Renters Insurance: What Will it Cover

Renters Insurance is a three-part policy designed to protect tenants, their families, and their belongings in a variety of circumstances. Coverage normally includes liability, personal property, and additional living expenses protection. These policies protect tenants in a covered peril, which typically includes fires, water damage, theft, or vandalism.Renters Insurance compliments Landlords Insurance by protecting both parties. Landlords Insurance typically covers structural repairs, flood damage, natural disasters, and liability insurance for the property owner. However, Landlords Insurance doesn't cover tenant losses. For renters who want to protect themselves against liability, personal property damage, and unexpected living expenses, Renters Insurance offers tenant’s peace of mind for $10 to $15 per month. Let's examine each policy in more detail.

Personal Property

In the event of a covered peril, tenants can receive reimbursement for replacing or repairing damaged and destroyed property inside and outside the home. There are two main types of compensation to choose from.
  • Actual cash value coverage – The actual cash value of belongings factors in depreciation. As items age and suffer wear and tear, their value decreases. Tenants who choose this policy will only be reimbursed for the present day value of items, rather than what it costs to replace them.
  • Replacement cost coverage – This policy reimburses tenants for the price of new items. Renters should expect to pay slightly more for this type of coverage. However, this policy offers the highest level of protection to tenants.
Renters should be aware that personal property coverage normally has limits. Those who have especially valuable items, such as jewelry, should be aware of their policy limits. When choosing a policy, it's important to consider the deductible. Tenants will have to pay this amount out-of-pocket before the insurance company begins reimbursement payments.


If there's an accident at a tenant's home and either property is damaged, or someone is injured, Renters Insurance can help pay for related expenses. Most of us don't expect accidents to occur. However, if a guest takes a hard fall, the tenant could be legally responsible for paying the bill. A Renters Insurance liability policy will cover most medical costs.Many times, tenants don't realize that their landlord's policy does not cover injury or damage to guests on the property. Landlords Insurance only covers expenses related to injury of the tenant, should the landlord be found responsible for the costs. A Landlord Insurance policy also covers structural damage to the building. However, it doesn't include any injury or damage to personal property of other people who visit the tenant's residence.Policyholders should take note that certain limits apply to liability coverage. Tenants can set limits on an individual basis and should consult with their insurance agent to determine how much coverage is suitable.For those interested in additional coverage, Personal Umbrella Insurance may be the best option. This policy covers expenses exceeding those of standard coverage.

Living Expenses

When a tenant's residence becomes uninhabitable due to a covered peril, Renters Insurance can help pay for the cost of temporary accommodation, meals, and childcare. For example, let's say a tenant forgets to turn off the stove before leaving the house and starts a fire. The home could be uninhabitable for several weeks or months. Renters Insurance would pay for the tenant's living expenses while the building undergoes repairs.Policyholders should check their insurance carefully, to understand which covered perils qualify for claims. Additionally, each policy has specific limits as to how much it will include. If a covered tenant has to spend more on meals than usual, Renters Insurance can cover these expenses too.For tenants considering renovations and improvements, it's helpful to know who is accountable for the costs. Check out this article on tenant improvements to find out more.

Final Thoughts

In the event of an unforeseen disaster, Renters Insurance can help tenants recover their losses and replace damaged property. Although Landlords Insurance protects the structure of the building, it doesn't protect tenants against liability or property damage. To find out what's covered by Landlords Insurance, read this article on rental property insurance.Renters Insurance coverage typically protects renters against property damage, theft, liability such as guest injuries and medical bills, as well as additional living expenses. Premiums and payouts are closely tied together. Expect higher monthly payments if you want a higher level of coverage.Insurance can cover either the actual cash value or the replacement cost of damaged, stolen, or destroyed property. The actual cash value is the value of the items as they depreciate with time. The replacement cost will pay for the cost of new things. A policy that covers the replacement cost will have higher premiums but offers greater security.

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The above description(s) provide(s) a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.