What Is Renters Insurance, and What Does It Cover?
Renters insurance can help in a disaster, but it doesn't cover everything.
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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 extra 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 replace your belongings if a storm destroys the building or a thief breaks into your apartment. If you want a financial safety net for problems like these, you need renters insurance.
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What is renters insurance?
Renters insurance covers your belongings in case of theft, fire and other disasters. It can also pay your legal expenses if someone sues you.
Also known as tenants insurance or an HO-4 policy, renters insurance is designed for people who don't own their own place. The average cost of renters insurance is $151 a year, or about $13 a month, according to NerdWallet’s rate analysis. Because it covers only what’s inside your home and not the structure, renters insurance is much cheaper than homeowners insurance.
Some landlords require their tenants to buy renters insurance before signing a lease.
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 and other expenses if you have to live elsewhere while your home is repaired. | |
Pays if you're responsible for hurting other people or damaging their property. | |
Covers minor injuries to other people in your home, no matter who's at fault. |
Personal property
Most renters insurance reimburses you for the loss of personal items due to these specific events:
Fire, lightning or smoke.
Windstorm or hail.
Theft or vandalism.
Explosion.
Volcanic eruption.
Falling objects.
Weight of ice, snow or sleet.
Riots.
Accidental discharge of water or steam.
Sudden cracking, burning or bulging.
Freezing.
Sudden damage from short circuiting.
Damage caused by vehicles or aircraft.
Fire, lightning or smoke.
Windstorm or hail.
Theft or vandalism.
Explosion.
Volcanic eruption.
Falling objects.
Weight of ice, snow or sleet.
Riots.
Accidental discharge of water or steam.
Sudden cracking, burning or bulging.
Freezing.
Sudden damage from short circuiting.
Damage caused by vehicles or aircraft.
Your personal belongings are covered when they’re in your home as well as when you’re out and about. So if someone steals your bike outside a store, your renters insurance policy will cover you — with a couple of caveats.
First, your deductible will apply. A deductible is the amount of a claim you need to pay out of pocket.
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. The fire causes $10,000 worth of damage and you have a $500 deductible, so your insurance company pays $9,500.
» GUIDE: Personal property insurance
Loss of use, or additional living expenses
If you can't live in your home after a disaster your policy covers, renters insurance coverage generally pays for you to live elsewhere during repairs. It covers expenses like hotel bills, restaurant meals and other costs above what you usually 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 living at the motel).
» GUIDE: Loss of use coverage
Liability insurance
If someone gets hurt in your rental and sues you, a lawsuit could wreck your finances for years. The liability part of your renters policy covers you in these events, paying for someone else’s injury on or off your property. (One exception: If you hurt someone in a car accident, your auto policy will handle the expenses.)
Liability insurance also covers damage you and your family accidentally do to others' belongings.
Your renters policy may pay if your dog bites someone. However, some insurers won't pay for dog bites or cover certain breeds. If you have a dog, check with your agent to be sure you’re covered.
A renters policy typically covers legal representation in a lawsuit and money awarded to the other party. Renters insurance can also cover the payout if someone files a liability claim against your policy.
Example: You start filling your tub for a bath, then get distracted by an argument between your kids. By the time you settle things down, your tub has overflowed. 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.
» GUIDE: Renters liability insurance
Medical payments
Like liability insurance, this coverage pays if someone gets hurt on your property. What's the difference? Medical payments coverage will pay no matter who’s at fault for the injury, while liability insurance pays only if you're found responsible.
Liability coverage also tends to have much higher limits. For instance, it's common to have $100,000 of liability coverage and $1,000 of medical payments coverage.
Example: A visiting friend trips over your son's toy truck and lands on her wrist. It's just a sprain, but your medical payments coverage can reimburse her for her X-ray and urgent care appointment.
» GUIDE: Medical payments coverage
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, including heavy rainfall or overflowing bodies of water. If your home is at risk, you’ll have to pay for repairs yourself or buy separate flood insurance for renters.
One exception is USAA, which includes flood coverage in its standard renters policies. USAA sells renters insurance only to active military, veterans, some federal workers and their families.
You can get flood insurance backed by the federal government or buy it through a private company. Learn how to find the best flood insurance.
