What Does Renters Insurance Cover Or Not Cover?
By Martin Dasko
Published on June 9, 2020
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What Does Renters Insurance Cover
What does renters insurance protect?
What’s not protected by renters insurance?
You likely have many questions about renters insurance.
You’re going to find the answers here in this article as you look to find the perfect renters insurance policy for your situation right now.
I recommend you start your journey with a free renters insurance quote by state.
What you need to know about what renters insurance covers in 2021...
We originally published this article in 2020 and life has changed drastically in the last year for many of us, especially when it comes to working from home growing in popularity.
There have been climate issues in some places (such as the deep freeze in Texas this February) and many folks have had to rely on renters insurance for the first time ever to get by.
Consumer Reports released the following information in an article about what renters insurance covers.:
"If disaster or damage to your home forces you to move elsewhere temporarily, such as a hotel or another rental unit, the coverage can pay for those additional living expenses, including the cost of meals, for a certain period of time or up to a dollar amount."
It's important to note that renters insurance would provide you with a place to stay along with covering your food bills to help ease the burden of dealing with a disaster.
In the past you may have not thought about what you do if you couldn't live in your own unit. Hopefully, the events of the last little while have convinced you to start thinking about what you would do if you couldn't stay at home.
Keep on reading more to find out about what property insurance covers.
You finally got around to looking into renters insurance for your new place. You’re ready to move in and to get your insurance finalized.
You’re just not sure of how much protection you're going to have with renters insurance.
You’re not fully aware of the liability and coverage for renters.
You may not even know, 'What is renters insurance?'
You want to know about the disasters and accidents covered by your policy since you’ve thought about all kinds of unique scenarios in your head.
If you’re anything like me, you think of the worst-case scenario always for some reason.
You wonder about what would happen if you were to trip over something or if you were to have your laptop get stolen when you go out to the grocery store.
Let’s look at what renters insurance covers and doesn’t cover so that you know how much protection you have.
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Renters Insurance And Personal Property Coverage
So what does renters insurance protect? What does renters insurance not protect?
This summary of what renters insurance covers provides a quick overview with what to expect from your renters insurance policy:
“Renters insurance covers your personal property if it is damaged or stolen, medical and legal bills if you are found liable for damaging someone’s property or injuring them, and temporary living expenses if your rental home is currently uninhabitable.”
Your renters insurance will protect your personal property in many different ways.
Your valuables in your apartment under your policy are covered.
Your valuables outside of your home (in your vehicle, in your suitcase while traveling, or in a storage unit) are covered.
There are a few things that you need to know about your renters insurance and personal property coverage first.
You want to ensure that you know how much protection you’re getting for your damaged or stolen items.
This is why we have to discuss actual cash value and replacement cost coverage.
This article on CNBC explains the differences in personal property coverage succinctly:
“Say you paid $1,000 for a laptop three years ago, but it’s worth a lot less now. Replacement coverage would give you enough for a new laptop. With actual-value coverage, you’d only be paid what the laptop is worth today, which may not be much.”
What about “named perils” compared to “all risks?”
“Named perils” is a specific risk that you outline in your policy. “All risks” is the opposite and it’s assumed that all risks are covered by your insurance policy. We dig more into what’s covered and what isn’t covered by your insurance policy later in this article.
Here are a few other tidbits about what renters insurance could cover that could save you money:
- Spoiled food in your fridge could be covered by your renters insurance policy if damage to the unit would cause your fridge to function properly.
- Your valuables outside of your apartment when you have your tablet stolen from a suitcase while traveling.
- Storage unit coverage for possessions under your policy is available for the items that you’ve put away.
Now it’s time to look at the other side of renters insurance to see what additional financial protection you have with your insurance policy.
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Personal Liability Coverage and Medical Expenses
As you research liability and coverages for renters to see what renters insurance covers, you may be surprised by the following information that I found about personal liability on this article at Forbes:
“Like homeowner’s insurance, renter’s insurance includes liability coverage – so if someone is injured in your home, the cost of their care and of legal proceedings regarding their injury is covered up to your policy’s liability limits, which is typically $100,000.”
Personal liability with renters insurance is where you’re protected the most financially.
