What Does Renters Insurance Cover?

Does your renters insurance policy offer enough protection?

What does renters insurance cover?

 

Renters insurance covers you, your liability, and your belongings in the event of a covered loss.

Below is a list of typical covered — and not covered — losses. Renters insurance coverage is broken down into four coverage types: personal property coverage, personal liability, additional living expenses, and medical payments. In this article, we will define each of these coverage options, how much coverage they include, and what they cover.


Covered by renters insurance

Not covered

Fire and lightning

Ordinance of law

Wind and hailstorm

Earth movement

Explosion

Water (flood damage)

Riot or civil commotion

Power failure

Aircraft

Neglect

Vehicles

War

Smoke

Nuclear hazard

Vandalism or malicious mischief

Intentional loss

Theft

Wear and tear

Falling objects

 

Weight of ice, snow, or sleet

 

Accidental discharge or overflow of water or steam*

 

Sudden and accidental damage from artificially generated electrical current

 

Freezing of HVAC system

 

Volcanic eruption

 

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

 


What does a renters insurance policy cover?
  1. Personal property: what's covered?
  2. Liability protection
  3. Medical expenses and payments
  4. Additional living expenses
  5. Optional renters 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.

"Personal property" is a vague term. It can refer to clothing, furniture, art, electronics, or anything else owned in a rental house or apartment. This coverage may come with restrictions, called "special limits on liability."

Policy documents should detail these restrictions. Below are a few common restrictions.

Sub-limitPropertyLimitations
$200Money, Gold, Coins 
$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.


What does renters insurance not cover?

In addition to any damage caused by the above list of exclusions, the following items of personal property are excluded from coverage, regardless of the source of damage.

  • Animals, birds, or fish
  • Motor vehicles and any equipment used solely in the vehicle
  • Aircrafts
  • Property of anyone living in the residence, but not on the policy
  • The physical structure of the 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 protection 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 payment coverage renters insurance

This 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’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 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."

 



Optional renters insurance coverage

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


Replacement cost coverage

Most insurance companies have an option to upgrade reimbursement coverage from Actual Cash Value (ACV) 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.


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.


Sewer or drain backup coverage in renters insurance

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.


Rider/endorsement coverage in 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.

 



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