Two roommates eating take out and talking about renters insurance.

Renters Insurance Explained

Updated January 1, 1 . AmFam Team

Confused by renters insurance? This simple guide breaks down what renters insurance covers, what it doesn’t, and why it’s a necessity for any renter.

You’re a renter, and you love it. Apartment living brings its own unique freedom and flexibility. And just because you don’t own your home doesn’t mean you don’t own all the valuable stuff on the inside. It’s that stuff on the inside that makes you who are! And it needs to be protected. That’s what renters insurance is for — protecting the valuable stuff that matters to you.

Renters insurance coverage options range from replacing your personal property to protecting you from identity theft. And most renters policies are able to be customized to fit your lifestyle.

Not sure if renters insurance is right for you? Watch this video about common renters insurance myths, then keep reading to discover all the ways a policy can provide protection.

Before we dive into the coverages, let’s talk about coverage limits. Each renters insurance policy has coverage limits, which is the maximum amount your policy will pay should you have any personal property or liability losses. Your policy will outline this limit, or, just talk to your friendly insurance agent to get the details you need.

Now, here’s a snapshot of some of the basic coverages. The more you know, the easier it’ll be to choose the right policy for you.

Personal Property Coverage

The value of your belongings is usually more than you think. Personal property coverage ensures you’ll have the means to return your possessions back to normal should there be any damage from unforeseen events such as:

  • Fire
  • Water damage from plumbing, heating or cooling system
  • Theft
  • Power surges to electronics and appliances that you own

Many insurance companies also offer protection beyond these events — but then again, it depends on the insurance company. Events such as credit or debit card theft, forgery, fungi or bacteria, and inflation protection are just a few things that insurance companies can decide to include with their renters policies. Just make sure you do your research!

Liability Coverage

You probably hear the term tossed around quite frequently on your insurance documents — but what exactly is liability coverage? Say you have a guest over, and they trip down some stairs. If you’re found responsible for their medical expenses, that could be a hefty bill. But that’s where liability coverage kicks in!

Your policy can help provide financial protection against covered claims and lawsuits brought by others for accidental bodily injury or damage to their property caused by your personal activities, your children or your pets. Covered costs typically include the following:

  • Acts of the insureds’ pets
  • Claim and defense expenses
  • Liability due to unpaid volunteer services
  • Liability to others
  • Negligent acts of the insureds’ children

Loss of Use Coverage

Renters insurance has you covered — literally. Should your rental become inhabitable due to a qualifying loss (fire, water damage), many renters insurance policies reimburse you for hotel and other fees you might incur while you’re displaced. So no matter what, you’ll always have a roof over your head.

Optional Coverages

Most renters insurance policies are designed to be flexible enough to fit your unique lifestyle. There are many add-ons that can help protect things like pets, home businesses, expensive watch collections, etc. Your agent is ready to answer any questions and help you get the coverage you need.

Are Roommates Covered by Your Renters Insurance?

What about your roommate? Besides being messy and occasionally annoying, is their stuff covered under your renters policy? Renters insurance is largely designed for single people and traditional families, so when unrelated roommates enter the picture, things can get tricky.

If you have a renters policy, your roommates’ things are not automatically covered — unless they’re actually listed on the policy. However, it’s important to note that insurance laws vary by state, which means that some insurance companies can allow multiple roommates’ names to be listed on one renters insurance policy, and some don’t. There are some exceptions of course, so it’s always a good idea to consult with your agent to get all the rules on your specific policy.

Now that you’ve got the knowledge, you’re all set to navigate the world of renters insurance. Happy renting!

Tools & Resources

Explore our tools and smart tips.