You see, replacing a laptop that gets stolen is one thing, but getting protected from potential lawsuits, medical bills of guests, and damages caused to other units is where renters insurance is really beneficial in covering your finances and preventing you from going bankrupt.
Personal liability coverage will give you coverage for any bodily harm or physical property damages that are caused where you or members of your household are considered responsible for.
In other words, you’re protected if your kid accidentally causes damage to a neighbor’s property.
What about medical expenses?
What do these have to do with renters insurance?
I know that it’s not exciting to talk about the worst case scenario, but we can’t escape the reality that anything can happen when someone comes over to visit us for dinner or for a social gathering.
Your renters insurance isn’t just about your laptop or tablet in this case.
Your renters insurance will cover your personal liability in the event that something were to happen to a guest at your place.
There are extreme situations where someone could have a freak accident.
There are also common scenarios where someone can cut a finger while preparing food for dinner or fall off a chair.
Pro Renters Insurance Tip
Renters insurance doesn't just cover the replacement of your belongings, but also protects you if someone gets hurt on your property. Limits usually start at $100,000.
As you know, medical expenses aren’t cheap. If anything were to happen to you or a guest at your place, you would be on the hook for the medical expenses.
This could easily add up to thousands of dollars. Renters insurance covers your medical expenses and the medical expenses of your guests.
The insurance would also cover your personal liability so that you wouldn’t have to worry about being sued by a guest or someone who was injured while at your place.
You might be thinking that this doesn’t apply to you, but there are a variety of ways a guest can incur medical expenses while getting injured at your place:
An intoxicated friend trips over something and gets hurt.
A contractor hired to do work on your property can trip over a rug.
Your dog bites someone who then has to go in for X-rays in the emergency room.
While we hope for the best when we have guests over, anything can happen.
You want to be protected so that you’re not responsible for thousands of dollars in medical bills. Renters insurance will protect you and your future assets.
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What Are Some Named Perils Your Renters Policy May Cover?
We briefly touched upon named perils vs all risks earlier. You may be wondering about the named perils your renters insurance policy may cover.
Let’s go over a few common questions here so that things are clear about the named perils that your renters insurance policy may cover...
Does Renters Insurance Cover Theft?
Yes. If there’s a theft at your home, your storage unit, or your car, renters insurance will cover you depending on the policy.
Does Renters Insurance Protect Against Natural Disasters?
No. You’re generally not protected against natural disasters unless you put that into your policy (this would cost you more).
Is Loss of Use Coverage Included In Renters Insurance?
Yes it is. This means that you would be covered if you had to stay in a hotel where you had to eat take-out due to a lack of a kitchen. Renters insurance and additional living expenses (ALE) will give you a place to stay in the event that you can’t stay at your unit due to certain types of damages as stated in your policy.
Does Renters Insurance Cover Flooding?
No. It’s tough to find an insurance policy that covers flooding.
Does Renters Insurance Cover Fire Damage?
Yes. You would be covered if a cooking fire in the kitchen or a candle accidentally caused damage to your unit or the units around you. The coverage extends from replacement costs to giving you a place to stay when you can’t live in your place.
Does Renters Insurance Cover Water Damage?
It depends on the water damage. While you may not be covered in the event of a flood, you would be covered if you accidentally left the water tap running or if your bathtub leaked into the unit below you.
It’s important to remember that every renters insurance policy is different depending on your budget, where you live, and the type of unit that you live in.
You’re going to want to take some time to go over your policy to see if you would like to make any modifications or if you notice anything that needs to be addressed.
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Other Renters Coverage Options
What are some other renters coverage options to consider as you search for the perfect policy?
This will depend on your belongings. Some of us don’t own many things. Some of us own a lot of prized possessions that may have been passed down as family heirlooms
Here are some other renters coverage options to consider:
- Do you own any expensive art?
- Do you plan on using a piece of your unit for business purposes?
- Do you have a pet?
- Would you like to be covered in the event of a natural disaster?
- Do you own any technology that’s over the current coverage limit?
Please keep these questions in mind as you shop around for insurance policies.
What Renters Insurance Does Not Cover?
You know what renters insurance covers so now it’s time to look at what won’t be covered. According to Business Insider, there’s one important thing to keep in mind with your expensive possessions:
“Renter's insurance typically only covers items up to a specific limit. For example, Policygenius says that coverage limits for electronics are often $2,500, while jewelry coverage limits are usually even lower at $1,500.”
