What Does (And Doesn’t) Renters Insurance Cover?

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Renters insurance covers damage to or theft of personal property, personal liability damages, emergency medical expenses for guests and additional living expenses if you need to temporarily relocate. However, your insurer will not reimburse you for every event related to these coverages, as only certain events qualify for a claim.

We recommend anyone renting a residence to consider purchasing a renters policy as an affordable way to protect against the financial impact of such events. Read on to see what renters insurance typically covers.

What is renters insurance?

Renters insurance protects tenants from the costs of unexpected personal property damage, theft and legal liability. This coverage can be bought by anyone renting an apartment, condo, home or other living space. Although the coverage is similar to homeowners insurance, key differences include:

Providers of rental insurance range from established insurance names, such as State Farm and Allstate, to newcomers like Lemonade.

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What does renters insurance cover?

Renters insurance generally provides four types of financial protection:

Combined, these coverages provide substantial financial protection against unexpected events, but it’s important to understand exactly which situations are covered and which aren’t.

Most renters insurance policies include $100,000 of liability protection, covering the costs associated with a lawsuit or damages.

Although any one person is unlikely to have a lawsuit filed against them, the damages can be extensive in the rare instance it happens. Say a visitor trips and injures themselves. They could potentially file a lawsuit against you to cover their medical bills. Or suppose your dog bites a guest: The average cost for a dog bite claim in the U.S. is about $35,000. Personal liability coverage will reimburse you for attorney fees and also any damages a policyholder might be ordered to pay a plaintiff.

One caveat is that insurance companies commonly write into their policies that it will only cover the expenses of an attorney of their choice. The attorneys appointed by insurance companies are generally experienced litigators and do work in favor of their assigned clients.

If your apartment were to become unlivable, your renters insurance will help pay for the increased costs of living out of home through additional living expenses (ALE) coverage. Like personal property coverage, ALE only applies if your dwelling becomes unlivable due to a covered loss—in other words, one of the perils covered by your renters insurance policy. This coverage is called loss of use.

Renters insurance policies include limited medical payments coverage if guests are injured in your residence. This might include their hospital stay, surgical procedures, x-rays, dental expenses and other related costs. Unlike liability coverage, the fault of the injury does not matter, so regardless of cause your guest can be covered under this category up to policy limits, which usually range from $1,000 to $5,000. This coverage extends exclusively to guests, so it won’t cover anyone who lives on the property or is listed on your policy.

In addition to the four primary coverages, renters insurance provides supplementary coverages.

There are a number of add-ons, or endorsements, a renter can add to their policy. These can increase coverage limits or cover perils that otherwise would not be covered, such as earthquakes or floods. Renters insurance policies may offer add-on coverage for more unique risks too, such as a sinkhole endorsement.

If the coverage you need is not available as an endorsement, you might need to purchase a separate policy to ensure you are adequately covered.

What does renters insurance not cover?

The personal property and liability coverage provided by renters insurance won’t protect you from all risks. For example, property damage due to floods won’t be covered and liability coverage for events related to dangerous dog breeds may also be excluded. Coverage may be limited for high-value items like jewelry. Here are some of the more common coverage exclusions and limits in renters insurance policies.

Renters insurance does not cover property damage for all risks

Renters insurance will rarely — or never — cover damage to your personal property for some specific perils, such as earthquakes, riots and pests.

Bed bugs and pests

Most renters insurance policies will not cover damage costs associated with bed bugs, with limited exceptions. Along with rodents, they are considered a maintenance issue, and not covered under your standard renters policy.

Earthquake and flood damage

Standard renters policies do not cover earthquake or flood damage, though some companies may offer an add-on. If you can’t get earthquake or flood coverage through your renters insurance policy, you can buy a separate flood or earthquake policy.

Car theft or damage

Damage or theft of your car will not be covered by your renters policy. You will need a car insurance policy with comprehensive coverage. Belongings inside your car at the time of the theft, however, are covered by renters insurance.

Roommate property

Renters insurance generally doesn’t cover damage associated with your roommate’s belongings. To be covered, they would have to be listed on the policy.

We don’t recommend adding roommates however, unless they are related or a spouse. Adding a non-relative to your policy will split coverage among all those assigned to the policy. So if your policy insured up to $20,000 in damage, you and your roommate would split that coverage for all your possessions.

Renters insurance has lower limits for expensive personal property

Renters insurance personal property coverage limits do not apply equally to high-value items. Jewelry and electronics may be covered under separate sub-limits given the high monetary risk posed by their damage or theft. If you own expensive items, make sure you buy a renters insurance policy in which you can increase sub-limits to ensure you’re fully covered.

Renters liability coverage may exclude specific incidents

Although liability insurance covers most costs related to legal liability, there are some important exceptions in the case of pets. Bodily harm caused by a pet, such as a dog bite, may fall under renters liability coverage, but policies can exclude these events in certain circumstances.

Many insurers exclude coverage for certain dog breeds — such as pit bull-type breeds or bully breeds and mixes — and may even deny coverage if you own one of their banned dog breeds. Exotic pets — such as reptiles or monkeys — may not be covered under renters insurance liability. A few progressive companies like State Farm don’t consider your dog’s breed and won’t deny you a policy because of your dog’s pedigree.

Finally, like property damage coverage, your renters insurance liability coverage will not extend to your roommate unless they are family.

How do renters insurance companies pay out claims?

Your insurer will only provide you with coverage if you file a claim—a request to the insurance company for compensation for a covered loss. A renter could make a claim for damage or theft to personal belongings, personal liability coverage or additional living expenses incurred. A property damage claims process will involve several steps.

Filing a claim can be a long process, but the more information you have readily available for your insurer, the more likely you are to accelerate your claims process and receive timely compensation for your loss.

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