When you rent an apartment, renters insurance covers your personal property, your legal expenses if someone is accidentally hurt in your home, and the loss of use of your home due to a covered condition. What’s covered and what’s not is thoroughly explained in the policy that the renters insurance company has you sign before coverage goes into effect. Your renters insurance company will pay you to replace a loss caused by a covered peril in the policy.
Your renters insurance policy will describe the conditions under which you can file a claim for financial loss. The policy will be extremely thorough, narrowly distinguishing between damages for different types of situations, like the distinction between rain damage and flooding. It will also state exactly how much you can receive back for a covered loss, as well as the conditions under which that loss is eligible for reimbursement.
At its most basic iteration, renters insurance policies are divided up into three coverage provisions: personal property loss or damage, which covers your personal possessions and the different ways it can be stolen, damaged, or destroyed; liability coverage, which covers the financial risk of being sued by someone who is injured in your home, or having to pay for this person’s medical expenses; and loss-of-use coverage, which covers the cost of a hotel or temporary rental if your home becomes unsafe or uninhabitable due to a covered peril.
Your renters insurance policy will also describe the extra coverages you purchase. When you purchase coverage, you’ll most likely receive a brochure that describes your renters insurance policy in broad strokes, but it’s the policy itself that fills in the fine details. The renters insurance policy will leave little up to interpretation and can be quite detailed.
In this article:
What is a renters insurance declarations page?
Every renters insurance policy comes with a policy declarations page , which is essentially a cover sheet describing the basic factors of your policy and what your renters insurance covers. The policy declarations page will resemble a bill or an invoice, containing a list of items and a corresponding numerical representation of the item.
On the policy declarations page, you’ll find some standard facts.
Your name and address
The name of your agent and insurance company
Your policy number
The renters insurance policy period, which tells you the span of time (usually one year) that the policy lasts.
The policy declarations page also includes details pertaining to your renters insurance coverage and rate.
Premium: The amount you have to pay monthly or annually to keep your policy in force.
Deductible: The amount you pay out of pocket when filing a renters insurance claim before your insurance provider will pay for the rest (usually $500 or $1,000).
Coverages: The three main coverage provisions (plus any additional coverages) will also be listed
Limits of liability: The maximum amount the renters insurance company will pay out for specific coverage provisions in your policy
Discounts: Any policy discounts that lower your renters insurance cost
The policy declarations page, also called a dec sheet, may state how you opt to receive a payout for a loss. You can pick between two options.
Actual cash value policy: The value of your possession minus depreciation. Meaning, time and wear and tear are factored into your reimbursement amount.
Replacement cost policy: You receive a payout equal to the current market value of the same or a similar item.
What’s covered in a renters insurance policy?
There are three parts to a basic renters insurance policy. Your policy will outline all the nuanced information about what is covered and what is not. Your renters policy will also get into the nitty-gritty, like making a distinction between loss due to nuclear action (not covered) and loss due to a fire caused by nuclear action (covered). It will explain the type of personal possessions that are covered, sometimes explicitly naming common valuable items, like trading cards, jewelry, manuscripts, and guns. For example, a renters insurance policy could exclude coverage for “aircraft and aircraft parts” while making an exception for “model or hobby craft not designed to carry people or cargo.”
Most renters insurance policies are similar when it comes to what they cover and what they do not.
Personal property coverage
A comprehensive insurance policy will cover the cost to replace or repair your personal possessions, things like your furniture, clothing, TVs, laptops, and appliances. However, renters insurance will only reimburse you for a loss if it is caused by a covered peril. Most renters policies will consider any of these instances to be a covered event:
Fire and lighting
Windstorm and hail
Explosions
Riots
Damage by aircraft
Damage by vehicle (not your own)
Vandalism
Volcanic eruption
Falling objects
Weight of snow, ice, sleet
Damage from steam-heating/water-heating appliances/systems
Leakage or overflow of water or steam
Freezing of plumbing, heating, air conditioning
Short-circuit damage caused by electrical appliances
Renters insurance will also cover your personal property when it is off your rental premises, like if your laptop gets stolen while you’re at the airport.
In addition to your overall coverage limits, your policy may include lower sublimits for specific categories of items. Your renters insurance policy will spell out the maximum amount that the company will pay for the loss of these specific types of items.
Below are a few examples of sublimits.
