What Does Renters Insurance Cover (and Not Cover)?

Renters often underestimate what renters insurance can do for them, but it covers more of everyday life than you might realize. Most policies cover theft and damage to your belongings, liability, and more. If your bike is stolen from the front porch, your TV falls off the wall and shatters, or a guest trips on the stairs and breaks a leg, your renters insurance policy can protect you. However, a few things aren’t covered, or you may have to pay extra for them.

What renters insurance covers

Here are the main ways renters insurance can cover you in case of an emergency or catastrophe:

Personal property coverage

“Personal property” is simply an insurance term for your stuff — clothing, furniture, electronics, collectibles, and more. Typically, with a renters policy, these belongings are covered up to your policy limits if they’re lost or damaged by a covered event, or “named peril.” Covered events usually include things like fire or smoke, wind or hail, lightning, burst or frozen pipes, and theft or vandalism. In practice: If your PlayStation is stolen, that’s likely covered, but if it just dies, that’s not.

If you have any higher-value belongings, like artworks or fine jewelry, you can purchase additional coverage in the form of a rider or floater that’s added to your policy. 

Most policies cover personal property in actual cash value (ACV), meaning the value at the time of loss, factoring in depreciation. If you paid $1,000 for your laptop when you bought it 3 years ago, it’s safe to say you wouldn’t get the full $1,000 back if it’s stolen today.

However, for a bit more money, you can opt for replacement-cost coverage instead. This covers the cost of a new, equivalent replacement laptop today, without depreciation factored in.

Additional living expenses

Typically, renters insurance covers additional living expenses, often abbreviated to “ALE,” if a covered event renders your rental uninhabitable. This is often called “loss of use coverage,” and it pays for hotels or alternative housing, plus meals, laundry, parking, and other necessities. 

This renters insurance benefit is often overlooked, but it can be crucial if disaster strikes: If a fire damages your home and you have to stay in a hotel for several weeks while it's repaired, could you afford that hotel bill? (Not to mention, having to eat out for that long.) ALE can help cover the difference between your normal housing costs and your temporary ones until you can move back in.

Note that loss-of-use coverage has limits, often a percentage of your total personal property coverage, so keep that in mind when choosing your coverage amount.

Liability coverage

Liability coverage protects you if someone is injured in your rental, including legal fees, damages, and medical bills. That includes injury or damage caused by your pet, like a dog bite (some breeds are restricted or banned by some insurers, though, so check your policy carefully if you’re a dog owner). 

It also usually covers damage you accidentally cause to other people’s property — for example, letting your tub overflow so that it leaks into the unit below. 

In addition, liability coverage can provide significant financial protection in the event of a lawsuit. That coverage commonly starts at $100,000 even for basic policies, but you can raise it to $3000,000 or more for a relatively slight increase in your premium.

Medical payments to others

Medical payment coverage is separate from liability coverage. It covers minor expenses for visitors injured in your home. It is no-fault coverage, so it applies regardless of whether you are legally at fault. For example, if a visitor slips on a wet spot in your kitchen, requiring X-rays, this would cover that cost (up to your limit). It can also apply outside of your rental home, for instance, if you bump into someone on a jogging path and they fall and need stitches. 

Limits for this coverage are typically fairly low: between $1,000 and $5,000. With Zillow Insurance Services, the default coverage is $1,000, but you can also select $3,000 or $5,000. It’s meant to cover emergency help, like an ambulance ride or an urgent-care visit, but it’s not a long-term solution. Medical payment coverage can’t replace health insurance.

What renters insurance does not cover

It’s equally important to understand what your renters insurance policy doesn’t cover — especially because there are some common misconceptions on the topic. Generally, your renters insurance policy will not cover:

Earthquake and flood damage

Contrary to popular belief, standard renters policies don't cover earthquake damage. However, you can purchase a rider for it, and the additional cost may be worth it in areas where quakes are more common. Zillow data shows California has the highest rate of earthquake coverage, at 55%.

Floods are more complicated. Renters insurance covers water damage to your belongings caused by a burst pipe or a leak from another unit. However, flooding caused by outside factors, like a hurricane, is not. This type of flood coverage requires a separate flood policy (even for homeowners). If you rent in a flood-prone area, the National Flood Insurance Program can help you find a provider and purchase a policy. The cost will vary widely based on your proximity to a body of water (flood zone) and your deductible and coverage amounts.

