What Does Renters Insurance Cover?

If you rent your home, renters insurance can help protect you and your pocketbook. These policies cover your belongings inside the property following damage from a fire, theft, or other covered event. Renters insurance can protect against liability, as well.

But, like homeowners insurance policies, renters insurance doesn’t cover everything. Policies may exclude some perils and events.1

Here’s what to know about renters insurance, including what it covers, how much it costs, and more.

Types of rental insurance coverage

Rental insurance is similar to home insurance in that it covers the costs to repair and replace items damaged from covered perils, including fires, windstorms, smoke, and vandalism. Renters insurance policies won’t cover damages due to flooding or earthquakes. These require separate coverage whether you rent your property or own it.

Policies for your rental unit can also cover legal costs if someone sustains an injury or has their property damaged while in your home. If your pet damages something or injures someone, renters insurance can cover it, too.

All in all, renters insurance policies typically include the following four types of coverage:

• Liability insurance

• Personal property coverage

• Medical expenses

• Additional living expenses

Renters liability insurance

Liability coverage provides protection against potential lawsuits that could arise on your property. It’ll cover related legal costs (the costs of both defending you and for court awards) if someone has an injury while in your home.

Liability covers:

• Other people’s injuries on your property

• Other people’s property damage on your property

• Legal costs

• Court awards

Personal property coverage

Personal property coverage protects your belongings in the home. If a covered event — like fire, smoke, lightning, theft, vandalism, or explosion — damages something you own, the policy will cover the costs of repairing or replacing that item.

Personal property coverage could extend to the following:

• Furniture

• Electronics

• Clothing

• Appliances

• Instruments

• Jewelry

This coverage comes in two forms: actual cash value and replacement cost policies. Actual cost value policies only cover the costs to replace an item minus depreciation. Replacement cost coverage policies cover the cost of replacing the damaged item in full following a covered loss.

Personal property coverage might come in handy if a fire occurs in your apartment building and smoke damages your entire wardrobe. The policy would then cover the costs of replacing your clothing.

Medical expenses

Medical expenses coverage goes toward medical bills if someone has an injury while on your property. It’s similar to liability insurance in that it only covers injuries to other people (not yourself or anyone else living in the home). But instead of covering legal costs, it pays for medical bills that result from the injury.

Additional living expenses

Also called loss of use coverage, ALE coverage kicks in if you need to live elsewhere while you complete home repairs after damage from a covered event. It would reimburse you for hotel costs, food, transportation, and other expenses you incur because of the displacement.

For instance, if a hurricane damages your apartment, ALE would help you cover the costs of staying in a hotel or renting an Airbnb while you finish repairs in your unit.

What renters insurance doesn’t cover

Renters insurance won’t cover damage or injuries due to floods or earthquakes, as these require separate insurance policies. This insurance won’t cover vehicles either, even if you have them parked at your property.

Here’s a full list of the typical items excluded from rental insurance policies:

• Vehicles

• Floods

• Earthquakes

• High-value items (you generally have coverage for up to $1,500)

• Injuries to yourself or someone else who lives in the home

Be sure to read the fine print of your insurance policy or ask your insurance agent if you’re not sure what your policy covers.

Average cost of renters insurance by state

The average annual cost of renters insurance nationwide is $199. Policies are most expensive in Louisiana, Mississippi, and Arkansas and cheapest in Alaska, North Carolina, and Wisconsin.

The exact cost of renters insurance will depend on your deductible, coverage limits, insurance company, location of the property, and any discounts you may be eligible for. Typically, the more coverage you have and the lower your deductibles are, the more you’ll pay for renters insurance.2

Below, you can compare the average monthly and yearly renters insurance costs by state.

How to save on renters insurance

The cost of renters insurance depends on several factors. Here are a few strategies that can help lower your rental insurance costs:

Your agent may have other strategies for reducing your premium, so be sure to ask for help.

Renters insurance coverage FAQs