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What Does Renters Insurance Cover?

Renters insurance can help protect you in three major ways by:

  • Covering replacement costs for stolen or damaged property.
  • Providing liability protection if guests are injured at your home.
  • Paying for your living expenses if your rental unit becomes uninhabitable.

And it’s not just for apartment dwellers, renter insurance can also offer coverage if you rent a duplex, townhouse, condo, or single-family home.

Whether you rent a studio or a mansion, a renters policy can help protect your possessions and your assets.

Protecting Your Property

Just because you rent doesn’t mean you should forgo insurance. Remember: your landlord’s insurance covers the physical building you live in, not all the personal property you’ve accumulated over the years. It’s up to you to purchase renters insurance to make sure if disaster strikes, your assets are protected.

If your home is burglarized or damaged, it could prove costly to replace everything you own. By opting for renters insurance, you protect yourself against future loss should your home be impacted by:

  • Theft.
  • Vandalism.
  • Fire.
  • Wind.
  • Hail.
  • Lightning.

Property coverage also extends beyond your home. If your laptop is stolen while you’re on a trip, your renters insurance can still help pay for a new one. Review “Does Renters Insurance Cover Theft?” for more information.

If your home is damaged to the point where you can’t live there temporarily, your loss of use coverage can help pay for you to stay somewhere else. It may cover the cost of a hotel room, restaurant meals, and other expenses that crop up as a result of your forced relocation.

Liability Coverage for Potential Third-Party Claims

Liability insurance may take care of potential third-party legal and medical expenses if a visitor is injured at your home or if you accidentally damage their property. Here are some examples that may be covered:

  • A friend trips over a rug in your apartment and knocks out his front teeth, requiring expensive dental work.
  • Your dog bites your child’s best friend.
  • A guest who had too much to drink at your party falls down your steps, breaking her arm.

None of these accidents are directly your fault, but since it happened in your home, you could be held liable.

Liability insurance can potentially cover your legal expenses, the injured person’s medical bills, and even pay for lost wages if they are unable to work as a result of their accident. Check out “What Is Renters Liability Insurance?” for an overview on the subject.

What Does Renters Insurance Not Cover?

Renters insurance can protect you in many ways, but it doesn’t cover everything. Some non-covered events include natural and non-natural disasters, such as…

  • Floods.
  • Earth movement, such as earthquakes (in some instances, this can be added on as an endorsement).
  • Damage from a war or nuclear event.

Renters insurance also doesn’t cover intentionally inflicted damage. This means if your child accidentally hits a baseball through your neighbor’s window, it’s covered. But if she uses her baseball bat to bash out the neighbor’s car headlights, it’s up to you to pay the damages (possibly by withholding your kid’s allowance for life).

Living Large: Endorsements for Valuables

If your property is stolen or damaged, your insurance company can help pay for the cost to replace your items, but only up to the pre-determined dollar limits outlined in your policy. If you own a high-value item – a signed print by the artist Andy Warhol, for example – your normal renters insurance coverage would not offer protection to reimburse you for its actual value if it’s stolen.

Instead, you may consider purchasing an endorsement to provide extra protection for high-value items, like…

  • Firearms.
  • Fine jewelry.
  • Art.
  • Musical instruments.
  • Silverware.
  • Computers, or other big-ticket electronics.
Most renters insurance policies do NOT cover home-based business property or liability.

Work from Home? Renters Insurance & Home-Based Businesses

If you are an entrepreneurial type operating a business out of your home, you may not be protected by renters insurance for any potential losses your business suffers. If your apartment is destroyed by a fire, any business property (e.g., a computer, product samples, files, etc.) would likely not be covered by your renters policy.

Your renters insurance liability coverage would also not extend to your business-related use of the property. So if a client comes to your home office and is injured, you would be personally liable for any related legal or medical expenses.

Protect yourself and your business by opting for an in-home business endorsement, which can provide property and liability coverage, as well as limited protection for business property located elsewhere.