What Does Renters Insurance Cover?

Renters insurance coverage is typically divided into three main categories. Understanding how each one works is critical when choosing a policy that actually protects you.

Personal Property Coverage

Personal property coverage pays to repair or replace your belongings after covered events such as fire, smoke damage, theft, vandalism, or certain types of water damage.

Most policies allow you to choose coverage limits, commonly ranging from $15,000 to $50,000 or more. Many renters are underinsured simply because they underestimate how much their belongings are worth.

For example, replacing a laptop, television, couch, bed, clothing, and kitchen items after a total loss can easily exceed $25,000.

Actual Cash Value vs Replacement Cost

Some policies pay actual cash value, which accounts for depreciation. Others pay replacement cost, which reimburses what it costs to buy new items today.

Replacement cost coverage is more expensive but often far more practical after a loss.

Liability Coverage

Liability coverage helps pay medical bills, legal defense costs, and settlements if someone is injured in your rental and you are found responsible.

Common liability limits include $100,000, $300,000, or $500,000. Many renters choose higher limits because the cost difference is usually small.

Loss of Use Coverage

If your rental becomes uninhabitable due to a covered loss, renters insurance may pay for hotel stays, temporary housing, meals, and additional living expenses.

What Renters Insurance Does NOT Cover