- Renters insurance generally covers replacing or repairing your damaged or stolen belongings, but not the actual structure of the property.
- It will not cover damage due to flooding. Same goes for mold or bedbug removal.
- The average annual premium for renters insurance is $180.
- You’ve got some expensive jewelry or an antique? You may want an additional rider to cover it.
If you live in a rented house or apartment, renters insurance is a must-have. This type of insurance covers your personal property in case of damage or theft, as well as protecting you against legal liability if someone is injured while at your home.
But knowing what exactly is and is not covered with renters insurance can get confusing. Let’s take a closer look at a typical renters insurance policy to determine what types of events and items are typically covered, and which ones are not.
Inside this article
What does renters insurance cover?
Renters insurance covers a long list of incidents that generally fall into one of three categories: personal property, liability and additional living expenses. Each category covers a range of situations that might happen when you’re renting a property.
Personal Property Coverage
When it comes to types of renters insurance, personal property coverage is perhaps the best-known. This insurance covers your personal belongings in case they are damaged or stolen from your rented home.
Since you don’t own the home, renters personal property insurance won’t cover the physical dwelling, but it will cover the items you personally own like furniture, electronics, small appliances, clothing, linens, bicycles and musical instruments. It may also cover some of your valuables, such as jewelry, provided their value falls below a certain threshold (as determined by your insurance provider). If your valuables are worth more than that threshold amount, you’ll need to take out additional coverage to protect those items.
A renters personal property policy can be purchased from any major insurance provider. You may be able to choose either an actual cash value policy or a replacement cost policy.
Actual cash value means that your insurance provider will pay the amount that the item would have been worth if sold in its used condition. For example, if your 5-year-old TV is stolen from your home, an actual cash value policy would give you the amount that the TV was worth when it was taken, which would give you less cash in hand to buy a replacement. However, the premiums are generally lower if you choose actual cash value, so if you’re on a budget this might be a good option for you.
A replacement cost policy will pay you the amount it would cost to purchase the item brand-new. Using the same example of the 5-year-old TV, this policy would look at an equivalent brand-new TV and pay you that amount to replace the stolen one. If the TV was a 65-inch LCD, your insurer will reimburse you to buy a new TV of the same size and type. You’ll pay more in premiums for a replacement cost policy, but if you need to make a claim you’ll be able to replace your items for like items without having to pay out of pocket.
Renters Liability Insurance
Like other types of liability insurance, a renters liability policy will cover you if you’re the victim of a lawsuit following an incident on your rental property, such as an injury or damage to a neighbor’s personal property. It will help pay for any related legal expenses, as well as damages owed.
Some examples of covered events include your dog biting a visitor to your home, or a visitor falling down the stairs after holding an unsupported rail that you failed to fix. Your liability insurance may also pay for the injured party’s medical expenses if they do not have health insurance or have not yet reached their deductible or out-of-pocket max.
Check to see what your provider offers in terms of limits; if the standard limit seems too low for you, you can take out an additional umbrella policy to help pay any costs that exceed your standard policy’s limits.
Additional Living Expenses
If your rental home is rendered unlivable (for example, due to fire or storm damage), additional living expenses coverage can help pay for your temporary lodging and any affiliated expenses while it’s being repaired. For example, it can help pay for your rent if it exceeds your normal monthly amount, and for items like food and travel if you’re living somewhere without a kitchen or further away from your work. It can also pay for laundry costs if you’re staying somewhere without a washer and dryer, or for parking if your temporary lodging doesn’t offer free parking but your permanent rental home does.
What doesn’t renters insurance cover?
While the list of situations renters insurance covers is extensive, there are also numerous instances in which your renters insurance won’t pay out.
Just like homeowners insurance, your renters insurance probably won’t cover flood damage. If you live in a place where there is a strong likelihood of flooding, you may be able to purchase a separate flood insurance policy. Other disasters that aren’t covered include earthquakes and acts of terrorism.
The rental property itself also isn’t covered by renters insurance. The landlord should have a policy to cover any damage to the structure itself, while your renters insurance policy covers your personal belongings inside the property.
If you find mold or bedbugs within your rental property, chances are that your policy will not cover the costs of repair and clean-up. That’s because both situations can be prevented with regular maintenance and cleaning. Mold may be covered if it was caused by a new indoor water leak, but if it’s a known and ongoing problem or caused by a flood, it likely won’t be covered.
How much coverage do you typically get?
The amount of coverage you get with renters insurance depends on your policy. According to the National Association of Insurance Commissioners, the average annual premium for renters insurance in 2017 (the most recent year for which the organization has released data) was $180. That buys you an average of $30,000 in personal property coverage and $100,000 in liability coverage, according to a study by Policygenius.
Of course, you can choose to take out more than the average coverage amount, but your premiums will increase accordingly. That’s why it’s important to take an inventory of your personal property to determine how much coverage you would need to replace everything if disaster were to strike. That way, you can take out the correct amount of coverage and avoid ending up with too little or paying for too much.
It’s also important to consider your deductible, which is the amount of money you’ll need to pay out of pocket before your insurance coverage kicks in. While having a higher deductible means your insurance premiums will be lower, you’ll need to make sure you have that amount in savings so you can pay it if you ever need to make a claim.
Tip: If you have valuable items in your home, it’s a good idea to consider adding riders or floaters to your renters policy. They can help cover expensive items such as antique furniture, specialty hobby items and expensive jewelry. Without an add-on policy to cover these items, you’d be on your own when it comes to replacing them.
Does renters insurance cover theft?
Theft is one of the events covered by renters personal property insurance. If someone breaks into your rented home or apartment, you can make a claim to help replace the items that were taken.
If the thief takes items that are not covered by your basic policy, you will not be reimbursed for them. For example, if you have a pair of diamond earrings worth $5,000, your insurance policy will likely require you to take out additional insurance in order to cover them. But if the earrings are only worth $500, they’re probably covered by your basic personal property insurance policy. Make sure you check with your insurer to see if you have any items that would need additional insurance in order to be protected.
Tip: Renters insurance does not cover car theft—even if the car was parked on your property when it was stolen. Any automobile-related claims must be made through your car insurance policy.