What Does Renters Insurance Cover, Not Cover, and How Does It Work?
Learn why renters insurance is a smart move to protect your belongings.
You’ve likely heard of homeowners insurance, but renters deserve some love too. If there’s a fire or someone robs you, renters insurance will replace your stuff at its current market value—from your clothing to that TV you splurged on.
What is renters insurance?
Word to the wise: Your landlord's insurance doesn’t cover your belongings, so getting renters insurance is a smart move.
Renters insurance comes in handy if:
- Something happens to your personal property. If smoke or other perils damage your belongings, or if your property is stolen, renters insurance may cover your loss. In insurance-speak, a “peril” is a specific risk or cause of loss named in your insurance policy.
- You need to split the scene because your place becomes uninhabitable. Some policies cover your additional living expenses if you need to temporarily live somewhere else.
- Someone gets hurt in your home and you’re found legally liable. Some policies will pay your legal fees and any claims to the person who was injured.
What does renters insurance cover?
Read the renters policy you’re considering to understand which perils are covered. Most policies cover damage caused by:
- Fire and smoke.
- Vandalism.
- Hail.
- Explosions.
- Riots.
An open-perils policy will cover nearly any scenario, as long as it isn’t specifically excluded from the policy. Be sure to consult your policy for exceptions and exclusions.
Smart Tip: After purchasing your policy, take an inventory of your belongings. Take photos and store them—along with any appraisals of items—online or in another safe spot, outside of your covered home. Better yet, use an app like Sortly. That way, if you need to submit a claim, you’ll have quick access to all the information you need.
Does renters insurance cover flooding?
Damage caused by floods is not covered by renters insurance. If you live in an area that’s prone to flooding, talk to your agent about getting a separate policy to cover floods.
Does renters insurance cover earthquakes?
It depends where you live. Renters insurance doesn’t cover earthquake damage in California. If you live in the Golden State, you’ll need to buy a separate unique insurance policy that covers earthquake damage. In other states, however, you can add the optional coverage to your renters insurance policy. If your home is at risk of earthquake damage, talk to your agent about how best to have coverage in your area.
Does renters insurance cover theft?
Most policies cover theft. In fact, an all-perils policy covers a theft of your belongings almost anywhere it might happen (again, there are always exceptions, so discuss those with your insurer). So if someone swipes your laptop in Madrid, you’re covered!
How does renters insurance cover items in my storage unit?
If you have a renters policy, it might cover belongings in your storage unit, whether the unit is right down the street or in another state. Some renters policies limit coverage, however, to a percentage of your total personal property coverage, but you can opt to pay more to increase your coverage. You can buy a separate unique policy just for storage units.
How much renters insurance do I need?
Tally the value of your belongings. Most policies have limits on how much you can be reimbursed for valuables—such as jewelry and collectibles—so if you want full coverage for your collection of vintage guitars, ask your agent about getting special coverage.
If someone gets hurt on your property, keep in mind that you could end up in court. While $100,000 in liability coverage is standard, some experts suggest boosting that limit, to perhaps $300,000. You’ll get extra peace of mind, and your premium will likely increase.
How does renters insurance work?
If you need to submit a claim, it works like this:
- Contact your landlord and the police to report your losses.
- Contact your insurer to find out if your losses are covered. Have your policy number handy, as well as information about the incident—including when it happened—and an estimate of your losses. Also, ask how quickly you need to submit your claim. Prompt filing can help improve your insurer’s investigation into your claim.
- Document your losses. Make a list of all stolen or damaged items and take photos of damaged belongings. Don’t throw any damaged items away, in case a claims adjuster needs to inspect your home or property.
- Complete a claims form listing each item and including copies of any receipts you have.
- Submit your claims form to your insurer. This will kick off your insurer’s review process.
- Your insurer will let you know whether your claim has been approved. If you’ve followed the process properly, your claim might be approved. However, claims are denied under some circumstances.