What does (and doesn't) renters insurance cover? (2024)

In a nutshell

A landlord's homeowners insurance policy only protects the building they own (and other structures on the property) while providing liability coverage in case someone gets hurt. Renters must purchase renters insurance to cover their personal belongings and other expenses related to perils in their apartment.

  • Renters insurance can cover possessions, medical payments, living expenses and additional liability.
  • Renters insurance is not mandatory, unlike auto insurance, but it may be a good idea if you have valuables in an apartment you are renting.

If you want to ensure you'll be made whole in the event of a fire, windstorm, or other covered event that causes damage to your personal belongings, read on to learn how renters insurance works, what it typically does and doesn't cover, and who needs to purchase this important protection.

What does renters insurance cover?

According to the Insurance Information Institute (III), renters insurance provides several important types of coverage that can protect you in the event of damage or a total loss. These coverages are highlighted in the chart below, as well as the type of possessions and claims they apply to.

Renters insurance coverage typesApplications

Coverage for possessions

Provides protection against financial losses caused by fire, smoke, lightning, vandalism, theft, windstorms, water, and other disasters that are listed in the policy.

Additional liability coverage

Provides coverage for lawsuits that arise from bodily injury or property damage.

Coverage for additional living expenses

Pays for an apartment or hotel when your rental property becomes uninhabitable due to a covered event.

Medical payments coverage

Covers payments when a guest at your rental home or apartment is injured and needs medical care.

Keep in mind that these are the main types of coverage you can get within a renters insurance policy, but select add-ons may be available as well. For example, some renters insurance policies let you pay more for additional protection against floods, identity theft restoration, and more.

Renters insurance policies also come with limits on coverage and deductibles you have to pay to access your benefits. If your rental property sustains massive damage from a tornado and your renters insurance policy has an annual limit of $15,000, for example, you can receive up to $15,000 in reimbursement for covered losses minus your deductible amount.

Finally, you should note that there are two main types of renters insurance policies, each of which offers reimbursement using a different approach.

  • Actual Cash Value coverage provides reimbursement for your ruined or damaged items after deducting a standard amount for depreciation. This type of renters insurance typically costs less, but you won't get the full value of your items if you face a total loss.
  • Replacement Cost coverage replaces your items or provides full reimbursement for what they cost today, at least up to the limits of your policy. This type of coverage costs more on average, but you'll be happy you have it if you need to file a claim.

What does renters insurance not cover?

While renters insurance provides a few levels of coverage for your possessions, additional living expenses, and liability situations that arise, some items are not covered by this type of insurance policy.

Items not covered with renters insurance include:

  • Personal property loss that exceeds the coverage limits on your renters insurance policy.
  • Liability situations that exceed the limits on your policy.
  • Damages caused to the structure of the building you are renting (which is covered by your landlord's homeowners policy).

According to Allstate, certain types of personal property may be excluded by coverage as well, although this depends on the details listed in your policy. Examples of excluded items in renters insurance policies include pricey jewelry you own and valuable collectibles or art.

That said, you may be able to purchase additional coverage for individual items you want protected, which is known as scheduled personal property coverage. This coverage can add to the annual costs of your renters insurance policy, but you will sleep better at night knowing your most valuable possessions aren't at risk in the event a fire, tornado, or any other covered event leads to a total loss.

Is renters insurance mandatory?

Renters insurance is not mandatory or required in any way, which is both good and bad news for renters. This means you don't have to buy renters insurance at all and that you can skip paying for coverage if you don't have any specific possessions you want to protect. However, no mandatory requirement for renters insurance also means many renters who need this coverage forget to buy it altogether.

Fortunately, you don't have to stress over the cost of renters insurance or whether obtaining this type of coverage will be complicated. Renters insurance companies like Lemonade let you apply for coverage in a matter of minutes. Their renters insurance policies also start at just $5 per month, so getting coverage won't cost you an arm and a leg.

How much renters insurance do I need?

How much renters insurance you need depends on the value of the possessions you own and how much liability protection you're willing to pay for. Before you buy a policy, you should make a list of all the major possessions you own and care about, from your furniture to electronics, firearms, jewelry, and clothing. From there, figure out how much you would need to spend to replace each item, or at least come up with an estimate of how much each of your possessions costs.

In the meantime, you'll also need to decide if you want actual cash value coverage or replacement cost coverage. While actual cash value coverage only offers reimbursement for how much your items are worth today (minus depreciation), a replacement cost policy will reimburse you for what you would have to pay to replace your items if you had to buy them new.

Finally, you'll want to consider how much liability coverage you want to purchase as a renter. While having liability protection in place may seem frivolous when you don't actually own a property, you will wish you had this protection if someone is injured on the property and decides to sue the owner of the home and you in the process.

