What Is Renters Insurance And What Does Renters Insurance Not Cover?
Renters insurance is a form of property insurance that covers losses to personal property and protects the insured from liability claims. This includes injuries occurring in your rental that aren’t due to a structural problem. Injuries due to structural problems are your landlord’s responsibility. Renters insurance protects anything from a studio apartment to an entire house or mobile home. What Does Renters Insurance Not Cover? Continue reading below.
Even if you’re just starting out or living in a place for a year, getting a renters insurance policy—probably the least expensive and easiest-to-obtain insurance you’ll ever own—could be a smart investment. You may not think you’ve got anything of great value, but you probably do—more than you could comfortably afford to replace in the event of a bad burglary or fire.
In addition, no matter how careful you may be with your own apartment (the sort of residence most renters have), you can’t control your neighbors. They can leave your security gates open, buzz ill-intentioned strangers into your building, or fall asleep with a cigarette in hand and start a serious fire.
While your landlord’s property insurance may cover the building itself, that insurance will not cover the contents of your apartment, nor will it cover the damages for which you could be sued by someone who had an accident within your apartment or rented space.
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What Does Renters Insurance Not Cover?
Renters insurance does not cover:
- Bed bugs and other pests
- Damage to your car
- Your roommate’s possessions
The personal property and liability coverage provided by renters insurance won’t protect you from all risks. For example, property damage due to floods won’t be covered and liability coverage for events related to dangerous dog breeds may also be excluded. Coverage may also be more limited for specific high-value items, such as jewelry. Here, we’ve listed some of the more common coverage exclusions and limits in renters insurance policies.
Renters insurance does not cover property damage for all perils
Renters insurance will rarely—or never—cover damage to your personal property for some specific perils, such as earthquakes, riots and pests.
Bed bugs and pests
Most renters insurance policies will not cover damage costs associated with bed bugs, with limited exceptions. Along with other pests, such as rodents, they are considered a maintenance issue, and not covered under your standard renters policy.
Earthquake and flood damage
Most standard renters policies do not cover earthquake or flood damage, though some companies may offer coverage as an add-on if you pay extrae. If you’re at risk for these perils and can’t get earthquake or flood coverage through your renters insurance policy, you’ll need to buy a separate flood or earthquake insurance policy for your personal property. These policies may be available from your renters insurance company or a different insurer.
Car theft or damage
If you own a car, its damage or theft will not be covered by your renters policy. You will need a car insurance policy with comprehensive coverage. Belongings inside your car at the time of the theft, however, are covered by renters insurance.
Renters insurance policies generally do not cover damage costs associated with your roommate’s belongings. In order for them to be covered they have to be listed on the policy, in which case you could split the cost of renters insurance.
We would recommend not adding roommates however, unless they are related or a spouse. Adding a non-relative to your policy may save you some money, but it will split coverage among all those assigned to the policy. So if your policy insured up to $20,000 in damage, you and your roommate would split that coverage for all your possessions.
How do renters insurance companies pay out claims?
Your insurer will only provide you with coverage for these events if you file a claim. A claim is a request policyholders make to their insurance company to compensate them for a covered loss. In the case of renters insurance, a policyholder would make a claim for damage or theft to personal belongings, personal liability coverage or additional living expenses incurred. For example, a property damage claims process will involve several steps.
- Before anything happens, create an inventory: You should create an inventory of all your possessions along with documents that determine their value, like receipts.
- Document the damage: After a qualifying event, such as a fire in your home, document all damaged items to prepare to make a claim.
- File the claim: Contact your insurer to begin the claims process. Your insurer will provide you with the necessary forms and and request documentation. Ultimately, the insurer will send a claims adjuster to assess the damage, and the adjuster will determine your reimbursement.
Filing a claim can sometimes be a long process, but the more information you have readily available for your insurer, the more likely you are to accelerate your claims process and receive timely compensation for your loss.