairs are completed.
- Medical payments: If someone gets injured on your property, this coverage can help pay for their medical treatment or even funeral costs.
What's covered by renters insurance can vary slightly by the policy. Be sure to work with an independent insurance agent to get set up with the renters insurance coverage you really need.
Renters Insurance for Personal Property Damage
Your personal property is protected against many types of disasters by renters insurance, including:
- Fire
- Smoke
- Lightning
- Vandalism
- Theft
- Explosion
- Frozen pipes
- Weight of snow or ice
- Fallen objects
- Aircraft damage
- Riot or civil commotion damage
- Windstorms
- Certain types of water damage
Your personal property should be covered up to your policy's limits after a covered disaster occurs. If a fire completely destroys all of your personal property and its value is less than your policy's limit, your renters insurance should cover the replacement of all your property. But first, you'd have to pay your deductible amount out of pocket.
Your personal property is likely to even be covered if you're away from home. So if you take a vacation and your bag containing your clothes gets stolen, you should have coverage for this property up to your policy's limit. You'd have to pay your deductible, though, so filing a claim might not be worth it unless the value of your stolen property exceeded this amount.
Renters Insurance for Personal Liability
Standard renters insurance policies often include up to $100,000 in coverage for personal liability. If a third party like a friend, relative, worker, delivery person, or other guest got injured on your property or got their property damaged while visiting your home, they could sue you. Your personal liability coverage, however, would help pay for your legal expenses, including an attorney, court fees, and settlement fees.
If you have a dog and it bites one of your guests, you might end up with a lawsuit on your hands. Dog bite lawsuits can cost tens of thousands of dollars to settle, so the liability coverage provided by renters insurance is crucial. Also, if you live in a single-family rented home and a third party slips on your icy stairs and injures themselves, your renters insurance's liability coverage could protect you in case of a lawsuit for this incident.
Renters Insurance for Additional Living Expenses & Loss of Use
Loss of use, or additional living expenses coverage, is provided when you can't make regular use of your home due to a disaster. So if a major disaster like a fire damaged your home and personal property badly enough that you couldn't live there for a while, your loss of use coverage should reimburse you for additional expenses such as hotel stays while you wait on repairs to be completed. If you had other additional expenses due to not living at home, such as needing to eat takeout meals or use laundry services, these additional costs should also be covered.
Renters Insurance for Medical Payments
If a guest or other third party gets injured on your property, you may not only need liability coverage for a possible lawsuit, but you also may need to help pay for medical treatment, an ambulance, a hospital stay, or even a funeral. Renters insurance can help reimburse for these costs. So if a friend or other guest is at your home and trips on an uneven stair or burns their hand in your kitchen, the medical payments section of your renters insurance could help pay for their doctor visits and related bills.
Other Items Covered by Renters Insurance
There are other things that renters insurance often covers, including:
- Debris removal: If a tree falls on your property and leaves lots of twigs and leaves behind after it's removed, your renters insurance might be able to cover the removal of the debris, as well.
- Building additions/alterations: If you've made additions or alterations to your rented property on your own dollar, your renters insurance may provide a limited amount of coverage (e.g., often up to 15%) for disasters that impact this portion of your property.
- Credit card & check forgery: Your renters insurance may provide limited coverage, up to $1,000 or so, for incidents of being a credit card or check forgery victim.
- Food spoilage: If your food spoils due to an extended power outage or other disaster, your renters insurance may be able to help you replace your food items, minus the cost of your deductible.
- Other people’s property: If you're storing borrowed property at your home, such as a record collection or something else on loan from a friend, and it gets destroyed in a fire, your renters insurance should pay to replace this property as well as your own.
- Items stored elsewhere: Your renters insurance may provide limited coverage for personal property in a storage unit or belongings kept in your car if they get stolen or damaged.
Double-check your specific renters insurance policy with your independent insurance agent to be sure of exactly what's covered.
Optional Renters Insurance Coverage Add-Ons
Beyond a basic renters insurance policy, you can choose to purchase coverage add-ons that can further protect you. These add-ons can include:
- Scheduled personal property: Scheduling personal property through this type of endorsement allows you to increase coverage for valuable items like jewelry or pricey electronics.
