What does renters insurance cover?

Key Takeaways

• You can cost-effectively expand the coverage of a basic renters insurance policy by adding extra options called endorsements.
• Renters insurance does not provide coverage for damage to your car--you must purchase auto insurance for this type of protection.

When renting a home or apartment, it's easy to assume that your landlord's insurance has you covered. In most cases, their policy only protects the building itself--not what's inside your unit! This means that everything from your furniture and electronics to clothing and valuables are your responsibility to safeguard. That's where renters insurance comes in.

What does renters insurance cover?

While renters insurance can differ among companies, most policies cover three main areas:

1. Personal property coverage. If your belongings are stolen, lost damaged, or destroyed by a covered loss, renters insurance will help you recover the costs. Personal property includes everything from your furniture, books, clothing, electronics, etc.
2. Liability. If someone is injured in your rental home or apartment--for example, by tripping and falling or being bitten by your pet--and holds you legally responsible, renters insurance may help pay for medical bills and legal fees. It also provides protection if you accidentally damage someone else's property.
3. Additional living expenses/loss of use. If your rental becomes uninhabitable due to a covered event, such as a fire, renters insurance may help pay for temporary costs that can include hotel stays, meals, and even laundry, until you're able to return home.

What does renters insurance not cover?

No insurance policy covers everything. While it's important to understand what renters insurance covers, you also need to know what renters insurance won't cover.

Here are 8 common exclusions typically found in most renters insurance policies.

1. Damage due to wear and tear and negligence This coverage allows you to rebuild your home with historically accurate materials. As a renter, you are responsible for properly maintaining your residence and keeping your personal belongings safe. For example, if you leave property outside of your rental and it's exposed to the elements and becomes damaged, you will not have coverage under your renters insurance policy.
2. Damage to the building or appliances. A renter's insurance policy will not cover damage to your rental's walls, ceilings, floors, or appliances. The cost of building repairs and appliance maintenance is the responsibility of your landlord and their insurance policy.
3. Your roommate's stuff. Your renters policy only covers your personal property, not your roommates's. They will need to buy separate coverage unless you are able to specifically add them onto your policy by way of an endorsement.
4. Natural disasters. Property damage caused by floods, sinkholes, hurricanes, and earthquakes are not covered included in a renters insurance policy. For these types of events, you will likely need a separate policy or special endorsement.
5. High-value items beyond your policy limits. Renters insurance does not include coverage for expensive items such as jewelry, art, or collectibles. To have this type of coverage, you'll need to purchase additional insurance by way of a policy endorsement.
6. Vehicle damage or theft. Renters insurance won't cover damage to your car, even if it's parked at your rental! You'll need auto insurance for that. However, if personal items are stolen from your car, your renters policy may help cover the loss.
7. Business personal property. Renters insurance typically doesn't cover items used for business purposes that are stored or used in your rental. This includes job-related equipment, such as company laptops or professional tools. To have business coverage, You may need to add a business property endorsement or rider to your policy.
8. Intentional or illegal activity damage. If you deliberately damage your rental unit or somone else's property, your renters insurance policy will not cover the cost of repairs. Additionally, damage or liability resulting from criminal behavior (such as drug manufacturing, theft, or vandalism) is specifically excluded from most renters insurance policies.

It's important to note that while a basic renters insurance policy has its limitations and doesn't cover every situation, such as floods, earthquakes, or high-value personal items, many of these gaps can be filled through policy endorsements. Policy endorsements are simply add-ons that allow you to customize your coverage to fit your specific needs at a nominal cost.