Renters Insurance Coverage: A Complete Guide

Renters insurance can pay off in a disaster, but it doesn't cover everything.
May 26, 2022

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Key takeaways

  • A renters policy covers your belongings if they’re stolen or destroyed. It also pays out if you cause harm to other people or their property.

  • Renters insurance covers disasters such as fire, theft and windstorms, but generally doesn’t cover flooding or earthquakes.

  • You can often add renters insurance coverage for things like identity theft and valuable jewelry.

One of the perks of renting is that it’s your landlord’s responsibility, not yours, to insure the building and make repairs. But as a tenant, you’re not off the hook completely. Your landlord’s insurance won’t pay to replace your belongings if a storm destroys the building or a thief breaks into your apartment. If you want coverage for these and many other disasters, you’ll need a renters insurance policy.

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What is renters insurance?

Renters insurance covers your personal belongings in case of theft, fire and other disasters. It can also pay your legal expenses if you’re sued for causing harm to others.

Also known as tenants insurance or an HO-4 policy, renters insurance is similar to homeowners insurance but designed for people who don't own their own place. At about $14 a month on average, renters insurance is much cheaper than homeowners insurance, according to NerdWallet’s rate analysis. That's because it covers what’s inside your home only and not the structure.

What does renters insurance cover?

A standard renters policy includes four types of coverage.

Type of coverage

What it does

Covers your clothing, furniture, electronics and other belongings.

Pays for hotel stays, restaurant meals or other expenses if you have to live elsewhere while your home undergoes covered repairs.

Pays out if you're responsible for injuries to other people or damage to their property.

Medical payments

Covers injuries to other people in your home, regardless of fault.

Personal property

Most renters insurance reimburses you for the loss of items such as clothing, smartphones and other personal belongings due to 16 specific events:

  • Fire or lightning.

  • Windstorm or hail.

  • Explosion.

  • Riot or civil commotion.

  • Damage caused by aircraft.

  • Damage caused by vehicles.

  • Smoke.

  • Vandalism or malicious mischief.

  • Theft.

  • Volcanic eruption.

  • A falling object.

  • The weight of ice, snow or sleet.

  • Accidental discharge of water or steam from within certain household systems or appliances.

  • Sudden and accidental tearing apart, cracking, burning or bulging of certain household systems.

  • Freezing of certain household systems or appliances.

  • Certain sudden, accidental damage from artificially generated electric currents.

Your personal belongings aren’t just covered when they’re in your home, but also when you’re out and about. So if your bike is stolen outside a store, your renters insurance policy will cover you — with a couple of caveats. First, your deductible will apply. Second, there may be a limit on how much coverage you have outside your home (typically 10% of your total personal property limit).

Example: Lightning hits your apartment building and starts a fire that burns through your living room. Your renters policy will pay for damaged belongings, such as your couch and TV, minus your deductible.

Loss of use, or additional living expenses

If you can't live in your home after a disaster covered by your policy, renters insurance coverage generally pays for you to live elsewhere during repairs. It can cover expenses like hotel bills, restaurant meals and other costs above what you would normally pay.

Example: After the fire in your living room, you need to move out for a couple of weeks while your apartment is cleaned up and fixed. Your insurance company can help pay for your motel stay. It can also cover the cost difference between making your own meals (as you normally do at home) and eating out every night (as you do while you're living at the motel).

Liability insurance

If someone is injured in your rental and sues you, a lawsuit could wreck your finances for years. The liability portion of your renters insurance policy covers you in these events, paying out for someone else’s bodily injury on or off your property. (One exception: If you injure someone in a car accident, your auto policy would handle the expenses.)

Renters liability insurance also covers damage you and your family accidentally do to others' belongings.

Your renters policy may pay out if your dog bites someone. However, some insurers exclude dog bites or certain breeds from renters policies. If you have a dog, check with your agent to be sure you’re covered.

Renters insurance typically covers legal representation in a lawsuit and any money awarded to the other party.

Example: You start filling your tub for a bath, then get distracted by an argument between your kids. By the time you get things settled down, your tub has overflowed. The water seeps through the ceiling, ruining a leather sofa in the apartment below. Your downstairs neighbor sues you. Your renters policy could cover your legal bills plus the $2,000 awarded to your neighbor for the loss of her couch.

Medical payments

Like liability insurance, this coverage pays out if someone is injured on your property. What's the difference? Medical payments coverage will pay no matter who’s at fault for the injury, while liability insurance is triggered only if you’re found responsible. Liability coverage also tends to have much higher limits.

Example: A visiting friend trips over your son's toy truck and lands on her wrist. Luckily it's just a sprain, but your medical payments coverage can reimburse her for her X-ray and urgent care appointment.

Optional renters insurance coverage

In addition to the standard coverage listed above, you can usually pay a little extra to customize your policy with endorsements that add more coverage. Here are a few of the most common.

Replacement cost coverage

A standard renters policy pays to replace your belongings based on their “actual cash value.” That means if your ruined sofa is 10 years old, your claim check would probably only be enough to buy a used sofa. To get a new one, you’d pay the difference yourself.

With replacement cost coverage, you’ll get the cost of replacing your lost items with new ones.

