What Is Renters Insurance and What Does It Cover?

Renters insurance is similar to homeowners insurance, but without the dwelling or structural coverage, since that is included in the landlord’s policy. It’s designed to protect the renter from burdensome out-of-pocket expenses when an unexpected event occurs, like a fire or robbery.

The covered expenses on renters insurance policies typically include the replacement of personal property, loss of use when displaced from your home and daily routine, and liability when you may be responsible for someone’s injury that happened in your home. When an unexpected covered event occurs, you file a claim with your provider and start receiving benefits according to the agreed upon amounts.

There are three main categories that are covered by renters insurance policies from certain events: personal property, liability, and loss of use. Any loss or expense under these categories occurring from an included event will be paid up to a certain amount. If you want additional options for coverage, most providers offer add-ons for your policy called endorsements that are great for renters looking for extra peace of mind.

Listed below are the basic categories included in most standard policies:

• Personal Property: Personal property coverage is the most important category for many people, since it gives renters peace of mind that their belongings will be replaced after a covered unexpected incident. There are typically two options when selecting your policy: actual cash value (ACV) and replacement cash value (RCV). ACV policies are typically cheaper since they only cover the depreciated value amount of your personal items.
• Liability: Liability coverage pays for expenses that could arise if you’re held responsible for someone else’s injury that occurred in your home. Liability insurance will take care of both medical expenses and legal fees if necessary. Some policies will cover medical payments for injuries that occur in your home, even if you’re not at fault.
• Loss of Use: This kind of coverage is paid out if you have any extra expenses to pay for after a covered event. For example, if you’re displaced from your home and have to pay for a hotel room and extra meals, your renters insurance would cover those costs.

What Renters Insurance Covers

Here are some examples of events that are covered, by typical renters insurance standard policies:

• Fire
• Smoke damage
• Falling object
• Explosions
• Theft
• Riots
• Lightning and Electrical damage
• Snow, sleet and ice

What Renters Insurance Does Not Cover

Here are some examples of events that are not covered, by typical renters insurance standard policies:

• Flood
• Earthquake
• Damage from pets
• Personal injuries
• Damage from pests
• Car damage
• Sinkholes
• Terrorism

Some of the above-listed events that aren’t covered in a basic policy can be added on as an endorsement at extra cost. When you get quotes from different companies, check what add-ons they offer and see what you might want to include.

Now that you understand what it is and why it may be worth it, you’ll need to know how to get renters insurance for yourself. The first step is to assess your needs based on your personal property valuation and other factors. You can start by taking inventory of your belongings and keeping track of them with a list.

Taking the time to determine the value of your personal property is important to guarantee that you don’t under-insure yourself when selecting your policy. You can access online tools to help you determine the best amount of coverage needed for each category.

Once you have an idea of how much coverage you need, you will have to select a top renters insurance provider. Through our intensive review process, we have found lemonade to be the best company for the majority of renters, but we recommend getting quotes from at least three providers before making a decision.

Renters insurance may be necessary if your landlord requires it upon move-in. Landlords often make having your own policy mandatory because they don’t want to be held responsible if someone gets injured in their tenant’s home. However, the tenant benefits from renters insurance policies as well by having their items protected from an event that may not fall under the landlord’s insurance.

Even if your landlord doesn’t require you to have your own policy, it can be worth it for your peace of mind and for protecting yourself from the financial burden of unexpected losses in the future. The good news is that there are some reasonably priced policies offered by trusted providers if you don’t want to commit too much money at first. Additionally, you may be able to save on your rate if you purchase a bundled policy from your auto insurance provider. You can use this online tool to get a free quote and start comparing companies in your area.

We at the Guides Home Team reviewed the top providers to determine who had the best renters insurance policies and why. Of these three companies, we suggest Lemonade because of its overall coverage options and affordability. Some additional features that we loved about the company are its automated quote calculator, quick sign-up process, user-friendly smartphone app for managing your policy and its giveback program that donates unused money to charity.

You can take a look at these features and see if a policy with Lemonade would be a good fit for you by visiting the company website and requesting a free quote, or by reading our complete Lemonade renters insurance review.

If you’re not located in one of the 28 states that Lemonade currently serves, you can always compare free quotes with this tool that will show you qualifying companies available in your area. We recommend getting estimates from at least three different companies to compare their prices and offerings.

Methodology

Through in-depth research of the industry, we determined the following factors and weights to rate each company by:

• Overall cost: 15/100
• Add-ons and discount options: 20/100
• Standard coverage: 17.5/100
• State availability: 5/100
• Support availability: 20/100
• Connectivity: 12.5/100
• Authority: 10/100

We used these rating factors to determine the best renters insurance companies to help with your decision when looking at policies. We routinely monitor and update data on a regular basis to ensure the reviews reflect the most up-to-date information and advice.

Bradford Cuthrell is a meticulous researcher and writer specializing in pet and home finance topics. He’s surveyed thousands of pet owners and homeowners, listened to hundreds of customer service calls from various home service companies and spoken with dozens of industry experts to understand homeowners’ common pain points and needs. When he’s not helping his readers make informed decisions, he’s reading a book a week, planning a camping trip or working on his novel draft.

Mark Carroll is a content director with more than a decade of writing and editing experience. He has researched and covered topics related to home finances, home improvement, and home products for MarketWatch, helping answer key consumer questions and connecting readers with the brands that meet their needs. Prior to his time in the home space, Mark worked in sports media as a news reporter and managing editor.