What Does Renters Insurance Cover?

Does your renters insurance policy offer enough protection?

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What does renters insurance cover?

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. Keep reading to explore these coverage options and how they can protect you and your belongings.


Table of contents: what does a renters insurance policy cover?
  1. What incidents does renters insurance protect against?
  2. Renters policy coverages: explained
  3. How much renters insurance do I need?
  4. Optional renters coverage
  5. What's not covered by renters insurance?

 


 

What incidents does renters insurance protect against?

Below is a list of incidents and perils typically covered — and not covered — by renters insurance policies. 

Covered by Renters InsuranceNot Covered by Renters Insurance
Fire and lightningOrdinance of law
Wind and hailstormEarth movement
ExplosionWater (flood damage)
Riot or civil commotionDamage caused by power failure
AircraftNeglect
VehiclesWar
SmokeNuclear hazard
Vandalism or malicious mischiefIntentional loss
Falling objectWear and tear
Weight of ice, snow, or sleet 
Accidental discharge or overflow of water or steam* 
Freezing of HVAC system 
Volcanic eruption 

*Damage from plumbing, heating, air conditioning, or automatic sprinkler system.

 


 

Renters policy coverages: explained

Below we break down each part of your renters policy to give you a better idea of how it protects you. Along with definitions of some common insurance terms, you'll also find tips on how to set your coverage limits for each type of coverage.

 

Personal property coverage

Renters insurance covers personal belongings up to a predetermined coverage limit. The amount of renters coverage is defined by the insurance policy and may total 10% of the policy's personal liability coverage. For example, a policy with $100,000 of liability coverage would include $10,000 of personal property coverage. However, many insurers allow more flexibility to policyholders to choose their coverage limits that best suit their needs. 

While "personal property" is kind of a vague term, it typically refers to clothing, furniture, art, electronics or anything else owned in a rental house or apartment. This coverage may come with restrictions or special limits.

Your policy documents will detail these restrictions, but you'll find some of the more common limits listed below.

Sub-limitPropertyLimitations
$200Money, coins, gold 
$1,500Jewelry, watches, fursTheft only
$1,500Watercraft, trailersTheft only
$2,500Firearms 
$2,500Silverware 
$2,500Business propertyOn-premises
$500Business propertyOff-premises
VariesElectronics 

 

On- and off-premises refers to the address listed on the policy. Renters insurance partially covers the insured party away from their rental property. Off-premises coverage typically only protects against theft.


Personal property not covered by renters insurance:

The following items of personal property are typically excluded from renters coverage, regardless of the cause of damage.

  • Animals, birds, or fish
  • Motor vehicles and any equipment used solely in the vehicle
  • Aircrafts
  • Watercrafts
  • Property of anyone living in the residence, but not on the policy
  • The physical structure of the rental unit

 


Renters insurance liability protection

In the same way that personal property protects belongings, liability coverage protects you. If you cause bodily injury or damage someone’s personal property, liability coverage can cover the costs — including legal fees. Liability insurance covers damages up to the liability policy limit, which is variable. A typical liability limit is $100,000. This coverage follows the insured party around the world at the same coverage amount.

 


Medical payments coverage renters insurance

Medical payments coverage pays for the medical expenses of an injured party — not the insured — if the injury occurs on the insured’s rental premises or as a result of the insured party’s actions.

Renters medical payment coverage includes:

  • Medical bills and payments
  • Surgical costs
  • Cost of X-rays
  • Dental procedures
  • Ambulance and hospital fees
  • Nursing care
  • Prosthetic devices
  • Funeral services

The medical payments coverage limit — which may vary — exists on a per-person basis. A typical limit is $1,000.

 
What is not covered by medical payments to others?
  • Any damages deemed intentional
  • Damages suffered by an employee working for the insured party's business 
  • Injuries suffered in relation to watercraft, vehicles or war

 

Additional living expenses renters insurance

If the apartment or house you rent is deemed unlivable as a result of a covered loss, additional living expense coverage will cover the costs of residing elsewhere, up to the policy's coverage limits. Depending on the insurance provider, this coverage could be referred to as "loss of use." This typically covers hotel bills, costs related to transportation, and — in some cases — meals. 

What is not covered by additional living expenses insurance?

Your insurer may have stipulations regarding loss of use coverage, restricting how it can be used. Please check your policy documents or inquire with an insurance agent for more details. 

 


 

How much renters insurance do I need?

The short answer: as much as you can afford.

A renters insurance policy is an inexpensive way to protect your belongings if your rental unit is damaged or destroyed. While renters insurance does not cover the actual structure of the rental (that's what your landlord's rental property insurance is for), it's a relatively affordable way to safeguard your personal possessions and stay protected if someone sues you after injuring themselves in your home. See average annual rates by personal property limit below:

AVERAGE RENTERS INSURANCE PREMIUM BY PERSONAL PROPERTY COVERAGE
25K Personal Property Limit50K Personal Property Limit
$150$218


The average annual cost of renters insurance is $188 — it's the cheapest type of insurance you can get and is a small price to pay should your valuables suffer property damage. A renters policy specifically protects you, the renter, while your landlord's policy operates independently and does not cover their tenants' belongings. This is why it's always encouraged — and often required by landlords — to purchase your own renters policy before signing a lease.

