Renters Insurance Coverage Explained

Renters insurance covers your personal belongings if they're stolen or damaged by a covered loss, such as a fire or vandalism, as well as liability expenses if you can be held responsible for another person’s damages or injuries. It can also cover temporary living expenses if your rental is made uninhabitable.

While you might assume your landlord is responsible for covering you in these scenarios, it’s up to you to get your own renters insurance coverage to protect yourself and your property. Keep reading to learn what renters insurance covers and what it doesn’t.

What Is Covered By Renters Insurance?

Renters insurance typically covers damage to or theft of your personal property and protects you if you injure someone and they sue you or receive a medical bill and additional living expenses if you lose the use of your rental. Below, we’ll break down the different types of scenarios that your renters insurance will cover.

Personal Property

Personal property coverage reimburses you for the loss of your personal belongings if caused by a named peril in your policy. Covered personal property may include clothing, furniture, electronics and certain appliances. Your renters insurance policy will typically cover your belongings against the following common perils, although each policy may have exceptions:

This coverage often extends beyond the walls of your rental, with most policies including off-premises coverage if your personal property is damaged outside your home. Keep in mind that the limit for off-premises coverage is often less, possibly only 10% of your overall personal property coverage limit.^[1]

Personal Liability

Your renters insurance will typically cover you if you are found legally responsible for bodily injury or property damage to another party. For example, if your neighbor sues you for reparations after your dog escapes and chews their expensive lawn furniture, your renters insurance company would help cover the cost of replacing their lawn furniture. If you were sued for these issues, personal liability coverage would also pay for legal fees, such as the cost of hiring legal representation.

Medical Payments to Others

Medical payments coverage pays for medical bills when you are responsible for another person's injuries. For example, your insurer may cover doctor bills if your dog bit one of your guests inside your rental unit.

Your insurer may cover medical payments to others even when you aren’t directly liable, such as if someone broke their ankle from tripping up your stairs. However, medical payments coverage doesn’t cover legal fees and may have a lower limit than personal liability claims, as they’re designed to cover minor injuries.

Additional Living Expenses (ALE)

Additional living expenses coverage, also called loss of use coverage, covers certain expenses if your home is temporarily uninhabitable due to a covered loss. For example, if your apartment unit is undergoing repairs after a fire, additional living expenses coverage would pay for hotel bills and meals. Be sure to keep copies of receipts, which you would submit when requesting reimbursement.

Keep in mind that your insurance policy will typically only cover living expenses beyond your everyday costs.

For example, if your rent is typically $1,000 but your hotel costs for the month you are left without use of your rental are $1,500, you would likely only be reimbursed for the $500 difference.

Additional Coverage

Other types of coverage extended under renters insurance may include:

• Debris removal: Your insurer may cover the cost of removing debris from your rental unit if it is related to a covered loss, such as a windstorm blowing through the rental property.
• Equipment breakdown: Your personal washer and dryer, freezer, air conditioner and computer equipment are typically covered by named perils but can also be covered from electrical failure and mechanical breakdown by purchasing an additional rider. Keep in mind that this won’t cover standard wear and tear and may require physical damage necessitating repair or replacement to receive coverage.
• Home-based business: If you work from home, your renters insurance typically won’t cover equipment your company owns or liability for fellow employees and customers, but it can with specific business riders.
• Scheduled property: Select items such as jewelry, fine art or expensive clothing are typically covered but may be subject to a sublimit. For example, if you have $50,000 in total personal property coverage and a 5% per-item limit, the maximum reimbursable amount for a single item is $2,500, minus your deductible. Consider purchasing a scheduled personal property rider for an additional cost to insure these items for their full value.
• Building additions/alterations: Some costs may be reimbursable if you pay for improvements or installations out of your pocket due to a covered loss.
• Identity theft protection: Some renters insurance policies may offer identity theft protection that can cover recovery costs after falling victim to credit card theft or check forgery.
• Food spoilage: Your insurer may cover food spoilage due to a covered loss, such as food in a fridge spoiling because of a fire-caused power outage.

What Isn’t Covered by Renters Insurance?

Below, we list several types of losses that renters insurance companies will not cover. However, you can often purchase a separate insurance policy or add an insurance rider to your insurance to gain that specific coverage for non-covered losses.

Earthquakes and Floods

Since earthquakes and floods usually aren’t covered in a standard renters insurance policy, you’ll likely need to buy a separate earthquake insurance policy for coverage. For example, renters in earthquake-prone states, like California, may want to consider buying earthquake insurance.

Roommate's Belongings

Your roommate's belongings are only covered if listed in your renters insurance policy but this is usually discouraged. In general, roommates typically have separate insurance policies unless they are family members or a couple.

Car Theft or Damage

Renters insurance does not cover your vehicle if it's stolen or damaged — look to your auto insurance policy for coverage or consider bundling your renters and auto insurance, which may result in lower rates. However, your renters insurance may extend coverage to your personal belongings if they are stolen or damaged while inside your car.

Replacement Cost Value

Most insurers will replace your personal items at their actual cash value (ACV) – the item's value after depreciation. However, a check for the item's ACV typically won't be enough to cover the cost of buying it off the shelf today. Replacement cost coverage is typically available for about 10% more, which covers replacing the item at today's price tag.^[1]

Property Damage to the Building Structure

Renters insurance covers only your personal belongings – not the rental unit itself. Damages to the building structure, such as the roof, walls and foundation, would be your landlord's responsibility.

Gradual Damage

Your renters insurance covers you for sudden accidents as opposed to a peril that gradually becomes an issue, such as mold destroying your property or normal wear and tear. For example, your insurer would cover an electronic device if it was lost in a fire but not if it stopped working due to wear and tear over 10 years.

Personal Medical Expenses

While renters insurance will typically cover injuries to others that you can be held liable for, that coverage doesn’t extend to your own injuries. Your health insurance will cover personal medical expenses, so ensure you have enough coverage to protect yourself if you become injured and need treatment.