So this means that if you upgrade your desktop and now it’s worth over $5,000, you may not be covered for it if it were to get damaged. You may have to purchase additional coverage.
What Does Renters Insurance Not Cover?
While your renters insurance will protect you in many cases, it’s important to look at what’s not covered:
Flooding (unless it’s a pipe) or other natural disasters (like an earthquake).
The structure of the unit. The landlord needs to have insurance for the actual property since your insurance will only cover you.
Property that belongs to a roommate not listed on the policy.
A place to stay if your unit were to have an issue with bed bugs.
Items that you never included when you signed up for your renters insurance. If you forgot to include your tablet when you enrolled in your insurance plan, you won’t be covered.
What Is Not Protected Under Renters Insurance?
There are also a few key important factors to look at with your renters insurance. You may have a limit on some of your expensive items (art pieces, technology, and so on).
Here are some scenario thats are not protected under renters insurance:
Liability from an automobile accident. You need auto insurance for this.
Any intentional property damage or bodily harm caused by you or someone on your policy.
Anything that you lose or misplace. For example, your laptop would get replaced only if it’s stolen and not if you forget it at the coffee shop.
Anything belonging to a roommate who isn’t on your renters insurance policy.
It’s important that you go over all possible scenarios on your own. As your life changes, your policy should change. When you go from a single bachelor to married with children, you’re going to need to upgrade your policy.
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Property That May Not Be Protected By Renters Insurance
Just so that you know what to expect, let’s go over some popular items to see what property may not be covered by renters insurance.
Will Renters Insurance Cover a Broken TV?
It will depend on how the TV was broken. If fire caused the damage or if your TV gets destroyed during a break-in, then you may be covered.
If you drop your TV by accident when moving, then you may not be covered.
Does Renters Insurance Cover Storage Units?
Yes, but to an extent. Your items may not be fully covered in a storage unit. If you plan on keeping expensive items in your storage unit, you’re going to want to see if the storage company offers an insurance plan.
Does Renters Insurance Cover Dog Bites?
It depends on your policy. You have to include your dog in your insurance policy. Please keep in mind that certain types of dogs aren’t approved by most insurance plans.
Does Renters Insurance Cover Bed Bugs?
No. Most renters insurance policies won’t cover bed bugs.
Does Renters Insurance Cover Tenant Damage?
Renters insurance covers you and anyone that visits your home when it comes to personal liability. However, you’re not protected if you sublet the unit or if you have any roommates living with you who aren’t listed on your policy.
Does Renters Insurance Cover Accidental Damage?
It depends on the situation. For example, if you break the door handle by accident, your renters insurance may not cover this. Your landlord will require you to pay for the damages caused to the structure of the unit.
Does Renters Insurance Cover Damage To Landlord’s Property?
No. Your landlord will need their own insurance policy to cover the structure of the unit.
Does Renters Insurance Cover Car Damage?
No. You need auto insurance for any damage that occurs to your vehicle.
Once again, it’s critical that you go over our renters insurance policy to see what’s covered and what isn’t covered. You might have to make some modifications to your policy.
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Take Action!
We did our best to cover everything about what renters insurance does cover and doesn’t cover.
Now that you know everything there is about coverage, you should think about how to get renters insurance.
It’s important that you go over your policy to make any necessary modifications depending on your situation.
You’re going to want to clearly know what your renters insurance covers and what renters insurance doesn’t cover so that you know what level of protection you have.
You owe it to yourself to protect your valuables and your finances.
You want to have that peace of mind knowing that you’re insured so that a break in or an injury won’t destroy you financially.
Thanks for pointing out that renter’s insurance can help protect your personal property in several different ways. I am thinking about renting a house while I get my Master’s so that I can be closer to school. I think it would be best to make sure I get renters insurance just in case something unexpected happens while I am there, and so I can have the peace of mind that a lot of my property is protected.
I would 100% recommend getting renter’s insurance. That coverage and peace of mind is worth it. You want to ensure that your personal belongings (laptops, school materials, and so on) are covered and that you would have somewhere to stay in the event of any issues.