What does tenant insurance cover?


If you are renting a house or apartment, you may have or are considering an insurance policy for tenants. Renters insurance is designed to provide financial protection for your personal property, as well as coverage for your liability exposure in the event someone is injured on your property.

Renters insurance, on average, costs about $ 179 per year, according to the Insurance Information Institute (Triple-I). Like auto insurance, tenant insurance is a valuable part of your financial plan. If you’ve ever wondered what is covered by renters insurance, you’re not alone. Understanding your home insurance coverage can help you feel more comfortable with your policy and have more control over your finances.

What does tenant insurance cover?

Your tenant insurance policy offers multiple areas of coverage and can be customized to meet your unique needs. The coverages discussed here are pretty standard, but all renters insurance companies are different. It may be a good idea to check with your agent for the specific coverages included in your policy.

With these coverages, you will first pay a deductible as determined in your policy before your insurer helps you cover the costs.

Liability coverage

Liability insurance is designed to give you financial protection if someone is injured on your property. It could also help pay for attorney fees and legal representation. In fact, your liability coverage may even extend to injuries you are responsible for that occur outside of your premises, such as your dog hitting a neighbor while you are walking.

Liability coverage is an integral part of a tenant insurance policy. Most companies offer liability coverage starting at $ 100,000, although $ 300,000 and even $ 500,000 are not uncommon levels of coverage. These amounts may seem high, but if someone is injured and sues you, the bills can add up quickly.

Personal property coverage

Personal property coverage is the backbone of a renters insurance policy. Because your landlord is responsible for the structure of your rental home or apartment building, a renters’ insurance policy does not include housing coverage like a home insurance policy does. However, you are responsible for your personal belongings, such as clothing, furniture and electronics, and this is where home insurance comes in.

Renters’ insurance policies cover your belongings on a named peril basis, which means your belongings are only covered in certain situations. The most commonly included named perils are:

  • Fire or lightning
  • Windstorm or hail
  • Smoke
  • Vandalism
  • Flight
  • Damage caused by the weight of ice, snow or sleet
  • Damage caused by the accidental release of water or steam from a household appliance, or a plumbing, heating, air conditioning or sprinkler system
  • Damage caused by sudden and accidental cracking, burning, tearing or bulging of a steam or hot water heating system, air conditioner or sprinkler system
  • Damage caused by freezing of a household appliance or of a plumbing, heating, air conditioning or sprinkler system
  • Damage caused by sudden and accidentally generated artificial electric current

Keep in mind that these risks only concern your personal property. If your ceiling collapses after a heavy snowfall, for example, your tenants’ insurance policy will help pay for damage to your property, but your landlord’s policy will cover damage to the building itself.

Actual cash surrender value versus replacement cost

Typically, you will have a choice of two types of personal property coverage on a tenant insurance policy: actual cash value or replacement cost. You may even have a third option, called Guaranteed Replacement Cost Coverage. These will determine how your coverage applies after taking the deductible into account.

Actual cash value (ACV) coverage will pay to replace your assets at their depreciated value. For example, if you bought a TV for $ 1,000 and it loses 10% of its value every year, after five years it will only be worth $ 500. If your TV is damaged, your claims adjuster will calculate depreciation to determine how much to pay for it. A more or less important depreciation can be taken according to the state of the television set. LCA policies are generally the cheapest option.

Replacement cost coverage will pay you the amount necessary to replace your damaged or destroyed items with comparable new items. For example, even though the television in the example above is five years old, a replacement cost policy will give you the $ 1,000 it would take to purchase a similar new television. Replacement cost policies are generally more expensive than ACV policies because they are willing to pay you a higher amount.

The guaranteed replacement cost goes even further. If your damaged or destroyed items cost more than the original value to replace, a guaranteed replacement cost policy will pay the higher amount. If it took $ 1,500 to replace your damaged TV, even though you only paid $ 1,000 when you bought it, a guaranteed replacement cost policy should pay the $ 1,500. Guaranteed Replacement Cost typically costs the most of these three options and may not be available at all companies.

What does tenant insurance not cover?

While tenant insurance offers good financial protection for its relatively low cost, not everything is covered. Some common exclusions on tenant insurance policies include:

  • Flood damage: If you live in an area prone to flooding and are concerned about your belongings being damaged by flooding, you may want to consider a separate flood insurance policy.
  • Damage caused by the earthquake: You may be able to add earthquake coverage to your policy by endorsement. If you live in an area of ​​the country where earthquakes are common, you may need a separate policy.
  • Damage caused by parasites: Because it is your landlord’s responsibility to maintain your rental home or apartment building, damage caused by pests, even to your personal effects, is generally excluded from an insurance policy. tenant. If your homeowner is deemed negligible for allowing a pest infestation, his homeowner’s insurance policy liability should cover your damage.
  • Damage or theft of your vehicle: To get coverage for your vehicle, you must have auto insurance. Your personal effects may be covered by your renters insurance policy if they are stolen, but the car itself or its damage is never covered by a renters insurance policy.
  • Your roommate’s business: Unless you and your roommate have a joint policy in which you are both listed as named insureds, your roommate’s property is not covered by your tenant insurance policy.
  • Damage beyond your policy limits: If you have a tenant insurance policy, you should consider the amount of coverage you need to replace your belongings. Your liability coverage will also only pay up to the limit you choose. However, damage you cause to the unit or injury to you or your family is not covered by renters’ insurance.

Every tenant insurance company is different, so talking to your agent is the best way to determine what is covered and what is not covered by your policy.

What customizations can you make to a tenant insurance policy?

Renters’ insurance policies often come with endorsements that you can add to customize your coverage. Common approval options include:

If you’re not sure how much tenant insurance you need or which coverages to choose, talking to a licensed agent can help you decide which policy options are right for you.

Frequently Asked Questions

How to choose a tenant insurance company?

There are many renters insurance companies on the market, and it can be difficult to shop around for coverage. One of the best ways to find coverage that meets your needs is to request quotes from multiple companies. This allows you to compare the covers, discounts and prices available.

Does my tenant insurance cover my pet?

Your renters insurance policy may extend your liability coverage to cover injuries that your pet causes to others, although certain breeds of dogs are frequently excluded from coverage. Exotic animals can also be excluded. If you are looking for health insurance coverage for your pet, you will need to purchase a pet insurance policy.

Will my home insurance pay my medical bills if I am injured?

No. Your tenant’s insurance medical payment coverage only applies to your guests, and your liability coverage only provides financial protection for injuries and damages for which you are held responsible. If you are injured on your property and your landlord is found to be at fault, their homeowners insurance can cover your medical bills. Otherwise, you will need to have health insurance to cover your injuries.


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