Does Renter’s Insurance Cover Theft?

Renting an apartment or house and looking for ways to minimize expenses? You have lots of options.

You can split costs with a roommate, or buy used IKEA furniture instead of new pieces from that cute boutique around the corner. You can rent a smaller place, an older place, one with paint that has seen better days, or one without onsite yoga classes. You can even try asking for a break on the rent. (It never hurts to ask.)

The one thing you absolutely cannot allow yourself to do, however, is going without a renter’s insurance policy. That’s non-negotiable. You’ll never regret getting a policy, but you may very well regret not getting one — especially considering how inexpensive it can be.

What Is Renter’s Insurance?

Renter’s insurance provides financial protection to people renting a house, apartment or condo, according to Greg Pannhausen of Farmer’s Insurance.

“(It can) help cover the costs of damages or losses that may occur to the renter’s personal belongings and liability claims that may arise in the rented property,” Pannhausen says.

In layperson’s terms, this means renter’s insurance can:

• Cover the costs to repair or replace your stuff if it’s damaged, destroyed or stolen. This can apply to everything from furniture and electronics to clothing, dishes and most other things in your rental unit.
• Fully or partially pay for medical expenses associated with an accidental injury to a visitor while on the premises.
• Provide funds to repair any damage you caused to the rental unit or property.
• Cover your legal fees or any punitive/compensatory damages if a lawsuit results from these injuries or damages.
• Foot the bill for living expenses if a fire or similar disaster makes your rental property uninhabitable.

Is Renter’s Insurance Required?

No. According to Pat Howard, a licensed property and casualty agent with Policygenuis, the law doesn’t require you to have renter’s insurance. However, your landlord may insist on it. And if they don’t, get it anyway.

“Landlords often require it to lower their own liability exposure,” Howard says. If all tenants have renter’s insurance, it keeps the landlord off the hook financially if one of your guests gets hurt on the property, or if you cause property damage beyond normal wear and tear.

“It is also a way for landlords to protect themselves financially in case tenants try to collect payment [from the landlord] for things they’re responsible for as a tenant,” he says. One example: A stolen laptop. “You wouldn’t go to the landlord to replace it,” Howard says. “Instead, with renter’s insurance, you can file a claim to be reimbursed for a new one.”

This brings us to some frequently asked questions about renter’s insurance.

Does Renter’s Insurance Cover Theft?

Yes. That stolen laptop, your backpack, espresso machine, Nintendo Switch … all covered.

You’ll probably have a deductible, i.e. a set dollar amount you’ll pay out of pocket before the insurance kicks in. Deductibles vary policy to policy.

Does Renter’s Insurance Cover Fire Damage and Loss?

Yes. If a fire damages your apartment and you need to temporarily relocate, your policy covers your living expenses during this period. It will also cover things in the apartment damaged or destroyed.

Does Renter’s Insurance Cover Water Damage and Loss?

Unfortunately, this one is a little trickier. Renter’s insurance only protects you from certain types of water damage.

You’ll probably have coverage for plumbing-related incidents, like a pipe bursting. If water damage results from a flood or some other act of nature, however, your renter’s insurance policy is unlikely to offer you protection. To be sure of what your policy does or doesn’t cover, read the fine print and ask your agent.

Does Renter’s Insurance Cover Storage Units?

Yes! This is one of the really cool things about renter’s insurance — it covers the items in your rental unit as well as “off-premises” coverage, says Howard. This means that you have coverage for things in a storage unit, on or off the property.

Same goes for hotel rooms or vacation rentals. If a thief breaks in and steals your suitcase or ski equipment, your renter’s insurance policy most likely has your back.

Does Renter’s Insurance Cover My Car in My Apartment’s Parking Garage?

Not the car itself.

Let’s say the roof of the parking garage caves in during a storm. The comprehensive portion of your auto insurance, rather than your renter’s insurance, covers the damage to your car. If anything inside the car sustains damage, your renter’s insurance covers that.

What Does Renter’s Insurance Not Cover?

While renter’s insurance covers a lot, it does not cover everything. Because policies and coverages vary, you’ll need to speak to an agent about your particular situation, says Cherie Lindsey, an insurance agent with Country Financial.

While this is not an exhaustive list, for the most part renter’s insurance does not cover:

• Floods and earthquakes.
• Intentional damage. Did you punch holes in the walls or flush socks down the toilet to “get back” at your landlord for something? Not covered.
• Business-related losses. Pannhausen says renters who operate a business from their rental property may need to purchase separate business insurance.
• Pest damage.
• Damage by your pet — say, carpet ruined by an incontinent cat.

Does Renter’s Insurance Cover My Roommate’s Belongings?

Sharing an apartment with your two best friends? Make sure everyone has their own renter’s insurance policy, because if something happens, each person will need to file their own claim. Their policies will not cover your damaged or stolen items and vice versa, says Lindsey.

What About My High-Value Items?

While your policy protects most of your personal belongings from theft and damage, there are exceptions and exclusions. Your policy will likely have coverage limits for things like jewelry and artwork, Pannhausen says.

“If a renter owns a high-value item, they may need to purchase additional coverage or a separate policy to ensure they are adequately protected,” he says.

Not sure whether any of your things fall into the high-value category? Ask your agent.

How Much Does Renter’s Insurance Cost?

Perhaps one of the best things about renter’s insurance is the affordability, especially in comparison to the value of all your personal belongings. The most recent data from the National Association of Insurance Commissioners indicates renter’s insurance costs an average of $173 per year, or about $14 per month, Howard says.

Your cost will depend on where you live, the amount of coverage, your deductible, etc. My renter’s insurance runs $206 per year for a family of three in a four-bedroom house. Rest assured, it’s worth every penny.

“For a relatively low cost, [it] is an invaluable safety net that no renter should be without,” Howard says.