Renters insurance is a must-have for anyone renting a home or apartment. It helps protect your personal belongings, provides liability coverage, and can even help with temporary living expenses if your rental becomes unusable. While your landlord’s insurance covers the building itself, it won’t cover your personal items or any risks specific to you. Here’s what renters insurance covers and why it’s important.
What Does Renters Insurance Cover?
Renters insurance has three main parts:
- Personal Belongings Coverage
Renters insurance protects your belongings, such as furniture, electronics, and clothing, from damage or loss caused by events like fire, theft, or vandalism. Without it, you’d have to pay to replace these items out of pocket. Some events—like earthquakes or floods—are typically not covered, so you may need extra coverage for those. - Liability Coverage
Liability insurance protects you if someone gets hurt while visiting your rental or if you accidentally damage someone else’s property. For example, if a guest trips in your apartment, liability coverage can help pay for medical bills or legal expenses if you’re sued. - Loss of Use Coverage
If your rental becomes uninhabitable after a covered event, renters insurance can help pay for extra living expenses. This includes hotel stays, temporary rentals, or additional food costs while your home is being repaired.
Are your personal belongings protected?
When you rent or lease, your landlord’s insurance usually only protects the building itself—not your personal belongings. Renters insurance is the only way to protect your valuables, and it’s much more cost-effective than you’d think. The amount of insurance you need will depend on the value of your possessions so that they can be replaced. It’s important to know that certain events might be covered, while things like earthquakes and flooding are typically not. Here are some of the most common covered events in a renters policy:
- Burst Pipe
- Fire/Smoke
- Lightning
- Theft
- Vandalism
- Water Back-Up
- Wind
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Personal Property
Risk Factor
Unpredictable losses can occur to your property due to burglary, fire, water damage, storm, and more.
Solution
Personal property, such as furniture, rugs, TVs, stereos, clothes, and more may be covered under your basic insurance policy. However, items like jewelry, furs, silverware, antiques, collectibles, and other valuables should likely be insured separately.
Limits and Exclusions
Risk Factor
Some types of personal property are subject to limits of coverage under renters insurance policies. These limits vary by the type of property and by what caused the loss or damage. For example, jewelry, bicycles, collectible cards, and coins may have limited coverage or may not be covered.
Solution
Obtain a personal floater or schedule your valuable possessions to ensure you’ll have the money to replace them.
Additional Living Expense
Risk Factor
If the building you live in has a loss from a covered peril under your renters insurance policy that makes your apartment or home uninhabitable, you will need to find somewhere else to live while the repairs are undertaken. This can be expensive and inconvenient.
Solution
Be sure your insurance policy includes additional living expense coverage. If you need to move out and rent another location, this coverage provides for the increase in living expenses–such as moving costs, increased food costs, and other expenses.
Liability
Risk Factor
You are responsible if you or a guest in your unit trips and falls or sustains an injury while on your property.
Solution
Be sure that you have adequate liability insurance to protect for claims made against you for bodily injury or property damage – such as a slip and fall or other allegation. Liability coverage also provides protection should you become legally liable for unintentional bodily injury or property damage anywhere in the world.
Medical Expenses
Risk Factor
You're responsible if a guest is injured while on your property and you may be required to pay their medical expenses.
Solution
Ensure your insurance policy covers this risk. In the event a person is injured in your unit, he or she can submit medical bills to your insurance company. Medical expenses are usually paid without a liability claim being filed against you, with typical limits ranging from $1,000 to $5,000.
Landlord
Risk Factor
You may not be able to rent the apartment or home if your landlord or property manager requires renters insurance and you do not have it.
Solution
Having a renters insurance policy allows you to provide a certificate of insurance to the landlord or property manager showing that you have the coverage required to rent the apartment or home.
Improvements or Betterments
Risk Factor
Any improvements or betterments that you have made to your unit are subject to damage.
Solution
Be sure to obtain coverage for improvements or betterments that you have installed in your apartment or home.
Contents Away from Home
Risk Factor
You may take your valuable property outside of your unit. For example, what happens if your laptop or golf clubs get damaged or stolen while traveling?
Solution
Be sure to add off premises theft coverage to your policy to cover your personal property while your belongings are away from your home. Auto insurance does not usually cover personal property stolen from your car.
Premises Liability
Risk Factor
You may be responsible for damage to your apartment or dwelling should you, for example, have a leaking sink or accidentally start a fire.
Solution
Be sure your policy has liability coverage that includes tenants legal liability or premises liability. Your landlord may require that you to have this type of insurance protection in place as a requirement before renting the property to you.
Are There Coverage Limits and Exclusions?
Yes, renters insurance policies often have limits on certain types of belongings. For example, items like jewelry, antiques, or collectibles may only be partially covered unless you add extra coverage for them. If you have high-value items, make sure they’re properly insured.
Some things are not covered under renters insurance. Floods and earthquakes usually require separate policies. Additionally, renters insurance doesn’t cover your car if it’s damaged or stolen from your rental property. Roommates’ belongings also aren’t covered unless they’re listed on your policy.
Additional Benefits of Renters Insurance
Renters insurance can also cover some things you might not expect:
- Improvements You’ve Made: If you’ve added custom shelves or fixtures to your rental, renters insurance can cover damage to those improvements.
- Belongings Outside Your Home: If your laptop or other belongings are stolen or damaged while traveling, renters insurance can help cover the loss.
- Accidental Damage to Your Rental: If you accidentally cause damage to your rental, like a leaking sink that causes water damage, renters insurance can help cover the cost of repairs.
Why Liability Coverage Matters
Liability coverage is one of the most important parts of renters insurance. It protects you from paying out of pocket if someone gets hurt in your rental or if you cause damage to someone else’s property. No-fault medical coverage is also included in most policies, which means your insurance can cover a guest’s medical bills without them needing to file a claim against you.
Why You Need Renters Insurance
Many landlords now require renters insurance before you can sign a lease. Even if it’s not required, renters insurance is a smart investment. Without it, you’d have to cover the cost of replacing your belongings, paying liability claims, or covering temporary living expenses on your own.
Renters insurance is more affordable than most people think, and it provides peace of mind knowing you’re protected from unexpected events.
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