What does renters insurance cover?

Key takeaways:

• If you’re a renter, you still need insurance; it’s affordable and easy to get.
• Renters insurance covers your belongings, provides liability protection, and pays your living expenses if you must live somewhere else while your rental is being repaired.
• If you have special needs (expensive items, etc.), check to make sure they’re covered or add a rider to your policy.

If you think insurance is just for homeowners, think again.

Even if you don’t own your home or condo, you still need to protect yourself and your belongings. Regardless of whether you live in a rental house, an apartment, or a dorm room, consider getting renters insurance.

While your landlord has insurance for the building in which you live, did you know their coverage does not include your personal items? If a pipe leak floods your apartment, or if your unit is damaged by smoke from a fire next door, the cost to replace your furniture, electronics, clothing, and other belongings will only be covered if you have renters insurance.

Why do you need renters insurance?

There are two reasons. First, you might think your personal items won’t cost much to replace, but you’d be surprised at how quickly things add up. And secondly, if something happens–if you cause a fire or if someone gets injured at your place–you could be held financially responsible for the damage.

Liability helps you pay for medical costs, property damage, and legal fees if you are liable for an accident that occurs in your rental unit, or if you accidentally cause damage to your building or another tenant. Some policies may even cover you if your dog bites someone.

An increasing number of landlords are requiring that you have renters insurance. Even if yours does not, the coverage is affordable and easy to get, making it a smart move on your part.

Renters insurance provides three types of coverage:

Personal property

This covers loss or damage to your belongings from things like fire, theft, and more. Coverage also applies to the loss of items that aren’t actually located in your unit. For example, if your bike is stolen from outside a coffee shop, if your laptop is taken from your hotel room, or if your sports gear is stolen from your storage unit, renters insurance will cover your loss.

Liability

Renters insurance covers more than just your property. If you leave your bathtub running and water floods the unit below you, renters insurance will cover your liability. If the pizza delivery person trips on the rug in your rental home, your renters insurance will cover their medical expenses.

Loss of use

If you need to live somewhere else while your place is being repaired from a covered loss, that's covered as well. Also called additional living expense coverage, this is designed to make sure that the additional costs associated with the inability to use your residence are covered.

What does renters insurance cover? What’s not covered?

Renters insurance policies can be structured to meet your specific situation, so be sure to get what you need.

In general, a typical policy covers: 

• Damage to your belongings in the rental unit due to fire or smoke, plumbing leaks, or other issues.
• Theft, even if the items are not taken from your home (i.e., if your camera is stolen while you’re on vacation).
• Liability for someone who is injured while in your rental unit.
• Legal expenses if you are sued for damages.
• Loss of use, paying for your stay in another location until your unit can be repaired.

Some things may not be automatically included unless you’ve added a rider or separate policy:

• Damage due to earthquake or natural flooding.
• Loss due to identity theft, or unauthorized transactions on your credit cards or bank accounts.
• Some of your expensive items – electronics, jewelry, and others – may only be covered up to a certain limit.
• Equipment taken from your vehicle will be covered, but if the item has been installed (a stereo system, for example), this will be covered by your auto insurance.

If you have a special situation, be sure to ask. It’s also a smart idea to take photos of your belongings so you have records of what you own.