Nowadays, many landlords are requiring tenants to carry renter's insurance, a form of property insurance that provides coverage for losses to the tenant's personal belongings and liability claims occurring within the leased units, since the landlord's own insurance will not cover these things.
But what, specifically, does a standard HO-4 policy designed for renters include? Here are some of the more common misadventures and perils that are and aren't covered. In all cases, of course, the policy deductible must be met before any reimbursement can occur. And how much you receive depends on whether, when taking out the insurance, you opted for replacement cost coverage, which provides the amount needed to buy a new equivalent of the lost or damaged item, or actual cash value coverage, which only pays what the item is currently worth (think garage-sale prices).
An all-perils renter's insurance policy provides worldwide theft coverage for personal property. It doesn't matter where you travel as an insured renter: Theft coverage travels with your belongings.
An all-perils renter's insurance policy does not cover the theft of a vehicle. It does, however, provide coverage for personal property stolen with a vehicle or from a vehicle, and this applies wherever the vehicle is: in your home town, out of state or out of the country.
Bikes count as personal property, and as such, are fully insured. If you have an especially expensive model, it might be best to schedule it on the policy, as when insuring anything unique or of high value.
Coverage varies from company to company and state to state. An all-perils renter's insurance policy typically provides a low set amount of coverage for damage caused by mold as long as it occurred from a covered peril. In a named-perils policy, mold coverage must be specifically included. If it isn't, mold coverage may be purchased through a rider.
The insured must make a good faith effort to remedy the problem as soon as it is detected. This includes contacting the owner or property manager of the structure. The owner is responsible for repairing and mitigating any mold, and dealing with the water leak or whatever caused damage in the first place. Both the tenant and owner policies could be used together to subrogate claims.
An all-perils renter's insurance policy does cover water damage, if the damage is a result of a water leak inside the structure, like from a burst pipe or faulty water sprinkler, say. Damage caused by rising water from an exterior source, such as a flood, would not be covered by renter's insurance. Separate flood insurance would need to be purchased through the National Flood Insurance Program or a private carrier that offers flood insurance in the region where the dwelling is located (though you need only buy coverage for your belongings, not the building itself).
An all-perils renter's insurance policy provides coverage for the contents of storage units, excluding autos. It does not matter where a storage unit is located. Most policies limit the amount of off-premise coverage to around 10% of the total personal property coverage. Limits on the types of covered perils still apply. In certain areas, perils such as earthquakes and hurricanes may not be covered. Flooding from external rising waters would not be covered under a renter's insurance policy, either.
Renter's insurance provides two main forms of coverage – liability and contents insurance. The liability insurance portion of your coverage can protect you in case a visitor is injured on your property.
In the event of a lawsuit, your renter's insurance policy would cover the legal costs and any payouts that you would be responsible for if you are found legally liable. Some examples of payouts would be a medical bill directly related to the accident or replacement of a third party's property that was damaged in your home.
Depending on your policy, your family members may also be covered against personal injury. For example, if your son, who lives with you in your rented apartment, has a guest over and that guest suffers a slip-and-fall injury due to your son's negligence, your renter's insurance would cover the legal costs and medical expenses of the guest.
Most renter's insurance does not offer coverage, or at least full coverage, for pet damage. A policy that does usually includes clauses in the contract specifying the types of scenarios in which the coverage applies.
Usually, it has to do with someone else, or someone else's property. A prime example: If your dog rips up the carpet in your own apartment, it may not be covered, but if the dog chews up the alligator suitcase belonging to a house guest, it may be. Basically, if your pet is legally responsible for damage to a visitor's belongings, or bodily injury to the visitor, chances are that the pet coverage will assume the liability.
Renter's insurance policies do not cover bed bug infestations. Bed bugs are typically included in the same category as other vermin, such as cockroaches and mice. Detecting and cleaning a bed bug infestation is considered a maintenance expense and a responsibility of a renter.
An all-perils renter's insurance policy covers damage to items resulting from a covered peril during a move, such as theft. Fire and water damage would also qualify you to file a claim. But limitations and exceptions to this coverage apply. Most policies do not cover general damage to items resulting from a move, such as broken dishes or furniture.
If you hire a moving company, the company is responsible for getting the items moved without damage. Check into a moving company's liability insurance to make sure it offers replacement cost coverage on any damaged items; often, the moving company's insurance settles claims based on weight or the items' actual cash value.
The Bottom Line
After you buy a policy, take an inventory of all of your personal belongings, and include photos and appraisals. Store this list in a safe place (outside your home) or online. By inventorying items, insured renters can be properly prepared in the event of a claim. In the event of a loss, report the claim to the insurance company as soon as possible.