Protection for your things. Peace of mind for you. Here’s what renters insurance covers.

According to the National Association of Insurance Commissions (NAIC), the average premium for renters insurance costs about $15 a month.

So, why is it that only a little more than half of renters (57 percent) in the U.S. have this important coverage?

For about the same cost as your monthly Amazon Prime subscription, a renters insurance policy can provide a whole lot of value that can bring you a great amount of peace of mind. Technically referred to as an HO-4 policy, renters insurance covers a wide range of unexpected disasters that are beyond your control, such as:

  • Fire and smoke                                                                                         
  • Lightning
  • Storms (e.g., hail, snow, and rain)                                                                                                             
  • Theft/vandalism
  • Natural disasters (excluding floods, earthquakes, and sinkholes)
  • Explosions
  • Water overflows (e.g., from pipes, toilets, sinks, tubs, and showers)

What does renters insurance cover?

Renters insurance offers three basic types of protection that not only pays you if your things are damaged or stolen, but it can also pay others if you’re ever responsible for accidentally causing damage to their things. Here are a few more details about what’s covered by renters insurance:

Personal property

This type of coverage protects your belongings, such as: furniture, clothing, TV, kitchen items, bed linens, musical instruments, and various sporting equipment you may have, like bicycles, tennis racquets, etc. Plus, it can cover your electronics like your laptop or cell phone.

Jewelry, art, and other valuables may also be included under personal property, but typically only up to a certain amount. You can easily cover these types of items by adding a rider (or floater) to your renters insurance policy. This way any highly valued pieces will be protected if they are ever stolen, damaged or destroyed by a risk that’s covered in your policy.


In general, this coverage can pay for losses if you accidentally hurt someone else or damage something they own, whether it’s in your apartment at the time the incident occurs or not. For example, renters insurance could cover your friend’s skis, if you borrow them one weekend . . . and then they are stolen from your car while it’s parked overnight.

Liability coverage can also pay for:

  • Medical payments to someone if he or she gets hurt while at your place and must receive medical attention and treatment.
  • Damage your pet(s) may cause to a neighbor’s property. (Think area rugs.)
  • Luggage that’s stolen when you’re on a trip.

Additional living expenses

If a fire destroys your building and prevents you from living in your apartment, this coverage can reimburse you for the extra expenses you would have to pay (beyond your normal living costs) to find a temporary place to live while your apartment is rebuilt. Cleaning services, food, hotel bills, and laundry charges you must pay as a result of the fire are just a few examples of the type of expenses this can cover.

Actual cash value vs replacement cost value?

When looking at a renters insurance policy, it’s also important to consider how it pays to replace your damaged goods. Policies offer two ways:

Actual cash value which means it can pay to replace your possessions minus a depreciation amount. In other words, it pays you for what your item is worth at the time it was damaged, not what you may have paid for it at the time you bought it.

Replacement cost value pays for the actual cost of replacing your lost or damaged possessions with a brand new item at the time of your claim, usually up to the amount stated in your policy. While you may pay more for this type of coverage, you are more likely to receive enough money to cover the cost of your new items.

What does renters insurance not cover?

In general, renters insurance does not cover:

  • Floods
  • Earthquakes
  • Mudslides
  • Sinkholes
  • Mice and rats
  • Bedbugs, roaches and other pests
  • Terrorism
  • Riots
  • Damage to your car
  • Your roommate’s belongings

If the unexpected strikes, it pays to have renters insurance. Need to figure out how much coverage you need? Want help exploring your options? Connect with the Guided team to learn more.


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