- Water backup: If a sump pump fails or a toilet or tub overflows, you might need to rely on a water backup endorsement added to your renters insurance to protect your personal property from resulting damage.
- Replacement cost coverage: This endorsement helps you to receive the full original value for the property that must be replaced rather than receiving reimbursement for the amount that factors into the depreciation of your items.
- At-home business endorsement: If you run a business out of your rented home, this endorsement can help protect your business's property from theft, fire damage, and more.
- Identity theft: This endorsement can help you receive reimbursement for incidents of identity theft that cause financial damage to you.
- Pet damage liability: This endorsement can help ensure you'll receive your security deposit back after damage your pets cause to your rented property's structure, such as through biting, clawing, urinating, etc.
- Earthquakes: Typically excluded from standard renters insurance coverage, earthquake endorsements can sometimes be added to your policy to help you receive reimbursement for items damaged by these natural disasters.
- Floods: Also typically excluded from standard renters insurance coverage, flood endorsements can sometimes be added to your policy to help you receive reimbursement for items damaged by these natural disasters.
Talk to your independent insurance agent about adding these endorsements to your renters policy today to help greatly extend your coverage.
What Renters Insurance Doesn’t Cover
So what does renters insurance not cover? Quite a few disasters aren't covered by standard renters insurance policies, including:
- Earth movement and flooding: Unless you add endorsements to your policy, natural incidents of flooding, earthquakes, and sinkholes are likely to be excluded by your renters insurance.
- Pest damage: Incidents of bed bugs or damage caused by rodents or other vermin are typically excluded by your renters insurance also. Insect infestation and removal are not typically covered by renters insurance.
- Car theft or damage: Incidents of vehicle theft or damage to your car are covered under your car insurance policy and therefore excluded by renters insurance.
- Roommate’s possessions: Often excluding a spouse or partner, your roommate's possessions are typically excluded by renters insurance unless this person is specifically listed on your policy.
What is not covered by renters insurance is typically standard across most policies, but your coverage may vary. That's why it's helpful to review your coverage with your independent insurance agent from the beginning, so you'll be prepared if an incident isn't covered.
How Much Renters Insurance Should I Have and What's the Minimum Coverage for Renters Insurance?
When you choose a renters insurance policy, you will need to choose coverage amounts for three basic types of coverage:
- Personal property: Typically a minimum of $2,500 of coverage
- Liability: Amounts you choose, such as $100,000 of coverage for liability claims and legal defense
- Additional riders: Coverage you may need for your collectibles, personal items of value such as jewelry, and outdoor toys such as snowmobiles, ATVs, or personal watercraft (PWC)
Did you know that the average person has over $20,000 worth of personal belongings? When you consider the cost of electronic equipment, clothes, jewelry, tools, kitchen gadgets, and other personal items, you probably have far more invested in your personal property than you realize.
The best way to determine how much insurance you should carry for your personal property is to create an itemized list of your belongings and their replacement costs.
It is important to determine how much it would cost to replace each item as brand-new. This should give you a ballpark figure for the total amount of insurance coverage you should carry.
To choose the amount of liability coverage you need, consider the potential costs of a liability claim if you were sued for negligence or for another person’s loss.
An independent agent in our network can help you assess your needs and risks and choose the coverage amounts that are right for you.
Frequently Asked Questions About Renters Insurance Coverage
Renters insurance will help to pay your costs if you suffer a loss, such as a burglary. The amount of compensation you will receive depends on the type of loss and the amount of coverage you have in place.
For example, you can buy “actual cash value” (depreciated) coverage for your personal property, or you can buy replacement cost coverage for your personal possessions.
Certain items such as jewelry, collectibles or other valuable items may have a value limit or require additional insurance coverage to provide full coverage for loss, theft or damage. You will also be responsible for a deductible, which is an out-of-pocket expense.
If a visitor to your home, condo, townhouse or apartment is severely injured, that person can file a claim with your insurance company, and your insurer will address the claim.
