What It Means
Renters insurance is a policy for people who rent their home. It has three main parts: personal property coverage, which pays to repair or replace your belongings if they're damaged, destroyed or stolen; liabilityLiabilitiesDebts and other money you owe, such as a mortgage, a car loan or a credit card balance. Your assets minus your liabilities is your net worth. See more coverage, which pays if you cause injury or property damage to someone else, including your legal defense; and additional living expenses, which help pay for somewhere else to live if a covered disaster makes your place unlivable. The NAIC notes that a landlord's insurance won't pay for your belongings.
Try It: Add Up Your Belongings and Check Your Limit
Example numbers to start. Put in a rough value for each group of belongings and your policy's personal property limit.
Your belongings add up to more than the limit. Ask your insurer about raising it.
The limit covers what you've listed.
On an actual cash value policy, depreciation comes off each item's payout. Replacement cost coverage pays to replace it and costs more.
How It Sounds at Home
- "My landlord said their insurance won't cover my stuff."
- "After the fire, renters insurance paid for our hotel."
- "Is my bike covered if it gets stolen?"
The Breakdown
Worked example. A tenant lists what they own:
| Belongings | Value |
|---|---|
| Electronics | $4,000 |
| Furniture | $6,000 |
| Clothing | $3,000 |
| Kitchen | $1,500 |
| Everything else | $1,500 |
| Total | $16,000 |
Their policy's personal property limit is $15,000, so $1,000 of belongings sits above it. That's a reason to ask about a higher limit or check the list again.
Actual cash value or replacement cost. Say a laptop bought for $1,200 is worth half that now after wear and age (an example figure). An actual cash value policy takes depreciation off, so it would pay about $600 before the deductibleInsurance deductibleThe part of a covered loss you pay yourself before your home, renters or auto insurance pays the rest, set as a dollar amount or a percentage. See more. A replacement cost policy pays what a comparable new laptop costs. Triple-I notes replacement cost coverage costs more and can be well worth it.
What moves your number. The more you own, and the more of it is electronics or furniture, the higher the limit you need. A home inventoryHome inventoryA room-by-room record of what you own, with photos, values and receipts, kept to prove a loss to your insurer after a fire, theft or storm. See more makes the list quick to build.
Good to Know
Triple-I says liability limits on renters policies generally start at about $100,000, and liability pays both your defense and any court award up to the limit. Additional living expenses apply only when the damage comes from something your policy covers, so read the list of covered causes in your policy.
FAQ
What does renters insurance cover?
Your belongings if they're damaged, destroyed or stolen, your liability if you hurt someone or damage their property, and extra living costsCost of livingWhat it costs to keep a certain standard of living, such as housing, food and transportation, in a given place at a given time. See more if a covered disaster forces you out, per Triple-I and the NAIC.
Doesn't my landlord's insurance cover my things?
No. The NAIC says a landlord's or property manager's policy won't pay for a tenant's damaged or stolen belongings.
How much renters insurance do I need?
Enough personal property coverage to replace what you own, which a home inventory helps you total, and a liability limit that fits your situation. Triple-I says liability limits generally start around $100,000.
Do It in Buhata
Vault (Plus), Bills (Plus)
With Plus, add the renters insurance premium to Bills so the renewal date is on your calendar, and keep the policy and your inventory in Vault.
Open BuhataRelated Terms and Categories
- Home inventory
A room-by-room record of what you own, with photos, values and receipts, kept to prove a loss to your insurer after a fire, theft or storm.
- Insurance deductible
The part of a covered loss you pay yourself before your home, renters or auto insurance pays the rest, set as a dollar amount or a percentage.
- Homeowners insurance claim
A request to your homeowners insurer to pay for damage or loss the policy covers, backed by photos, a list of what was lost and your receipts.
- Insurance premium
The amount you pay to keep an insurance plan, such as health insurance, in force, usually monthly, quarterly or yearly, whether or not you use any care.
- Rent reporting
Having your rent payments added to your credit reports, through your landlord or a reporting service, so on-time rent can count toward some credit scores.
Sources
NAIC, "Renting Your Home? Protect Your Belongings with Renters Insurance"; NAIC, "What are Additional Living Expenses and How Can Insurance Help?"; Triple-I (Insurance Information Institute), "Renters Insurance"; Triple-I, "Your renters insurance guide"
- content.naic.org/article/consumer-insight-renting-your-home-protect-your-belongings-renters-insurance
- content.naic.org/article/what-are-additional-living-expenses-and-how-can-insurance-help
- www.iii.org/article/renters-insurance
- www.iii.org/article/your-renters-insurance-guide
Last updated .