$200 - $250 sublimit on stolen cash
$2,500 sublimit for stolen silverware and goldware
$1,500 sublimit for jewelry
If you have expensive items that you want to insure for more than the sublimit on your policy, don’t panic. It should be possible to buy additional coverage to increase your policy limit for your highly valuable possessions. You can do this by scheduling endorsements to your insurance policy in order to extend the coverage for certain belongings or perils. Such property that falls under extended coverage provisions includes items like watches, jewelry, gemstones, and furs.
Liability coverage and medical expenses
There are a few reasons you might need to file a personal liability claim. If you’re responsible for someone’s injury in your rental unit, then you might need to file a liability claim to cover their medical expenses or the legal fees should they decide to sue you. As with personal property protection, your policy’s coverage for liability and medical expenses explicitly details when the renters insurance provider is obligated to pay out and when it isn’t.
The liability coverage section of the policy is meant to cover accidents for which you’re legally responsible, like if your dog bites someone or a guest slips and falls, so the renters insurance company won’t pay out if you intend to hurt someone in the home or to profit from the injury. Certain other types of injuries are excluded, like some injuries caused by cars, with some important exceptions for the type of vehicle or its usage.
The renters insurance policy also defines what “reasonable” or “necessary” medical expenses it will cover.
Some examples of reasonable medical expenses are:
X-rays or MRIs
Dental services
Prosthetic devices
Surgery
The policy should state what types of liability and medical bills it will cover outside the home. The insured person may make a renters insurance claim if they, or one of their insured family members or employees in residence, causes an injury or damages property off the insured premises. Check your policy to see what limits of liability and conditions apply.
Loss-of-use coverage and additional living expenses
If one of the conditions covered by your policy results in your home becoming uninhabitable,your loss-of-use coverage in your renters policy will cover the cost of you staying elsewhere. This can be a hotel, motel, or a new rental — it all depends on your policy. You should check the section of your policy about additional protection for a more thorough look at how your living expenses will be covered.
The policy should explain how long the renters insurance company will pay such expenses, which may be the shortest time period between repairing your own home or permanently relocating to a new one. Your renters insurance company may also cap the payment period at 12 months.
Your renters insurance will also cover the cost of additional living expenses while you are temporarily dislocated from your home. For example, if you have to start eating at restaurants more, using a laundromat, or paying more for gas because you are now located further from work — renters insurance will cover these living expenses that accrue. You should keep your receipts in order to get reimbursed more efficiently.
Additional coverage
Many renters insurance companies offer additional coverage that may appear to be out of the purview of that which is associated with renting a home.
You can also add endorsements to your policy in order to extend coverage to perils that are not covered, or to expensive items that exceed your coverage limit.
Below are a few common endorsements that renters add to their policy.
Scheduled property endorsement: Scheduled property endorsements will increase coverage for specific personal possessions. You can schedule a property endorsement to your policy for belongings that are not included in your coverage, and for belongings that exceed your policy’s sublimits. Things like original artwork, expensive electronics, or fine china.
Replacement cost endorsement: As we mentioned, there are two types of renters insurance policies: replacement cost value and actual cash value. If you have an actual cash value policy, you can add a replacement cost endorsement for valuable belongings in order to be paid out the replacement cost. This means you would pay a little more upfront when filing a claim for your valuable items, but you could hypothetically get enough money back to pay for them as if they were new.
Earthquake endorsement: An earthquake is not typically covered by a renters insurance policy. If you live in an area of the country that experiences earthquakes, you should add an earthquake endorsement in order to receive coverage for any damage caused by one.
An insurance broker can advise you which endorsements would be right for you.
What does a renters insurance policy not cover?
Renters insurance does not cover all events that result in theft or damage to your personal belongings. There may be some perils that are specifically excluded from coverage, and those will be listed in your policy. They may include:
Damage caused by pests or infestations
Rare or irreplaceable items of high value
Terrorism or nuclear war
Damage to your vehicle (auto insurance will cover this)
Destruction to the physical dwelling that you live in (that will be covered by your landlord and their insurance)
Renters insurance discounts
The declarations page on the front of your renters insurance policy will list any discounts you receive from your insurance company. Most renters insurance companies will offer discounts for a variety of reasons, like:
Multi-policy: If you bundle your renters insurance policy with another policy, like car insurance
Paid-in-full: If you pay your premiums in-full instead of monthly or bi-annually
Paperless: If you elect to receive paperwork from your carrier electronically instead of in hard copy
Safety measures: If you take safety precautions, like installing fire alarms, sprinkler systems, or deadbolt locks
