What Does Renters Insurance Cover?
Renters insurance covers your belongings and injuries or damage you may cause to someone else or their property.
Renters insurance isn’t required by law, but landlords often insist on it for tenants moving into an apartment, house or any other rental unit.
What does renters insurance cover?
Renters insurance typically covers:
- Your belongings
- Potential liability claims against you
- Guest medical expenses
- “Additional living expenses” (ALE) if your unit becomes uninhabitable
Most renters insurance companies also offer extra coverage endorsements, also known as riders, that you can add to your policy for additional protection.
Coverage for your belongings
The personal property coverage in renters insurance covers your belongings for theft or damage from a fire or other covered causes. It’s also called “contents coverage.”
The coverage comes with a deductible. If your property is stolen or destroyed, the insurance company subtracts your deductible from the amount it pays for your lost items.
Standard renters insurance covers your belongings at their actual cash value (their value after depreciation). However, many companies allow you to upgrade to “replacement cost coverage,” which replaces stolen or damaged items with new ones.
The coverage also applies to your belongings when they’re in your car, a storage unit or anywhere else outside your residence, although limitations apply.
Renters insurance for jewelry
Renters insurance usually only offers limited coverage for valuables like jewelry.
For example, many companies cap their coverage for jewelry at about $1,500 and have similar limits for collectibles and other high-value items.
However, you can usually purchase a rider to get extra protection for specific valuables you may own.
Personal liability protections for tenants
The “personal liability protections” in renters insurance covers injuries and damage you accidentally cause to other people or their property.
This coverage applies anywhere in the world, whether you are at home, outside in your community, or traveling abroad.
If you accidentally damage your rental unit, your renters liability coverage can also cover repairs. This is one of the main reasons why many landlords make their tenants get renters insurance.
Renters liability also covers your legal fees in a dispute over your liability for someone else’s injuries or damage to their property.
Guest medical coverage for renters
The guest medical expenses in renters insurance pays for the medical treatment of a guest visiting your home, regardless of fault.
Coverage amounts typically range from $1,000 to $5,000.
Additional living expenses (ALE) for renters
Also known as “loss of use,” ALE covers your temporary living expenses if a fire or another covered disaster leaves your rental unit uninhabitable.
ALE only applies to costs above your normal costs for expenses like rent, food and transportation. If a disaster requires you to live in a hotel for a month, for example, then your ALE covers the difference between your hotel bill and your normal rent.
It also covers the extra cost of meals and transportation in your temporary home. You’ll have to document your expenses to receive these funds.
Which risks does renters insurance cover?
Most renters insurance is offered on a “named-peril” basis, which only covers the perils (or risks) specifically listed in your policy or quote.
However, some companies offer “open-peril” coverage, which insures against any risk that is not specifically excluded. Open-peril policies cost more, because they provide more protection.
Regardless of whether you have a named-peril or open-peril policy, the risks that renters insurance usually covers include:
- Fire and lightning
- Theft and vandalism
- Pipes that burst during a freeze
- Sudden, accidental water releases from a failed appliance or home system
- Wind and hail (unless windstorm coverage is offered separately in your area)
- Falling objects, such as trees
Your personal property and ALE coverage only kicks in if your belongings and/or unit are damaged by a covered peril.
What does renters insurance not cover?
Although renters insurance covers many things, there are some damages that renters insurance doesn’t cover.
Flood and earthquake coverage for renters
Flood and earthquakes are the most common renters insurance exclusions.
You have to purchase flood and/or earthquake insurance separately to protect your belongings from these risks. Some flood and earthquake insurance companies also provide loss of use coverage for tenants.
Most mold coverage
Renters insurance only covers mold on an extremely limited basis. The terms vary by company.
Some renters insurance companies don’t cover mold damage at all. Others only cover mold damage resulting from a covered peril, such as mold that forms in water used to put out a fire in your unit.
When you rent a home from someone else, your landlord is responsible for maintaining a mold-free environment. This usually includes removing mold that is promptly reported by a tenant.
But you can be held responsible for a mold outbreak if you don’t take reasonable steps to prevent it or report it to your landlord in time.
Unfortunately, renters insurance usually doesn’t cover mold cleanup costs in situations like these.
Pest infestation coverage for renters
Renters insurance also doesn’t generally cover damage from pest infestations.
If bugs or rodents get into your unit, the damage they cause to your belongings is usually your own responsibility. Renters insurance usually doesn’t cover the cost of pest removal, either.
Renters insurance and car theft
Although it covers personal belongings stolen from your car, renter’s insurance doesn’t cover theft of the car itself.
You have to add comprehensive (comp) coverage to your car insurance to protect your vehicle from theft. If you have a car loan, your lender will require you to add comp to your policy, along with collision coverage. Otherwise, comp and collision are optional.
More frequently asked questions
It depends. If you damage a carpet in your unit that belongs to your landlord, the liability coverage in your renters insurance may pay to repair or replace it.
However, if you own the carpet and damage it yourself, your renters insurance likely doesn’t cover it.
Renters insurance can cover damage your pet causes to property belonging to your landlord or other people. Unfortunately, renters insurance does not cover damage your pet causes to your own property.
If you break someone else’s window by accident, the liability coverage in your renters insurance typically covers the cost of repairing or replacing it.
This includes a window in your rental unit, which technically belongs to your landlord, or a window in anyone else’s home.