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What does renters insurance cover?

Fact-checked with HomeInsurance.com

If you’re renting, you may wonder if you need any insurance. After all, the apartment or home you’re renting isn’t yours. Chances are your landlord has insurance to cover the property, but the landlord’s insurance coverage doesn’t protect your belongings if they’re lost or stolen. This article answers the questions, “what is renters insurance?” and “what does it cover?”

What is renters insurance?

Renters insurance covers you and the contents of your rental home or apartment if there’s a fire or a burglary, for example. Insurance expert Laura Adams explains, “A landlord isn’t under any obligation to insure your personal belongings, it’s up to you. An average two-bedroom apartment could easily contain more than $20,000 in personal property.” Renters insurance is fairly inexpensive — far less than the cost of replacing your valuables. 

What does renters insurance cover?

Renters insurance doesn’t protect you against everything. Here’s a closer look at the most common coverages you’ll get with renters insurance.

Personal property

The easiest part of renters insurance to understand is personal property coverage. Renters insurance steps in to repair your personal items if they’re damaged, or reimburse you for the cost of replacing them if they’re lost or can’t be repaired. Take inventory of your belongings and estimate what they’re worth to make sure you have enough coverage.

When deciding on a renters insurance policy, you have two options on how you’d like to be paid for losses — actual cost or replacement cost value. Actual cost value would pay you for the current value of your item, taking into account if the item is older and deducting what it’s worth according to age. Replacement cost value pays you for the cost to replace the item with a new version.  

Liability

The liability portion of your renters insurance protects you if you’re responsible for someone’s injury or damaging someone else’s property.

As Adams explains, “Getting into a lawsuit may not be something you expect, but it’s one of your most significant financial risks. If a visitor gets injured or you (or a member of your household, including pets) accidentally hurt someone or their property, you’re covered up to your renters insurance liability limits. It pays to resolve claims and have a legal defense.”

Medical payments

If someone falls and gets hurt in your home or your dog bites a guest, medical payments coverage pays for the third party’s medical bills.

Loss of use

Imagine there was a fire in your rental’s kitchen. Your landlord tells you it will take 6 weeks for workers to fix the damage to your kitchen and get rid of the smoke damage throughout your apartment. Loss of use will pay for temporary living expenses for the duration you are unable to live in your rental.

Adams indicates, “Another benefit of renters insurance is additional living expenses. It covers a portion of your hotel and meals if you’re unable to live in your rental after a covered disaster. Fortunately, the average cost of a renters policy is $188 per year, a bargain for the protection you get.”

Theft

If someone breaks into your home, your renters insurance covers the loss of your items from theft. The good news is, the coverage expands beyond the four walls of your rental. If items are stolen out of your car or elsewhere, your insurance will cover the theft.

What does State Farm renters insurance cover?

Regardless of whether you choose State Farm, Geico or any other insurance company, nearly all provide the same basic coverages.

What does renters insurance not cover?

Now that you have a better idea of what renters insurance covers, take a look at the most common exclusions and what you can do about them. 

Jewelry

If you have expensive jewelry such as an engagement ring, diamonds or heirloom watches, your renters insurance likely limits coverage on them. You would need to buy a rider to list and cover the more expensive items. Be sure to photograph the items and provide your insurance company with a receipt of what you paid for them. If the high-value jewelry were gifts, you may need to have them appraised to determine value.

Collectibles

Art and collectible items, such as coins or stamps may not be covered by your home insurance. As with jewelry, you would need to buy a rider for the items and have them professionally appraised to set a value on the collectibles.

Your roommate’s property

A renters insurance policy doesn’t cover everyone living in the rental. Your immediate family that lives with you is included, but roommates are not. They would need to purchase their own renters insurance or you can add them (and the value of their property) as additional insured on your policy.

Adding additional coverage

Besides additional insureds and riders, there are other optional coverages you can buy to expand on your renters insurance:

Water backup

Plumbing-related issues can be expensive to fix. Many standard policies don’t cover a number of plumbing-related issues. Water backup coverage pays for the cost of damages and repairs due to backed-up drains or sewers within your rental.

Personal injury

Personal injury coverage goes beyond a home-related event. It pays for your legal defense and damages if you’re sued for libel or slander which causes damages to a person’s or company’s reputation.

Earthquake or flood 

Both earthquakes and flooding losses are excluded in standard renters insurance. You’d need to buy additional coverages to protect your property against either event.

What to do before buying renters insurance

Before buying renters insurance, you’ll need to do a little preparation to ensure you make the best decision. Start by doing an inventory of the items in your home and their value. You’ll want to have a ballpark estimate of how much renters insurance you’ll need for adequate coverage. 

If you have high-value items such as designer handbags, watches, collectibles or jewelry, you will need to collect receipts showing the value of the items or have them appraised. You’ll need to add high-value items under an additional rider.

You might even video or photograph all your items and note any serial or identifying numbers in an inventory list, along with the cost of the items. Keep the inventory in a safe place in case you need it to file a claim in the future.

Get quotes from a few insurance companies to compare the cost of renters insurance. Weigh the price difference between replacement coverage and actual value to determine if the extra cost of replacement value insurance is worth it. 

Lastly, compare the price difference if you choose a higher deductible. You may save money, but make sure you can afford to pay the higher deductible upfront in case of a claim.

The takeaway

  • Landlord insurance only covers the physical structure of your dwelling. 
  • Renters insurance pays for losses or damages to your items and for incidents that happen within your rental.
  • Before you look for renters insurance, calculate the cost of your valuables to know how much insurance you need.
  • Some items, such as high-value jewelry and watches, are not covered by a standard renters insurance policy and must be accounted for under a rider.

Conclusion

Renters insurance isn’t mandatory, but the cost of replacing your belongings if someone breaks into your home or there’s a fire will be far more expensive than your insurance coverage. According to Adams, “the average cost of a renters policy is $188 per year, a bargain for the protection you get.” Knowing this, having renters insurance is a smart decision to protect you financially if something unforeseen happens.

Cynthia Paez Bowman

Writer

Cynthia splits her time between Los Angeles, CA and San Sebastian, Spain. She travels to Africa and the Middle East regularly to consult with women’s NGOs about small business development.

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