Scheduled personal property

Renters policies typically cap the amount they’ll pay for valuable items such as jewelry, firearms and electronics, particularly when it comes to theft. To get coverage for items that are worth more than this limit, you may want to add a scheduled personal property endorsement.

Say you’ve inherited a diamond ring from your grandmother. Your insurance company will likely ask you to get it professionally appraised and then add separate coverage for the ring onto your policy (for an extra cost).

Below is a list of items that are often covered only up to a specified amount. (Read your policy or ask your agent for the exact limits.)

Electronics.

Firearms.

Furs.

Items used for business purposes.

Jewelry and watches.

Money, gold and coins.

Silverware, goldware and pewterware.

Watercraft and trailers.

Identity theft coverage

Some insurance companies offer optional coverage for expenses associated with identity theft. This may include credit monitoring services, coverage for legal fees and help replacing your documents.

Water backup coverage

You may be able to add coverage for damage if your sink, toilet or other drain backs up, sending water gushing into your apartment.

Pet damage liability

If your furry pal can be a little destructive — think accidents on the carpet or claw marks on the walls — you may want to ask if your insurer has a pet damage endorsement. This can help with cleanup or repair costs so you don’t have to sacrifice your security deposit when you move out.

What renters insurance doesn’t cover

Every insurance policy has exclusions, and renters insurance is no exception. Below are a few things renters insurance won’t pay for.

Flood damage

Most renters insurance won’t cover damage from flooding. If your home is at risk, you’ll have to pay for repairs yourself or purchase separate flood insurance for renters. (One exception is USAA, which includes flood coverage as a standard part of its renters policies. USAA renters insurance is available only to active military, veterans and their families.)

🤓Nerdy Tip

You can get flood insurance that’s backed by the federal government or buy coverage through an independent company. Learn how to find the best flood insurance.

Earthquake damage

Earthquakes also won’t be covered by the majority of renters insurance policies. (Again, USAA is an exception.) You can buy earthquake insurance separately or as an add-on to your renters policy.

Infestations

Most renters insurance won’t cover bedbugs, mice or other infestations.

However, you may be able to get bedbug coverage with an Assurant renters policy, depending on where you live.

Another option is Jetty, which offers insurance only at participating properties but includes $300 worth of bedbug coverage in its basic policies. EPremium and eRenterPlan may also provide bedbug remediation coverage in their renters policies if you live in participating rental communities.

Your roommate’s belongings

Most renters insurance won’t cover your roommate’s stuff unless the two of you share a policy, which not all states or insurance companies allow. In most cases, it’s best if you each get your own renters policy.

How much renters insurance do I need?

The amount of renters insurance you need depends on how much stuff you have and what your savings and other assets are worth. The more you have to lose, the more insurance you need.

Before buying renters insurance, take stock of your belongings to decide how much personal property coverage to buy. Several home inventory apps are available to help you catalog your possessions. This can also be useful if you ever file a claim.

To get an idea of how much your belongings are worth, use our renters insurance cost calculator below.

Liability limits typically start at $100,000 and top out at $500,000. You’ll want at least enough to protect your current assets, including savings and any vehicles, because they're part of your net worth and could be seized in a lawsuit.

Frequently asked questions

Yes, theft of your personal belongings is typically covered by renters insurance, even if you’re not at home. For example, your phone would generally be covered if someone stole it from your pocket on the subway. Keep in mind that your deductible would be subtracted from your payout, so if the stolen item isn’t worth much, filing a claim might not do you much good.

It depends. If the cause of the water damage is a peril named in your policy, you should have coverage. For instance, damage from a burst pipe is generally covered, but damage from a flood usually isn’t (unless you have flood insurance).

Generally, yes. Just as your renters policy covers your belongings when you’re traveling, it will usually cover them when they’re stored somewhere besides your home. However, you may have less coverage for belongings stored off-premises (typically limited to 10% of the total personal property value on your policy).

It depends on the cause of the mold. Renters insurance is designed to assist with damage from sudden, catastrophic events like a burst pipe that floods your bathroom, leaving mold in its wake. This type of event would likely be covered. But if the mold has been slowly developing because you haven’t gotten around to cleaning your basement, you’re out of luck.

It depends. Say your bedroom window is shattered by a falling tree branch in a storm. Because falling objects are a covered event, the damage would be taken care of through the personal property part of your policy. But if you accidentally break your own window through an errant game of fetch with your dog, it wouldn’t be covered.

Your liability coverage can help here as well; it may pay out if you accidentally break someone else’s window.

If your car is stolen, you’ll have to file a claim under the comprehensive section of your auto insurance policy, not your renters policy. But if you had personal belongings in the car, such as a laptop or suitcase full of clothes, those would likely be covered by your renters policy.

In general, the liability portion of your renters policy would pay for medical expenses or legal costs if your dog bites someone outside your household. However, there are exceptions. Some companies exclude coverage for certain breeds or for animals who have a history of aggression.

It depends on your coverage and the type of damage. If your dog goes tearing through a friend’s house and knocks over a valuable vase with his tail, that property damage would likely be covered by your liability insurance. But Fluffy’s claw marks on your own kitchen counters would be paid for only if your policy includes pet damage coverage.

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