When purchasing renters insurance, most people have the sense to ask their carrier what the policy covers. An equally important question is the opposite of that: “What does renters insurance not cover?” The answer will tell you which add-on coverages you need to be fully insured.
What is renters insurance
Renters insurance is a must-have for any smart renter, as it offers several different types of protection. It protects your personal property, provides liability and medical coverage, and pays for emergency living expenses if you have to stay in a hotel while your home is being repaired. Keep reading for more details.
Personal property
Renters insurance pays to repair or replace your personal belongings if they get damaged or stolen. Because it’s difficult to know how much your property is worth, it’s a good idea to complete a detailed home inventory before purchasing a renters policy. An inventory will help you determine each item’s value. Once you have that information, you’ll know how much renters insurance coverage you need overall.
Liability and medical
Renters insurance can help pay for your defense and court costs if someone brings a claim or lawsuit against you. It can also pay for necessary medical expenses for guests who are accidentally injured in your unit. For example, if a guest at your home trips and falls, we’ll help cover their medical expenses.
Emergency living expenses
If you’re temporarily forced out of your apartment due to a fire or some other covered event, renters insurance will help with emergency living expenses. This includes your hotel, meals and other related expenses.
What’s not covered
Unfortunately, renters insurance does not cover all losses. For example, it does not cover natural disasters that aren’t specifically listed in your policy, such as floods and earthquakes. Renters insurance does not cover losses related to a personal business either.
It’s essential, then, to understand the nuances of a standard renters insurance policy. Read below for a list of events and items that typically aren’t covered by your policy.
Damage caused by floods, earthquakes and sinkholes
Flooding, earthquakes and sinkholes are all examples of natural disasters that are not covered by a typical renters insurance policy. All three of these events can easily damage your personal property, so you should buy additional coverage if you think you’re at risk.
If you live in a low-lying area, you should strongly consider purchasing a separate flood insurance policy. This will protect you from damage caused by rising waters. Remember, your renters policy will usually protect you from damage caused by falling water. Examples of falling water include water that enters the building through a hole in the roof or from a broken pipe.
Similarly, if you live near a fault line, you should consider a separate earthquake policy. And if you live in an area with unstable bedrock, you should consider a sinkhole policy.
Damage caused by pests
Imagine discovering that your apartment is infested with termites, bed bugs, mice or rodents. That’s a renter’s nightmare. To make matters worse, your renters insurance policy will not cover personal property damage caused by pests, since it’s considered a maintenance issue. It also won’t pay the cost to exterminate pests, if that is what’s necessary.
Your best course of action is to prevent pests from appearing in the first place. Do your best to throw away clutter, properly dispose of garbage and keep your kitchen clean. If that doesn’t work and you still discover pests, you should notify your landlord right away.
Damage caused by mold
For the most part, mold damage isn’t covered by renters insurance because mold grows over time. Usually, it’s the result of a longstanding maintenance issue or flooding.
On the other hand, if the mold is caused by a sudden event—such as a burst pipe or a storm that damages your couch cushions over time—your renters insurance policy might not protect you. Depending on the circumstances, it may cover the replacement of damaged or destroyed items.
Either way, your best bet is to immediately report any leaks or water damage to your landlord, so they can fix the issue before mold has a chance to form.
Damage caused by you
Accidental or intentional damage, whether it’s caused by humans or pets, is not considered a covered loss or event. As a result, your insurance carrier won’t pay to repair or replace the damaged item.
For example, if a fire damages your laptop, your renters insurance policy will pay to replace it. But if you accidentally drop a bowl of soup on your laptop and damage it, your policy won’t cover it. You’ll have to pay to repair or replace the laptop out of your own pocket. Put simply, it’s your responsibility to be careful.
Damage to the building itself
If you damage the physical structure of your apartment, your renters policy won’t pay to repair the damage. That’s because renters insurance only covers the renter and the renter’s personal property. It does not cover damage to the building itself. Your landlord will have a separate insurance policy that covers the building structure, the appliances and the grounds around the property.
This distinction is one of the reasons why renters insurance is more affordable than homeowners insurance.
Items of high value
Most renters insurance policies cap the coverage of certain high-value items like jewelry, antiques, musical instruments and rare collections. For example, let’s say a single piece of jewelry has a coverage limit of $1,000. Anything over that value would be excluded from renters insurance plans.
As a result, you’ll need to purchase extra coverage—called an endorsement—for each high-value item that you own. An endorsement will raise the coverage limit of a specific item or category of items. Some endorsements also include coverage for a wider range of events or perils than a standard renters insurance policy.
The following personal property categories, and their coverage limits, are fairly typical for a renters insurance policy:
| Property Category | Coverage Limit |
| Money, bank notes, coins, medals | $200 |
| Records, disks, tapes, antennas, other media | $250 |
| Securities, accounts, deeds, manuscripts | $1,000 |
| Theft of jewelry, watches, furs, precious stones | $1,000 |
| Portable electronic equipment | $1,000 |
| Works of art | $1,000 |
| Watercraft (including trailers, motors, engines) | $1,500 |
| Trailers not related to watercraft | $1,500 |
| Theft of firearms, related equipment | $2,000 |
| Theft of silverware, goldware, platinumware | $2,500 |
Items for business use
Renters insurance policies typically exclude items related to business use. Let’s say you operate a small business out of your apartment. If a fire damages your business computer, your renters policy will not cover the loss.
Fortunately, most insurance carriers also offer an endorsement that would protect you in such a situation. The add-on coverage will pay to replace any business equipment that is damaged in your apartment by a covered loss.
Items belonging to your roommate
Roommates are used to sharing everything, from the bathroom to the hallways to the kitchen. One thing they can’t share, though, is renters insurance. If your belongings and your roommate’s belongings are damaged by the same event, your policy will only protect your property.
In order to be covered, your roommate should buy their own renters insurance policy. Another option is to add your roommate’s name to your renters policy and then increase your coverage to encompass your combined belongings. A detailed property list will help avoid disputes if a claim is ever filed.
There is one exception to these rules. If your roommate is also your relative or spouse, your renters insurance policy will cover their property.
Your vehicle
Many renters falsely believe that their rental insurance will protect them if their car is damaged or stolen within the limits of their rental property. This isn’t true. In that scenario, your auto insurance would apply.
Renters insurance does cover any personal property items that are inside your car, though—no matter where your car is at the time of the incident. For example, if your cell phone is stolen from your car while it’s parked at work, renters insurance will pay to replace it.
Document your belongings
Getting your renters insurance carrier to cover specific items without proof of ownership can be difficult. For example, if your bike gets stolen out of your apartment, but you can’t prove you owned it, your insurance carrier may require additional documentation.
You also need proof of value. Unless an item is appraised, it will be hard to nail down just how much it is worth, especially if it’s a piece of jewelry. You may think that your grandmother’s necklace is worth $1,000, but without proof of value, there’s no real way for the insurance carrier to know for sure.
The best way to document your personal property is to start a file with all relevant receipts, appraisals and photos. Even photographs of the model and serial numbers of items can help when filing a claim. For extra security, you can scan any paper documentation and then upload everything into a cloud file.
Put simply, your renters insurance is more likely to pay out claims accompanied by careful documentation.
