What does renters insurance cover?

Sometimes life throws us curve balls that we can’t anticipate.

Say your apartment is broken into by a burglar, or you host a party in your apartment where someone trips and falls down the stairs, or your apartment catches on fire (big or small), or a pipe bursts and causes water damage to your personal property. Again, while these are things one can’t always anticipate, you can take precautionary measures to mitigate damage as much as possible.

One foolproof way to stay covered as a renter – invest in renters insurance coverage.

What personal property does renters insurance cover?

Renters insurance policies will cover certain personal belongings, such as:

• Furniture

• Clothing and shoes

• Electronics and devices

• Appliances and kitchen equipment

• Home goods such as bedding and towels

• Most sports and hobby equipment (e.g. bicycles and musical instruments) 

Certain personal belongings may be excluded from a standard policy if they're above a certain value, such as jewelry, artwork, rare collectibles, and specialized computer or hobby equipment.

However, generally speaking, renters insurance policies will have the option for add-on coverage for items that exceed a policyholder’s coverage limits.

These policy add-ons are often referred to as riders, floaters, or additional personal property coverage. These additional coverage policies are an affordable way to ensure you’ll be compensated if your valuables are stolen, damaged, or destroyed.

• A rider means you’re adding a specific item(s) to your policy. Riders typically cover, at an additional cost, an item that might not be already covered on your policy or is inadequately covered. This could include such items as an engagement ring, bicycle, or expensive piece of artwork.”

• Per Investopedia, a floater is a type of insurance that “covers personal property that is easily movable and provides additional coverage over what normal insurance policies do not. Also known as a “personal property floater,” it can cover anything from jewelry and furs to expensive stereo equipment.”

• Additional personal property coverage is a broad term that covers any add-ons, for an extra cost, to your renters insurance policy.

What does renters insurance protect your personal belongings from?

Your renters policy will state exactly what you're insured against. In the insurance world, this is referred to as "named peril" coverage. Named perils cover damage and covered events/covered peril, including:

• Fire or lightning 

• Windstorm or hail

• Explosion

• Theft

• Falling objects

• Smoke

• Aircraft-impacted accidents

Also, renters insurance typically includes personal liability for any guests’ ailments that occurred as a result of being in your home, such as a guest breaking a leg due to tripping on an area rug.

What does renters insurance not cover?

Generally, renters insurance policies will not cover the following:

• Bed-bug related damage

• Mold damage (unless it’s determined to come from a problem that is covered, such as an internal water leakage from plumbing or a neighboring unit)

• Flood damage (there are exclusions for certain instances, again, due to in-unit problems or proven negligence)

• Earthquakes or other natural disasters

• Terrorist attacks

• Accidental damages

• Moving (unless you are moving due to your living situation becoming inhabitable from a named peril) or damaged items from moving

• Car theft (even if the car is parked on the rental property, anything car-related will be covered by car insurance/auto insurance, not renters insurance)

• Medical expenses

Also, note that your renters insurance policy covers your personal items. Your landlord’s insurance should cover replacements for any possessions that they own in your rental unit, such as a refrigerator or in-unit washer and dryer. And although most medical expenses aren’t usually covered by renters insurance, your landlord might be willing to pay any medical bills through their liability insurance, should the circumstances prove uniquely dire (e.g. poor maintenance leads to a roof tile falling on your head) and they want to avoid legal fees.

How much renters insurance do you need?

When you’re discussing a new renters insurance quote with your insurance company, there are often two ways to calculate how much renters insurance you will need to cover your personal belongings types of coverage. You can calculate the actual cash value or opt for additional replacement cost coverage.

• An actual cash value policy will compensate you for what your items are worth in used condition. Your insurance premiums will be less expensive, but if your items are stolen and destroyed, you’ll be compensated at a lower reimbursement rate under the assumption that if your personal property items were lost/stolen/destroyed, that the value of your belongings are worth less because they were used, sometimes even when your damaged items are brand new. As a result, it’s likely that your insurance settlement won’t provide sufficient reimbursement to purchase new replacements.

• If you have more high-cost stuff than low-cost stuff, opt for a renters insurance policy that reimburses you for the replacement cost value of the item. While the policy may cost you more, this means you’ll get the price you paid for the item reimbursed back to you.

Consider personal property that you own and how much you can afford the additional living expense of renters insurance. You should make sure that you buy a renters insurance policy with deductible limits that will be enough to cover these items (along with additional coverage for valuable or rare items). You may want to create a home inventory in an Excel spreadsheet to make sure your items stay within your policy limits.

How do I take out a renters insurance policy?

If you want to keep your personal belongings covered, invest in a policy that matches your wallet. With Rhino, you can add renters insurance on top of your security deposit insurance, for that extra layer of protection and for a policy that’s easy on your wallet.

Ben Weger

Ben Weger is a Content Strategy Manager at Rhino. He's hoping to replace security deposits in his building as soon as he convinces the co-op board.