Does Renters Insurance Cover Theft?

Imagine finding that your apartment window has been smashed in and a thief has stolen your favorite sunglasses, your golf clubs and your computer. As you review the damage, you realize your possessions are a total loss.

Or are they? After a few minutes of processing your anger, you realize that the renters insurance you purchased to cover your apartment might also apply to your possessions. Let’s do an overview of how basic renters insurance works, the different coverages available, how much you can expect to pay, and whether renters insurance covers theft of your personal possessions.

Renters insurance provides replacement value on your personal property while you occupy a dwelling owned by someone else. While policies and their costs vary, renters insurance typically covers property lost to fire/smoke, theft, natural disasters, vandalism and water damage from internal problems such as burst pipes (but usually not a natural flood).

In addition to property coverage, renters insurance can cover the holder’s liability in the case of accidents occurring on the rental property. It also can provide compensation in case a renter is forced to relocate temporarily due to a disaster that is covered by the policy.

In 2021, there were about 44 million American households being rented. Unlike homeowners insurance, which is required by your mortgage lender, renters insurance is not a requirement —although some landlords will insist that you get insurance as a condition of the lease. Regardless, many people who lease their homes do purchase a renters insurance policy for added protection.

What Does Renters Insurance Cover? And What Does It Not?

• Personal property: Any of your personal possessions that are stolen or damaged by a covered disaster such as fire or vandalism; damage caused by an earthquake or flood are typically not covered; for coverage of high-dollar items, such as fine artwork or expensive jewelry, you can itemize these possessions and pay a higher premium.

• Personal liability: Covers your expenses if you’re found legally responsible for someone else’s injuries or property damage in your rented home; pays for another person’s medical bills or repairs or replacement of their damaged or stolen property; does not apply if injuries or damage are deemed intentional.

• Additional living expenses or loss of use: Protects you from having to pay living expenses if your home becomes uninhabitable, as in the case of a fire or burst pipe, for example; most policies do not cover perils such as bedbugs, and for coverage against earthquake or flood damage, you will have to pay for added protection in a rider called an endorsement.

Many renters insurance policies include theft coverage, which protects your personal belongings as they’re transported and once they’re inside your home. So whether your personal items are stolen from your vehicle, hotel room, storage unit or moving truck, your policy should have you covered. The policy will have a deductible, which is the amount of money deducted from an insurance claim check.

Does Renters Insurance Cover Car Theft?

A renters insurance policy will not cover the theft of the actual vehicle or parts of the vehicle (such as wheels), but will cover things that are taken from the vehicle. Theft of the vehicle is usually covered by an auto insurance policy. However, the most basic auto policies, such as liability insurance, often do not cover vehicle theft.

Also note that renters insurance will not cover the theft of other vehicles, such as motorbikes, RVs, boats or other personal watercraft, snow machines, etc. — whether these machines are trailered to your vehicle or sitting on your driveway. This applies whether they are in or on the vehicle (like in the bed of a pickup truck) or on a trailer being hauled by the vehicle. There are separate kinds of policies that cover each of these types of vehicles as well as enclosed cargo trailers and the items they carry.

Does Renters Insurance Cover Bike Theft?

In general, yes. Most renters insurance policies will cover the theft of your bicycle, whether it’s stolen from your garage or from a public bike rack. Some plans will also cover the loss of an e-bike or scooter, but be sure to make note of the details. Your renters coverage will not replace a stolen motorcycle.

Does Renters Insurance Cover Theft Outside The Home?

Almost any of your personal possessions that are stolen when they’re not in your actual home are still covered by your renters insurance. Examples would be if your watch was snatched up off your beach towel, your luggage is stolen off the baggage carousel at the airport, or if you’re mugged. Yes, cash is covered, but in many policies, there is a limit to the amount of cash you can claim because it is difficult to verify.

The language of your renters insurance policy will likely refer to its covering of your lost or stolen items as either replacement cost value (RCV) or actual cash value (ACV). RCV is defined as the amount it will require to replace the lost item at today’s cost. This is more desirable — and therefore offered at a higher premium — because it restores the policyholder’s situation to what it was before the loss.

ACV refers to the market value of your property with depreciation cost considered. For example, say an expensive rug you purchased 5 years earlier is destroyed in a fire. The rug would be valued at the market rate as a 5-year-old rug and not a brand-new rug. Coverage at ACV comes at a lower premium because claim payments are lower than the replacement cost option.

Though it can be affordable — in most states, it can be about what you would pay for a television streaming service each month — renters insurance is still a month-to-month expense that you must be comfortable budgeting for. Keep in mind that, as mentioned earlier, some landlords may require you to have renters insurance as part of your lease agreement.

If you’re the type of person who has highly expendable possessions, or very few belongings, you might be better off spending your money elsewhere. But if you have some nice things, it is advisable that you have some sort of renters insurance, especially if you live and/or work in a place that has a higher crime rate.

And don’t forget, your renters insurance can also cover you for liability should someone be injured in your home. And if there is damage to your home that makes it temporarily uninhabitable, renters insurance can cover your living expenses somewhere else.

Here are some things to consider when trying to decide if you need to purchase renters insurance.

How much does renters insurance cost?

According to Forbes, the national average cost of renters insurance (known as the premium) covering $15,000 worth of personal property is just over $10 per month, or $125 annually.

The state with the lowest average premium for renters was North Carolina at $62 per year, while renters in Lousiana paid the most at $252 for a year. Things that contribute to higher or lower rates include state laws and regulations, as well as crime rates and the likelihood of natural disasters.

How do I get renters insurance?

It’s relatively easy to get a policy, once you have an actual residence leased. You can get a free quote online, over the phone or in person. It’s best to get quotes from numerous companies, so you can compare costs and coverage. If you use the same insurance company that covers your car, you may get a discount for bundling the policies.

Before you start really considering a particular policy, you should be aware of the different kinds of coverages and which ones you really need. You should also add up the value of your possessions. These can include furniture, artwork, jewelry, clothing, accessories, any appliances that do not come with the home, and sporting goods or equipment. This will help you determine how much coverage you need.

What happens if my belongings are stolen while traveling or away?

Any possession covered by your renters insurance is covered if lost, no matter where you or the items were when they were lost or damaged, or for what reason. The only exception is if the loss is by your own intent. If you toss your golf clubs into the pond by the 18^th green, for instance, they will not be covered.

Does renters insurance cover damage from a house or car break-in?

Only if the break-in results in the loss of, or damage to, your personal property. In the case of a car break-in, the smashed window would be covered by your auto insurance, but if the thief sits on your prized sunglasses, your renters insurance would cover that loss. Same thing with your home. Your landlord’s homeowners insurance would cover the broken-down door, but anything the thief steals is covered by your renters insurance.

When you own a home, your homeowner’s insurance covers not just the structure but also your possessions. Not so when you lease. Your landlord’s insurance policy covers the apartment building or house you live in, but it does not cover anything that you keep inside. You need renters insurance to cover your possessions. The good news is that this kind of insurance protects your possessions whether they are in your home, your car, your place of work, even when you are on vacation. Virtually, wherever your possessions are, they’re covered by renters insurance.

And while renters insurance is relatively inexpensive, rent is typically not. In fact, many people are surprised that, once they do buy their first home, their monthly mortgage payment is significantly less than their last rent payment. If you feel like you are on firm financial ground and thinking about homeownership, learn how to decide if you should keep renting or buy a home.