At the end of the day, having some level of renters insurance protection is definitely better than nothing — even if you opt for low policy limits in order to secure more affordable premiums. Fires, tornados, wind damage, lightning damage, and other hazards can and do ruin people's belongings all the time, and you'll be left in the lurch if you fail to purchase renters insurance before disaster hits.

What does (and doesn't) renters insurance cover? (2024)

FAQs

What does (and doesn't) renters insurance cover? ›

In a nutshell

What is typically not covered by renters insurance? ›

Damage Caused by Floods, Earthquakes and Sinkholes

Flooding, earthquakes and sinkholes are all examples of natural disasters that are not covered by a typical renters insurance policy.

What are the 4 parts of coverage for renters insurance? ›

Renters insurance covers you, your liability, and your belongings in the event of a covered loss. Renters insurance coverage is broken down into four coverage types: personal property coverage, personal liability, additional living expenses and medical payments insurance.

What are 2 reasons people typically do not get renters insurance? ›

Many renters don't purchase renter's insurance, either because they don't think it is necessary or believe they are covered under the landlord's policy. The cost of renter's insurance is relatively low.

What is renters insurance in simple terms? ›

Renters insurance protects your personal property in a rented apartment, condo or home from unexpected circumstances such as theft, a fire or sewer backup damage – and will pay you for lost or damaged possessions. It can also help protect you from liability if someone is injured on your property.

Does renters insurance cover a broken window? ›

Renters insurance will not cover a broken window in your own residence, but the personal liability coverage in your policy will cover damage to someone else's window if it's determined you're the liable party.

Does renters insurance cover broken TV? ›

Renters insurance can cover all sorts of electronics, including video game consoles, TVs, and computers. That means that your policy may help pay to repair or replace your tech in certain situations, like if they're stolen or damaged by a fire. In insurance speak, these scenarios are referred to as covered perils.

What are three ways renters insurance protects a renter? ›

Renters insurance policies are helpful in three ways: repairing or replacing your belongings if damaged, paying for living expenses if you're displaced, and covering damages to others.

Does renters insurance cover clothes? ›

Personal property coverage covers your possessions—including electronics, clothing, and furniture—in case of loss or damage. Your possessions may be covered even if you're away from home when the loss occurs.

Does renters insurance cover electrical damage? ›

Your personal property insurance, part of standard renters insurance, covers damages from a power outage. The following are examples of things renters insurance covers because of a power outage. Food loss because of a long-term power outage. Electronics damage due to power surges.

Why do landlords want you to have renters insurance? ›

Unlike some other states, California landlords are allowed to require tenants to obtain and maintain renters insurance while they are under the terms of the lease. This is done in part to protect landlords from lawsuits in the event that damage to the property causes it to become uninhabitable.

Is it worth it to get renters insurance? ›

Renters insurance coverage is almost always worth it. It is much more affordable than other policies, including home or auto insurance, and provides valuable financial protection. Even if you can save enough money to cover unexpected loss, renters insurance may be worthwhile.

Why is failing to get renters insurance important? ›

Renters insurance protects your belongings from loss, damage, or destruction following things like burglaries, fires, tornadoes and other covered events. Plus, renters insurance also protects your liability (and your money) if someone is injured at your rental home or apartment.

What does renters insurance include coverage for? ›

Renters insurance covers personal property, personal liability, medical payments and additional living expenses or loss of use, up to the limits of your policy.

How does a renters insurance deductible work? ›

How does a deductible work for renters insurance? Renters insurance deductibles are applied the same way as homeowners and condo insurance deductibles. If you file a claim on a covered loss, your insurer will pay you the amount above your deductible, up to your policy's limit.

Which of the following items below would be covered by a standard renters insurance policy? ›

The typical renters insurance policy covers personal property, living expenses, liability coverage, and medical expenses, all of which we'll cover in-depth below.

What two disasters are not covered by renters or homeowners insurance? ›

Homeowners, renters, and condominium insurance policies do not cover damage from natural disasters such as earthquakes, floods, and landslides.

Does renters insurance cover spoiled food from a broken fridge? ›

Renters insurance can cover the food in your fridge

But before you start to make a new shopping list (and ideally after you've cleaned up the evidence), check in with your insurance agent: Food spoiled because of a power outage or failed appliance should be covered as personal property.

Does renters insurance cover pet damage to carpet? ›

If your cat tears up your apartment's wall-to-wall carpeting or your brand new couch, renters insurance typically does not cover the damage. But if your dog bites someone or gnaws the legs off your neighbor's lawn furniture, your renters insurance might provide coverage.

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