Pest infestations

Problems due to uninvited guests like bedbugs, termites, mice, and other pests are not covered by renters insurance. These are typically considered preventable with proper maintenance, so check your lease to see how pest control is handled in your rental. Your landlord may be required to provide pest control.

Roommates’ belongings

Renters insurance only covers the belongings of the renters named on the policy (and typically their spouses or children). If you have a roommate who is not related to you and their name isn’t on your policy, their personal property isn’t covered. 

Intentional damage

If you intentionally damage your rental unit, renters insurance won’t cover it. (If you’re thinking “Why would I damage my home on purpose?”, try to put yourself in the mindset of a landlord: “Intentional damage” could mean making modifications, like tearing out built-ins or putting up a wall, or even painting without express permission.) This also includes damage done on purpose to file a claim (which is insurance fraud). 

Normal wear and tear

Renters insurance covers items that are damaged by a covered peril, not items that just break. So if your sofa is ruined by a fire in your apartment, that’s covered. If it’s just worn out because you’ve used it every day for years, that’s not. Some items may be covered by a manufacturer’s warranty or credit card protections, though.

Business or commercial activity

If you’re running a business out of your home, your renters insurance generally won’t cover damages or liability related to your commercial activities. This includes client visits and business-related personal property, like tools or computer equipment. Separate business insurance, or a business-insurance rider on your policy if available, is required to protect against these.

High-value items above sub-limits

Costly items like fine jewelry and antiques won’t be fully covered by your policy if they’re valued above your coverage limit. To cover these items specifically, you’ll need to pay for additional coverage, either as a rider or a separate personal property policy.

Car accident or damage

Renters insurance typically covers personal property that’s stolen out of your car, but it doesn’t cover the car itself. If your car is stolen, involved in an accident, or damaged, even while parked on the rental premises, that’s not covered. Separate auto insurance is required.

Does renters insurance cover you outside your home?

In many cases, yes. The personal property coverage that comes with your renters insurance policy typically follows where your property goes, so you’d be covered even if the loss or damage happens elsewhere. (Check your policy carefully to be sure, because circumstances may vary.) 

For example, these scenarios are likely to be covered by a typical renters insurance policy: 

• Your phone is stolen at a coffee shop
• Your bike is taken from a bike rack
• Sports equipment is stolen from your car (yes, this is covered by renters insurance, not car insurance)
• Clothing is damaged while in storage (storage-unit coverage is often capped at 10% of your personal property coverage limit)

How much renters insurance do you need?

Everyone’s needs are different, but a renters insurance policy is fairly affordable: The average cost of renters insurance is just $14 per month, and Zillow offers coverage for as low as $8.33 per month. Here are some steps to help determine the right coverage amount for you:

Take a home inventory

Start by listing all your belongings (it’s OK to group rooms or items together, like “bedroom furniture” or “kitchen appliances”) and their approximate value. Take photos of especially valuable items, and keep a file of any appraisals or receipts. 

Select coverage amounts

To determine the right personal property amount, add it all up — the grand total of your inventory can give you a good idea of how much personal property coverage you may need. For liability coverage, most renters policies come with $100,000 as standard. But for a couple of dollars more per month, you can increase that to $300,000 or more. Ask your insurance professional for guidance.

Select deductible amount

Consider how much you’re willing and able to pay out of pocket if you have to make a claim. Higher deductibles come with lower premiums, but make sure you’d be comfortable actually parting with that higher amount if something happens.

Add riders if needed

Own high-value items that need their own specific coverage? Live in an earthquake-prone area? You can tack additional coverage onto your policy as needed. For example, Zillow Insurance Services typically offers earthquake riders ranging from $15–$45 per month, depending on house type and location. 

Choose between actual cost value or replacement cost value

Actual cost value, which is generally standard, takes depreciation into account when determining how much you’ll receive from your claim. If your $800 sofa is ruined by a leak from an upstairs unit, for instance, you may only get a few hundred dollars for it. Replacement cost value, on the other hand, costs a bit more upfront, but pays out the amount it would cost to replace the ruined item with a comparable new one, without depreciation.

Frequently asked questions

Disclaimer: This story provides general guidance about renters insurance. Please consult your insurer or insurance professional for advice specific to your situation.