A renters insurance policy is a group of coverages designed to help protect renters living in a house or apartment. A typical renters insurance policy includes three types of coverage that help protect you, your belongings and your living arrangements after a covered loss. Read on to learn how each type of coverage works.
What does renters insurance cover?
Renters insurance (sometimes referred to as "tenant insurance") helps cover unexpected events — otherwise known as covered perils. You may not always be able to prevent certain situations, such as theft, a break-in or a visitor's injury, and that's where renters insurance comes in. This table breaks down the different types of coverages in a renters insurance policy and what they usually cover.
Coverage type | Personal property | What's typically not covered |
|---|---|---|
Personal property | The cost to repair or replace your belongings, such as clothing, furniture and electronics, up to the limits in your policy | Personal property loss over your coverage limit |
Liability | Repairs if you accidentally damage someone else's property or a guest's medical bills if you're found responsible for their injuries | Liability protection over your coverage limit |
Additional living expenses | Additional costs you incur, like hotel bills, if the residence you rent is damaged and left uninhabitable | Damage to the structure of the building you're renting |
Renters insurance and personal property coverage
Personal property coverage, a standard component of renters insurance, may help cover the cost of replacing your stuff if it's unexpectedly damaged or destroyed. This protection generally applies to certain risks (also referred to as "perils"), such as fire, according to the Insurance Information Institute. For example, if your furniture and clothing are destroyed by a fire, this coverage may help you pay for the cost of replacing them. However, remember that coverage limits — the maximum amount your policy will pay for personal property losses — will apply.
Does renters insurance cover theft?
If your renters insurance policy includes personal property coverage, it may help pay to replace your stolen items. This coverage typically protects items stolen after a break-in at your rental property, or even items stolen outside of your rental. For example, if your personal property (such as a gaming system) is stolen from your car, the personal property coverage in your renters policy may help pay to replace it.
Keep in mind that personal property coverage is usually subject to a deductible. This means you'd have to pay a certain amount of money toward the covered item's repair or replacement before your insurer will help pay for the loss.
Be sure to read your insurance policy carefully to understand what may or may not be covered.
How much personal property coverage do I need?
Think of everything you own. The value of your belongings can quickly add up. How much would it take to replace them if they were damaged or destroyed?
When purchasing a renters insurance policy, you may have a few different choices when it comes to selecting personal property coverage. Here are a few things to keep in mind:
- You'll want to set coverage limits that are appropriate for your situation. Creating an inventory of the belongings you store in your apartment or home may help you assess the value of your things so you can decide how much personal property coverage is right for you.
- You may also have to decide what kind of personal property coverage to purchase. A policy that provides actual cash value protection typically covers belongings up to their current market value (taking depreciation into account). A policy that includes replacement cost coverage may help you pay to replace your items at today's retail prices after a covered loss.
Property that may not be protected by renters insurance
Personal property coverage may not help protect everything you own. Certain types of belongings, such as jewelry or a coin collection, have limited coverage under a standard renters insurance policy. You may be able to add additional coverage, called scheduled personal property coverage, to your policy to help protect your valuables. A local insurance agent can help you determine whether this coverage makes sense for your situation.
Liability coverage for renters
Liability coverage is another protection typically included in a renters insurance policy. This coverage may help protect you from paying out of pocket for certain costs if you are found legally responsible for injuries to other people or damage to their property.
You probably don't expect an accident to occur. But, if your child throws a ball through a neighbor's window or you're held responsible for medical bills after a guest trips and falls in your rented home or apartment, for example, liability coverage may help cover the costs.
Similar to other coverages, limits apply to the amount your insurance policy pays out after a covered loss. Read your policy to understand how much coverage it provides and make sure it fits your needs. Your insurance agent can help you adjust the limits if you decide you may benefit from additional coverage
Renters insurance and additional living expenses
If you're renting a house or apartment, you typically have a place to call home until your lease expires. But what if your rented home is damaged by fire, for instance, and you're unable to live in it? That's where renters insurance may help.
Renters insurance usually includes coverage for additional living expenses. This coverage helps pay for additional costs you incur because you are unable to live in the home you're renting after a covered loss. Covered costs may include hotel bills or additional food expenditures that are above the amount you would typically spend. Check your policy to learn how much coverage you have in place for additional living expenses and to review the risks your policy may cover.
How to file a renters insurance claim
If you need to file a renters insurance claim, here are some tips to remember to help you through the process. However, keep in mind that your claims process may vary depending on the extent of damage.
- Contact your insurance agent as soon as possible to report the claim.
- Protect your items from further damage. Talk to your agent about any emergency repairs that may be needed.
- Your agent will ask questions about the damage and answer any questions you may have about the process.
- Discuss your policy's coverage and limits with your agent to understand what applies to your situation.
- Document damaged items in writing, and take photos or videos of the damage, before repair work begins.
Other considerations
Before renters insurance helps pay for a covered loss, you'll likely need to pay a deductible. The amount of your deductible is often tied to your policy's premium (the amount you pay your insurance company to keep your policy in force). You'll typically find that the lower your premium, the more your deductible may be for each covered loss. Your deductible and premium are listed in your policy and can usually be adjusted based on your budget and needs.
While renters insurance helps protect you and your belongings, keep in mind that it typically does not cover the physical building you're living in. Landlord insurance is designed to help protect the owner's dwelling, while you, the renter, are usually responsible for protecting the belongings you keep inside. Similarly, while landlord insurance may offer liability protection for the policyholder, that protection typically does not extend to tenants.