renters insurance basics for beginners

What Does Renter’s Insurance Cover

As a renter, you should be aware that your landlord’s insurance policy may, in most cases, not cover tenants. It means that not only are your belongings not protected from events like theft or damage from natural events, but you also might face personal liability in case someone gets injured on your rental premises.

With plenty of natural disasters occurring in recent times, it is probably a good idea to consider getting a renter’s insurance. However, did you know that certain weather-related events like earthquakes and floods are typically not covered by a renter’s insurance?

If you live in an earthquake zone like California or a hurricane zone like the south or the gulf, then you must have surely thought about getting renter’s insurance.

Some landlords will require you to take out renter’s insurance coverage before they are ready to sign a lease with you. Landlord’s do this to absolve themselves from any responsibility if your belonging gets stolen or damaged.


The good thing about renter’s insurance is that it is cheap and you only pay a small premium like $15 or $20 a month.

In exchange for this small premium, you get substantial coverage for damage to your belongings or complete loss of your belongings. You will also get protection if someone who gets injured while at your rental premises decides to sue you.

However, before you go buy a renter’s insurance policy, it may help you to understand what exactly the policy covers and what it does not.

Reimbursement for damage or loss of belongings

The number one reason why most people buy renter’s insurance is to protect their belongings. A typical renter’s insurance policy will cover events like theft, vandalism, riots, hailstorms, fire, windstorms, lightning, freezing, and damage from aircraft crashes.

So, if you, unfortunately, lose your belongings due to any one of these events or if your belongings get damaged by these events, then you can file a claim to get reimbursement to either repair your belongings or replace them completely.

Whether it is an expensive laptop, an HD television set, or any other valuable, you can protect against damage/loss to such important belongings by purchasing renter’s insurance. Even expensive items like jewelry and antiques can be protected under renter’s insurance.

However, you need to pay extra to cover such items as they are usually not covered in a standard policy.

While reading about coverage for your personal belongings, make sure you inquire about how the value of your belongings is estimated. In the insurance world, generally two methods are used.

The first is the Actual Cash Value, through which the reimbursement amount is calculated by subtracting depreciation (depending on how old your lost item is) from the initial value.

Then, there is the Replacement Cost method, where the actual value of the item is reimbursed without subtracting any depreciation.

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Personal Liability

The second most important coverage that renter’s insurance provides is for personal liability. Picture a guest or a visitor to your rented accommodation.

What if that person gets injured while at your place and has to get treated medically as a result?

The medical bills might be too high for that person to pay and the liability could then fall on you (the renter).

Another example could be a visitor getting bit by your dog. The cost of treating a bite wound might be too high as well and the blame could fall on you.

Personal liability isn’t just limited to injuries. What if a fire breaks out in your apartment and spreads to your neighbor’s unit as well?

To protect yourself from such personal liabilities, a renter’s insurance can help. The follows are normally covered by renter’s insurance under personal liability:

  • emergency room visits
  • ambulance costs
  • surgery
  • x-rays
  • certain dental treatments
  • hospital stay expenses

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Temporary costs for staying away from your rented premises

If your rented unit gets damaged due to a weather event and if it becomes inhabitable until heavy repair-work is done, then you obviously need to move out temporarily and live somewhere else till everything gets fixed. That will cost money.

Do not assume that your landlord will pay for the temporary lodging expenses. You need a renter’s insurance policy to help you out. Renter’s policies pay for hotel room stays and may even give you some extra cash for food and other expenses.

Belongings not in your rented place

Some of the renter’s insurance policies also cover the loss of your belongings even when the items aren’t physically in your rental unit.

For example, if you lose your laptop from your backpack while you were on vacation, then some policies may reimburse you for it.

This kind of coverage is very specific to select policies and you need to read the fine print to really understand what kind of coverage is being offered. It may also be a good idea to inquire about the availability of this kind of coverage with the insurance company.

Some prominent exclusions

There are some things that simply aren’t covered by a renter’s insurance policy. Earthquakes and floods are two popular events.

You might be able to buy additional coverage for these two natural events, but a regular policy will not cover them. Some insurance companies will not cover these events at all, even through add ons.

Belongings of your roommate are also not covered by your rental insurance. Your roommate has to buy his/her own policy.


Any accidental loss or loss due to misplacement of valuables by you won’t be covered. If the reason for the loss can be pointed to your negligence, then such events will not be covered.

Damage to the actual structure or building of your rental accommodation will not be covered by renter’s insurance. Your landlord’s homeowner’s insurance or property insurance will have to take care of such structural damage.

Damage by pests and bugs is also not covered under renter’s insurance. Any undocumented items for which you do not have receipts or items which cannot be proven to be yours are also not covered under a rental insurance policy.

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