Standard renters insurance typically covers personal belongings, liability, and additional living expenses. However, many insurance providers offer customizable plans if you want to adjust your coverage limits or add optional upgrades, such as flood or earthquake protection. Here’s what you need to know.
What renters insurance typically covers
Personal property
Your personal belongings are often covered against damage or theft in most renters insurance policies. Keep in mind that you can’t be reimbursed more than your coverage limit, even if a damaged or stolen item is worth more.
Liability
Most renters insurance policies include liability coverage to protect you in situations where you may be held liable for damage or other expenses. For example, you could accidentally damage someone’s property, or a guest could get injured on your property, and you may have to pay their legal or medical bills.
Additional living expenses (ALE)
This coverage can help you find a temporary place to stay if your rented home becomes uninhabitable for a covered reason. For example, if the rental property suffers fire damage, ALE coverage could reimburse you for hotel or short-term rental expenses.
Covered perils
Included coverage varies by policy and provider, but these are commonly covered perils:
Keep in mind that “vandalism” in this case typically refers to any of your personal belongings being vandalized or damaged. Vandalism to the actual rental property structure should be covered under your landlord’s insurance policy.
Learn more: Does renters insurance cover mold?
What renters insurance does NOT cover
In general, a standard renters insurance policy likely won’t cover these items or situations:
-
Floods: While water damage from plumbing or an AC unit may be covered, standard renters insurance policies don’t often include flood protection.
-
Earthquakes: Similarly, earthquake coverage is often an optional add-on.
-
High-value items: Certain items, such as gold and jewelry, may have maximum standard coverage limits, so you may need to increase your limits or purchase an upgrade for additional coverage.
Coverage limits explained
Renters insurance coverage limits fall into two categories: overall policy limits and specific item limits.
Policy limits
Your policy limits are the maximum amounts your provider will pay for each type of coverage.
For example, if your plan includes $10,000 of personal property protection per occurrence, you may receive up to that amount per covered event. This doesn’t mean you will automatically receive $10,000 if an item is stolen or damaged, as it depends on how your plan calculates item value and replacement cost.
Item limits
Depending on your policy, you may have coverage limits for specific items. This could include limits on high-value items, such as gold, jewelry, art, and collectibles.
If you have an item that has a specific coverage limit, it would follow the rules of that limitation rather than your overall policy limit.
Optional add-ons
Standard renters insurance protection doesn’t cover everything, but most providers offer upgrades you can add for an increased rate. Here are some examples of optional add-ons:
-
Scheduled personal property (high-value items): Covers specific, appraised items, such as engagement rings and antiques.
-
Identity theft protection and restoration: Helps protect you against identity theft. If you also have restoration coverage, it helps pay for related expenses, such as lost wages and legal fees, if someone steals your identity.
-
Flood insurance: Provides protection against flood damage.
-
Earthquake insurance: Provides protection against earthquake damage.
-
Personal umbrella policy: Provides additional liability coverage above what you may already have through your renters insurance policy.
How much coverage do you need?
The primary components of renters insurance are personal property protection, liability coverage, and additional living expenses. Each of these has its own coverage limits that you’ll have to choose, though some may be easier choices than others.
For example, with personal property protection, you can inventory your belongings and estimate the cost to replace them. That will give you a quick and easy estimate of how much coverage you may need for this part of your policy.
For liability coverage, it’s not easy to estimate the necessary coverage, as liability expenses can rise into the hundreds of thousands. You will have to use your best judgment in this case, balancing how much risk you want to take on with how much you’re willing to pay toward premiums.
For additional living expenses, you may be able to calculate a rough estimate of how much it might cost to live in a nearby hotel or other type of lodging if your place becomes uninhabitable. For instance, if it’s going to cost $4,000 per month to live in a hotel and you want at least two months of coverage, you would need at least $8,000 in additional living expenses.
What does renters insurance cover? FAQs
What are three things that renters insurance typically does not cover?
Renters insurance typically doesn’t cover flooding, earthquakes, or the full value of high-value items.
What are the most common renters insurance claims?
Common renters insurance claims include:
How much is $100,000 renters insurance a month?
It depends on the policy, but some insurance companies include $100,000 in liability protection for as low as $8 per month.
Read more: How much is renters insurance?
What are the disadvantages of renters insurance?
Renters insurance doesn’t typically include protection against natural disasters or cover property that doesn’t belong to you, such as a roommate’s belongings. In addition, your policy may not provide enough coverage for high-value items, such as jewelry and art.
Do landlords like when you have renters insurance?
They most likely do because it’s additional coverage that protects the landlord from certain legal disputes and financial risk. With renters insurance, the tenant has their own protection for their personal belongings and takes on liability for guest injuries or negligent property damage.