Earthquake damage
Most renters insurance policies won't cover earthquakes. (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 includes $300 worth of bedbug coverage in its policies. EPremium and eRenterPlan may also have bedbug coverage you can add to their policies. However, Jetty and eRenterPlan policies are available only at 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.
Does renters insurance cover... ?
This table shows common problems and whether your renters insurance policy is likely to cover them.
Problem | Covered? | Details |
|---|---|---|
Broken windows | Maybe. | The liability section of your policy may pay if you accidentally break someone else's window and they sue you. But if you break your own window, your renters policy won't help you. |
Car theft | It depends. | Auto insurance covers car theft as long as you have comprehensive coverage. But renters insurance covers personal belongings inside the vehicle. |
Dog bites | Usually. | Your liability coverage can pay for medical expenses or legal costs if your dog bites someone outside your household. But some companies won't insure certain breeds or dogs with a history of aggression. |
Items in a storage unit | Usually. | Your renters policy typically covers items stored somewhere besides your home. The cap is often 10% of your personal property coverage limit. |
Mold | Maybe. | If mold develops after a sudden event like a burst pipe, your policy may cover it. But if the mold has been slowly developing because you haven’t cleaned your basement, you’re out of luck. |
Pet damage | Maybe. | If your dog breaks a valuable vase at a friend's house, your liability insurance could cover the damage. But most renters policies won't pay to clean up destruction your pet causes in your home. |
Theft | Usually. | Renters insurance typically covers theft of your personal belongings, even from a location outside your home. |
Water damage | Maybe. | 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. |
Problem | Is it covered? |
|---|---|
Broken windows | Maybe. The liability section of your policy may pay if you accidentally break someone else's window and they sue you. But if you break your own window, your renters policy won't help you. |
Car theft | It depends. Auto insurance covers car theft as long as you have comprehensive coverage. But renters insurance covers personal belongings inside the vehicle. |
Dog bites | Usually. Your liability coverage can pay for medical expenses or legal costs if your dog bites someone outside your household. But some companies won't insure certain breeds or dogs with a history of aggression. |
Items in a storage unit | Usually. Your renters policy typically covers items stored somewhere besides your home. The cap is often 10% of your personal property coverage limit. |
Mold | Maybe. If mold develops after a sudden event like a burst pipe, your policy may cover it. But if the mold has been slowly developing because you haven’t cleaned your basement, you’re out of luck. |
Pet damage | Maybe. If your dog breaks a valuable vase at a friend's house, your liability insurance could cover the damage. But most renters policies won't pay to clean up destruction your pet causes in your home. |
Theft | Usually. Renters insurance typically covers theft of your personal belongings, even from a location outside your home. |
Water damage | Maybe. 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. |
Optional renters insurance coverage
To expand your policy, you can usually add extra types of coverage called "endorsements." 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.
With replacement cost coverage, you’ll get the cost of replacing your lost items with new ones.
Scheduled personal property
Renters policies usually have a limit on how much they’ll pay for for the theft of valuable items such as jewelry. To fully cover more expensive items, you may want to add a scheduled personal property endorsement.
Say you’ve inherited a diamond ring from your grandmother. Before offering coverage, your insurance company may ask you to have a jeweler assess its value. The insurer can then add separate coverage for the ring onto your policy — for an extra cost.
Below is a list of items that renters policies often cover only up to a given amount. Read your policy or ask your agent for the exact limits.
Electronics.
Furs.
Jewelry and watches.
Silverware, goldware and pewterware.
Firearms.
Items used for business purposes.
Money, gold and coins.
Watercraft and trailers.
Electronics.
Furs.
Jewelry and watches.
Silverware, goldware and pewterware.
Firearms.
Items used for business purposes.
Money, gold and coins.
Watercraft and trailers.
» MORE: The best cheap renters insurance
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 — ask whether your insurer can cover pet damage. This coverage can help with cleanup or repair costs so you don’t lose your security deposit when you move out.
Identity theft coverage
Some insurance companies offer optional coverage for expenses associated with identity theft. This may include credit monitoring, coverage for legal fees and help replacing documents. Learn more about identity theft insurance.
How much renters insurance do I need?
The amount of renters insurance you need depends on how much stuff you have, how valuable it is and what your savings and other assets are worth. The more you have to lose, the more insurance you need.
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 file a claim. Learn how to create a home inventory.
To get a quick estimate 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 assets, including savings and vehicles, because they could be seized in a lawsuit.
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