Renters Insurance

What Does (And Doesn't) Renters Insurance Cover?

What Does (And Doesn't) Renters Insurance Cover?

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Renters insurance covers costs associated with damage to or theft of your 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 or "perils" will qualify for a claim.

We recommend anyone renting a residence to consider purchasing a renters policy as an affordable way to protect you from the financial impact of these events. If you already have renters insurance, read on to see what type of events a typical renters insurance policy covers.

What is renters insurance?

Renters insurance protects tenants from the costs of unexpected personal property damage or theft and legal liability. Renters insurance can be bought by anyone renting an apartment, condo, home or other living space. Although the policy is similar to homeowners insurance, key differences include:

  • Renters insurance does not cover the structure, or dwelling, of where the tenant lives. Damage to the building is the landlord's responsibility, who will likely cover these risks with a landlord insurance plan.
  • Renters insurance is much cheaper than homeowners insurance.

If you're interested in purchasing renters insurance you'll have a variety of options, from established insurance names such as State Farm and Allstate to newcomers like Lemonade.

Learn More:

What does renters insurance cover?

Renters insurance generally provides financial protection through four coverage types.

  • Personal property damage: If your personal property is damaged in a covered peril, your renters insurance company will cover the cost of the damage up to your policy's limits. A covered peril is a damaging event named in your policy (or not specifically excluded from coverage) 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 the costs of your legal defense. A standard policy includes up to $100,000 in liability coverage.
  • Additional living expenses: If your rental home or apartment becomes uninhabitable as a result of a covered peril, your renters insurance policy will pay 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 tenants with substantial financial protection against unexpected events, but it's important to understand exactly which situations you'll be covered for, and which you won't be.

illustration of personal laptop and bonsai tree

Renters insurance covers personal property against specific perils

Covered perils:

  • Fire and Lightning
  • Wind and Hail
  • Explosions
  • Smoke Damage
  • Theft (for property in our outside your home)
  • Vandalism
  • Water Damage from as a result of freezing or leaking of plumbing and appliances
  • Mold
  • Volcanoes
  • Falling Objects
  • Storage Units
  • Snow and Ice Collapse

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 everything that causes damage to your property will be covered by renters insurance. You will only be qualified to make a claim if the cause of the damage, a "peril" in insurance terms, is covered by your policy. Covered perils may differ across renters insurance policies, but almost all will cover the common perils we've listed here. 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 a renters insurance policy, you should 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.

illustration of law balance scale and legal document

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 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.

illustration of hotel bed and take-out food

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 sometimes called loss of use.

If your apartment in San Francisco or Manhattan burned down, it would be pretty costly to have to live in a hotel in one of those cities. Eating out every night would only add to that 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.

illustration of ambulence

Renters insurance covers accidental injury costs for visitors

Renters insurance policies include limited medical payments coverage if guests are injured on 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.

illustration of toolbox and hammer

Other things covered by renters insurance

In addition to the four primary coverages, renters insurance policies often provide other 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 there is a mechanical or power failure in your apartment resulting in refrigerated food loss due to spoilage, renters insurance policies will often cover you. This will generally be covered under personal property limits.
illustration of more documents

Optional add-ons

There are a number of optional add-ons, or endorsements, a renter can add to their policy to bolster their coverage. These can be used to increase coverage limits or cover a peril that otherwise would not be covered. For example, renters insurance may offer additional coverage for earthquakes or floods, two common and damaging perils that are rarely included in a standard renters insurance policy. Renters insurance policies may offer add-on coverage for more unique risks too, such as a sinkhole endorsement that would protect your belongings against that peril.

If the coverage you need is not available as an endorsement, you might need to purchase an additional, separate insurance policy to ensure you are adequately covered.

What does renters insurance not cover?

Renters insurance does not cover:

  • Floods
  • Earthquakes
  • Sinkholes
  • Bed bugs and other pests
  • Damage to your car
  • Your roommate's possessions

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 also be more limited for specific high-value items, such as jewelry. Here, we've listed some of the more common coverage exclusions and limits in renters insurance policies.

Renters insurance does not cover property damage for all perils

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 other pests, such as rodents, they are considered a maintenance issue, and not covered under your standard renters policy.

Earthquake and flood damage

Most standard renters policies do not cover earthquake or flood damage, though some companies may offer coverage as an add-on if you pay extrae. If you're at risk for these perils and can't get earthquake or flood coverage through your renters insurance policy, you'll need to buy a separate flood or earthquake insurance policy for your personal property. These policies may be available from your renters insurance company or a different insurer.

Car theft or damage

If you own a car, its damage or theft 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 policies generally do not cover damage costs associated with your roommate's belongings. In order for them to be covered they have to be listed on the policy, in which case you could split the cost of renters insurance.

We would recommend not adding roommates however, unless they are related or a spouse. Adding a non-relative to your policy may save you some money, but it 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 across all items. Particular high-value items such as 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 individual items, you should 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 Computer$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.

Specifically, many insurers exclude coverage for aggressive dog breeds—such as pit bulls—and may even deny you coverage at all if you own one of these breeds. Exotic pets—such as reptiles or monkeys—also may not be covered under renters insurance liability. 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?

Your insurer will only provide you with coverage for these events if you file a claim. A claim is a request policyholders make to their insurance company to compensate them for a covered loss. In the case of renters insurance, a policyholder would make a claim for damage or theft to personal belongings, personal liability coverage or additional living expenses incurred. For example, 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.
  • 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: Contact your insurer to begin the claims process. Your insurer will provide you with the necessary forms and and request documentation. Ultimately, the insurer will send a claims adjuster to assess the damage, and the adjuster will determine your reimbursement.

Filing a claim can sometimes 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.

Chris Moon

Chris is a Product Manager for ValuePenguin with years of experience in addressing critical questions about mortgages and homeowners insurance. He spends his time evaluating insurance providers and policy features to understand where consumers might find the most cost-effective coverage. Chris has contributed insights to the New York Times and many other publications.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.