Renters insurance is necessary if you are renting a home or apartment and want to be sure your valuable possessions are protected from loss, theft or damage, and it protects you in the event of liability claims as well.
You are not required to carry renters insurance by law, but a landlord can require renters insurance in your rental agreement.
Carrying renters insurance protects you and the landlord by ensuring that no matter what happens on the premises, either your renters insurance or the landlord’s insurance will provide compensation.
As an example, what happens if a neighboring tenant leaves cooking unattended and starts an apartment fire that damages your unit and belongings?
It’s possible that some combination of the neighbor tenant’s renters insurance, the landlord’s property insurance, and the personal property insurance in your renters insurance policy will come into play to cover the cost of repairs.
Renters insurance is important because your possessions are not protected by the landlord’s insurance policy. Landlord insurance covers damage to the building but does not protect your possessions.
Another good reason to have renters insurance is for protection against liability claims. The liability portion of your renters insurance will provide compensation if a visitor to your rented home is injured. If that person files a lawsuit against you, your renters liability insurance will also help to cover the costs of your legal defense.
Renters insurance can also cover temporary accommodations if you have to live elsewhere while your rental is being repaired due to fire, smoke or water damage.
Renters insurance is not tax-deductible except in the following situations:
- You use a part of your residence regularly and exclusively to operate a business. You then may deduct a portion of your renters insurance based on the dimensions of the space where you operate your business relative to the total size of the premises.
- You are an employee and work in both your employer’s office and your rented premises. In this case, you can deduct a portion of your renters insurance in the same manner as a home office. Check with your accountant for complete details.
Renters insurance covers fire and smoke damage after you pay your deductible. The amount of compensation you will receive in the event of fire damage depends upon several factors, including:
- The amount of coverage you buy
- Whether you choose actual cash value (depreciated) coverage or replacement cost coverage for your belongings
- Your deductible amount
In the event of a fire, you will file a claim for the loss, pay the deductible for your policy, and then receive compensation for the remaining costs of your loss, up to the limits of your policy.
Renters insurance covers your possessions for theft after you pay your deductible amount. Renters policies typically cover your belongings, whether the property your renting is burglarized, or the items are stolen from your car or while you are traveling.
Review the specifics of your policy to determine the circumstances under which you can file a renters insurance claim for theft.
Your renters insurance will typically cover your belongings if they are stolen from your car, but will not cover damage to the car itself. For car damage, you will want to check your comprehensive automobile insurance policy.
Whether your items are covered if they are damaged, stolen, or destroyed while in your storage unit depends on the specifics of your renters policy.
Some insurance companies do not cover personal items in a self-storage unit, while other companies will extend limited coverage. You can buy additional insurance coverage through the storage facility if it is offered, or through your insurance company.
Many renters insurance policies exclude certain pets. And some insurance companies will not provide coverage if you have a high-risk breed like a pit bull. You may need to get special insurance coverage that covers dog owners’ liability.
Renters insurance policies typically exclude bug infestations of any kind, including bed bugs, cockroaches and other bugs, as well as rodent infestations. You most likely are also not covered for any damage these pests cause, or for the costs to eliminate an infestation problem.
Most renters insurance policies do not cover damage caused by floods. Like homeowners, renters must purchase flood insurance separately to be covered for damage from flooding.
However, you are likely to be covered if a water leak within your rented property causes water damage to your belongings. Be sure to read your renters insurance policy carefully, so you know what is and is not covered.
Whether or not damage to any of your personal electronics or other belongings is covered depends on the coverage you buy and the cause of the damage.
If you have replacement cost coverage for your personal belongings, and the damage to the television was caused by a covered peril such as fire, theft or vandalism, your TV will most likely be covered. If it breaks from wear or misuse, it will not be covered.
The most common way to buy renters insurance is through an insurance agent. You can find a local independent insurance agent in our network right in your area.
Our agents have access to many different insurance companies and can help you compare policies, get renters insurance quotes, and find the right policy for your particular circumstances.
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