Many renters or tenants think they don’t need insurance at all. Indeed, it’s the landlord’s responsibility to insure the building and make repairs, but renters are not off hook completely. This is where renters insurance comes in. It is a form of property insurance designed to protect renters living in a house or apartment.Before you purchase renters insurance in the USA, you must be aware of everything this policy does and does not cover. What does renters insurance cover?
In the USA, a renters insurance policy covers the following:
What renters insurance doesn’t cover?
- Personal property damage This includes costs to replace your personal belongings, such as clothes, appliances, furniture, and electronics. Most renters insurance policies reimburse you for the loss of items if destroyed, damaged, or lost or stolen due to one of the 16 specific events, including some common ones like fire and lightning, windstorm and hail, explosions, riots, damage by vehicle (not your own), smoke damage, vandalism, theft, falling objects, and short-circuit damage caused by electrical appliances.
- Personal liability coverage and healthcare expenses If someone gets injured in your home or their property gets damaged and they decide to sue you, your renters insurance policy will cover the legal costs up to a certain amount. The policy also covers healthcare expenses of the other party if they slip, fall, or are hurt in your rental, or if your dog or cat bites them.
- Loss of use, or additional living expenses If your rental has been made uninhabitable and you need to move to a temporary place to live, you can use your renters insurance policy to pay for everything from hotel bills to restaurant meals to the cost of the gas if you’re driving more because your hotel is now further away from your office. This part of the policy is helpful in a situation where, let's say, there is a fire at your apartment and you’re required to stay in a hotel until the situation is resolved.
Like almost every other policy, there are circumstances in which renters insurance in the USA will not cover the tenant’s belongings. These include:
- Damage from pests A renters insurance doesn’t cover any damage to your belongings caused by rodents, bedbugs, pests, and other sorts of vermin. The policy will not reimburse the extermination costs as it is generally the landlord’s responsibility to keep the properties free from all kinds of infestation.
- Car theft or damage Though your car is your personal property, renters insurance doesn’t protect you against any type of vehicle damage or theft. You need to buy a car insurance policy separately to cover various damages and repairs related to your vehicle. However, keep in mind that the renters insurance in the USA reimburses you for the belongings in your cars, such as your smartphone or laptop, at the time of the theft.
- Certain natural disasters While volcanic eruptions and windstorms are covered under renters insurance policies, damage caused by earthquakes, floods, and even skin holes are excluded. However, the insurer may offer these damages as an add-on. If your rental is in a flood zone, near a fault line, in a region prone to major storms or earthquakes, it might be worth buying the add-on or even a separate coverage for such extreme natural disasters.
- High-value items Don’t assume that your renters insurance fully covers all your belongings. Many insurers can’t afford to pay for expensive valuables, such as your high-end electronic equipment, jewelry, fine art, antiques, and vintage family heirloom items, so they limit the amount of coverage on such items. Consider buying floater insurance or jewelry insurance if you want to cover these items.