Let's examine how to determine just how much renters insurance coverage you should get for your situation by reviewing the individual parts of a typical renters insurance policy.

 

How to make a personal property inventory for renters insurance

It's time to make a home inventory that includes all of your personal possessions. Tally the contents of every room — furniture, artwork, and even odds and ends — and note any valuables or items that could be expensive to replace. Develop a rough estimate of how much the items are worth. If you can, take photos of the contents of your home in its current state for reference if you end up needing to file a renters insurance claim. A typical personal property limit is $10,000 — but it's up to you to decide whether this amount is enough coverage, adjusting as needed if you own valuable items. Note that you'll also be subject to a deductible if you file a claim.

Policyholders tend to severely undervalue their possessions. It typically does not cost much more in renters premiums to carry higher limits. If you can afford it, consider playing it safe and going for a higher limit for the added peace of mind.

 



Optional renters insurance coverage

The coverage options listed above are standard in many renters’ policies. However, additional coverage options are worth considering.


Replacement cost coverage

In renters insurance, there are basically two types of coverage: Actual Cash Value (ACV) and Replacement Cost Value (RCV). Many insurance companies provide coverage at actual cash value, but some have an option to upgrade reimbursement coverage to Replacement Cost. An ACV policy considers depreciation in reimbursement. Replacement cost pays the current market value of personal items. An ACV payout will usually be worth less than a replacement cost payout.

Who needs replacement cost coverage?

Individuals with expensive personal items.


Earthquake coverage in renters insurance

Depending on location and insurance company, earthquake coverage is an optional addition to a renter's policy. If you live in an earthquake-prone location, speak to an insurance agent about adding this coverage.

Who needs earthquake coverage?

Renters residing in earthquake-prone locations.


Sewer or drain backup insurance for renters

If your rental unit is damaged by a sewer backup, you likely will not have coverage without this option. This covers the damage caused by water from a sewer or drain. If a sump pump breaks and causes your living room to flood, this coverage would kick in and cover repairs to your personal possessions.

Who needs drain backup insurance?

If you have an aging sewer system, live in a city with known pipeline issues, or have tree roots near your plumbing.


Riders and endorsements for renters insurance

A rider — also known as a floater or endorsement — extends the special limits of liability on your personal items. If you have expensive items such as jewelry, coins, or art, consider this coverage. If you have valuable items, such as an engagement ring, add a scheduled endorsement to your policy. A scheduled endorsement requires an appraisal but is essential for high-value items.

Who needs this?

Renters who own fine art, jewelry, firearms, or other valuables.

 

Renters and auto insurance bundle

Many companies offer the chance to bundle your renters and car insurance coverage. While this can make bill-paying more streamlined, it can also lead to savings. 

Who needs this?

Renters looking to consolidate coverage and save money on their monthly expenses. 

 


 

What is not covered by renters insurance?

A handful of perils are not covered by renters insurance. Below are common exclusions and what you can do to get coverage.

 

Ordinance or law

If a law requires something in your apartment to be updated, your renters insurance will not cover the updates. For example, if you have an outdated electrical system that is damaged in an incident and a new city ordinance requires it to be updated with different materials, your renters insurance policy would not cover the cost of these new materials or labor costs. While you can add this coverage to your policy with an ordinance or law endorsement, this is much more common if you're a homeowner.

 

Earth movement

This is a broad term for earthquakes, mudslides, sinkholes, and landslides. In order to have coverage for these events, you need to add supplementary coverage. Depending on your location, you may be able to add this coverage to your renters coverage. In some locations, you will need a separate earthquake insurance policy.

 

Water/flood damage

While your renters policy does cover some water damage, damage caused by a severe weather event (like many natural disasters) will not be covered by a renters policy. In order to get coverage for floods or hurricanes, you typically need to get coverage from the National Flood Insurance Program (NFIP) via the federal government.

 

Neglect

If you fail to take care of your apartment, your renters coverage will offer no protection. This can include bug infestations — such as cockroaches, bed bugs, and rats. In the eyes of an insurance company, it is primarily your responsibility to take care of your apartment — not theirs.

 

"Dangerous" dogs

Renters insurance typically covers claims if your dog bites someone or damages their property — unless your company views the breed as "dangerous" or "vicious." The definition of a "vicious" dog varies but may include German Shepherds, Rottweilers, Pit Bull mixes, and Doberman breeds. If your furry friend falls into this category, you can shop around for an insurance company that will cover you, exclude your dog from coverage, or purchase a supplemental policy specifically for your dog. Learn more about pets and renters insurance.

 



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Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to auto and home insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com, and Kin Insurance.