What Does (And Doesn’t) Renter’s Insurance Cover?

As a renter, you may not think you need an insurance policy because your landlord has insurance. However, your landlord’s policy won’t protect you or provide personal property coverage in the event of a loss. Renter’s insurance is an affordable way to ensure you have financial protection in case damages occur to your personal property.

This article discusses how renter’s insurance can protect you, events where a claim won’t qualify, and what renter’s insurance is.

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What is renter’s insurance?

Renter’s insurance is an affordable way to protect your personal property as a tenant. Small unexpected incidents can cause costly damages and result in thousands of dollars in loss for you.

It covers the financial burden of named perils up to your policy limit, and protects you against liability claims in the event someone gets injured in your home, and ensures you have accommodations if your unit becomes uninhabitable. While similar to homeowner’s insurance, tenant’s insurance only provides coverage on your personal belongings and not the property’s structure.

What does renter’s insurance cover?

A renter’s insurance policy provides several different types of coverage in the form of financial protection for you. This includes coverage for some losses you may not even realize you can claim. Your policy will state named perils, so you’ll know exactly what your coverage limits are in the event of damage or loss to your belongings. Below are the types of coverage included in your renter’s insurance policy.

Related: Does renters insurance cover damage to a rental property?

1. Natural disasters

Natural disasters and weather events like floods, rain, wind, hail, snow, sleet, ice, volcanoes, and lightning are named perils. You can file a claim for any personal property damaged by these kinds of events. However, if you live in an area prone to flooding you may want to invest in additional coverage such as flood insurance to increase your policy limits.

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2. Water damage

Water damage from burst pipes, sewage overflows, water seepage, and leaks are covered perils under your renter’s insurance policy. Your policy will also cover personal property damage that occurs from frozen pipes, heating or cooling systems, and sprinkler systems.

3. Liability protection

Renter’s Insurance policies include liability protection in the event of any damages or a lawsuit filed against you. Personal liability coverages can also reimburse you for attorney fees or litigators. If someone is injured in your home, your policy will cover costs associated with potential medical bills or life insurance.

4. Costs of the additional accommodations

If your apartment or home becomes unlivable due to a named peril, then your policy will cover the costs of the additional accommodations up to the limits of your policy. You will also be covered against additional living expenses such as meals, laundry, and increased costs of commuting while you’re unable to live at home.

5. Credit card theft and bank forgery

You may not know that your renter’s insurance safeguards you against credit card theft and bank forgery. Your policy will reimburse you for losses you incur if a thief steals your credit card from your home and fraudulently spends your money.

6. Losses of personal belongings

Many policies will protect you against losses if your personal belongings are stored away from your rental. In these cases, your rental insurance will cover the cost of items damaged or stolen from inside your vehicle and even property damaged while at a storage facility.

7. Personal property

Not only your personal property is covered under your policy. If you borrow someone’s equipment or belongings and they become damaged from an unexpected event, your insurance will replace those items.

8. Fridge failing

If a power failure results in food spoilage from your fridge failing, your policy will reimburse you for groceries that are lost.

9. Removal of debris

Your renter’s insurance also reimburses you for costs related to the removal of debris after damages to your property. However, this is only applicable to insured perils.

Related: How much is tenant insurance in Canada?

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What isn’t covered by renter’s insurance?

Not all risks are covered under your renter’s insurance policy, and limited coverage is available for high-value items like jewelry. Losses related to a personal business and perils not listed in your policy are not covered by tenant’s insurance. Below are events that your renter’s insurance policy won’t cover.

1. Damage associated with bed bugs and pests

Your renter’s insurance policy will not cover any losses or damage associated with bed bugs and pests. This also extends to any extermination costs of rodents.

2. Stolen car

If your car is stolen, the loss isn’t covered under your renter’s policy. Instead, your car insurance will cover the theft. However, you can file a claim for any belongings that were inside the car at the time with your renter’s insurance.

3. High-value items

High-value items like antiques, expensive jewelry, family heirlooms, or rare collections may exceed your policy limits. Due to sub-limits within your policy for these kinds of belongings, you’ll need to look into purchasing additional coverage for items of this nature to ensure they will be covered against any unexpected damage or loss.

Related: What Protects the Things You Own?

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4. Roommate’s belongings

Renter’s insurance also won’t cover any damages or losses associated with your roommate’s belongings, even if those items are stolen. They would need a policy of their own to be covered.

5. Items related to business use

Tenant insurance commonly excludes items related to business use. If you own a small business, and one day your house is broken where your computer and cell phone get stolen during the break-in, then you won’t be able to claim this loss. Renter’s insurance won’t cover the losses of these items as business tools unless you have a seperate small business insurance plan. Another option is to add an at-home business endorsement that will extend your coverage and provide protection for items like a work laptop and cell phone.

The Takeaway

Having renter’s insurance is worth it and it protects you against worst-case scenarios and provides you with several different types of protection, including against liability. It may even save you from enormous financial costs if you face a lawsuit or have to replace belongings due to an unforeseen event.

Renter’s insurance also covers most kinds of damage and personal property losses that you could face as a tenant. Most renter’s don’t realize how much their belongings are worth, as a renter you should take stock of your home inventory to add up how much your personal property is worth. You should also discuss with your policyholder the best coverage option for your situation to cover you against any risks and potential perils.

Related: How Your Insurance Can Cover You During a Vacation

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