What is not covered by renters insurance?

Insurance companies have a wealth of options available to renters seeking to insure themselves against property damage and legal liability.

In addition to standard coverage, renters can tack on special insurance riders for particularly valuable items, choose replacement-value or cash-value coverage as befits their needs and customize their deductibles. However, even renters who have fully engaged in the customization process should be aware that some things will remain outside their renters insurance coverage.

Standard Exemptions from Coverage

Renters who elect to buy basic, standard and un-personalized renters insurance policies will find that most insurance companies regularly exclude certain things from coverage. In general, emergencies and other causes of damage are excluded from coverage if they are large-scale, unpredictable or heavily damaging to property and possessions. Collectively, these events are often referred to in legal terms as “acts of God.”

To qualify as an act of God, an event must be beyond human control. It also cannot have been immediately caused by human intervention or action. The most commonly cited examples of acts of God are floods and earthquakes. However, under the legally accepted definition, almost any natural disaster may potentially qualify as an act of God. Renters will need to read their specific policies carefully to determine what is covered by renters insurance and what their insurance companies exclude from coverage under this category.

In many cases, renters can purchase additional insurance to protect themselves and their families against acts of God and other such catastrophic events. Renters may wish to research and purchase flood insurance, hazard insurance and/or catastrophe insurance, in particular, on top of their conventional renters insurance policies.

  • Flood insurance specifically insures renters’ possessions against water damage caused by flooding. Renters living in areas designated as flood plains by the National Flood Insurance Program (NFIP) may be required to hold a flood insurance policy as a condition of their leases. They can also expect to pay more for flood insurance coverage than residents of other areas. Renters who live in geographic areas prone to hurricanes or tornadoes may also wish to investigate flood insurance, as insurance companies handle water damage due to flooding in the wake of these storms is handled entirely separately from damage caused by any other facet of such storms (e.g. wind damage).
  • Hazard insurance provides renters with insurance protection against major natural disasters (other than flooding) that would otherwise not be covered by their policies. Examples of acts of God that can be covered under designated hazard insurance policies are earthquakes and forest fires. Again, it is important for renters to review their policies carefully to verify which hazards their additional insurance riders cover. Events or emergencies must be clearly stated as covered or they will not qualify for payouts.
  • Catastrophe insurance is similar to hazard insurance, except that it can be purchased to cover not only extremely specific hazards (e.g. volcanic eruptions, hurricanes and tornadoes) but human-caused disasters as well. For example, acts of terrorism are only covered under highly specialized catastrophe insurance riders.

In most cases, damage caused to a policyholder’s belongings as the result of a backup of sewage into the home is not covered by renters insurance. In rare circumstances, sewage backups may be covered if the backup was caused by an incident or emergency covered under the renters’ policies. Find more information and resources for renters here.

Specialty Items

Even when renters’ belongings are covered under standard and/or supplemental renters insurance plans, it is important for policyholders to be aware that renters insurance policies frequently cap the reimbursements for certain items by category. For example, jewelry, artwork and antique furniture are often covered up to a generic price cap rather than for their full specific value. For instance, a renter who holds a replacement value insurance policy might receive only $2,000 for a lost engagement ring worth $4,000 if $2,000 is the insurance company’s jewelry category reimbursement cap.

Expensive electronic devices and rare or professional-grade hobby equipment (such as cameras and their accessories) may also be covered at less than their full replacement value unless detailed insurance riders are taken out on them. It is important to note that the type of renters insurance (regular, hazard, flood or catastrophe) and source of the damage do not change or alter these caps. Only taking out additional coverage will ensure that renters receive the full value of their items.

Negligence

Renters insurance generally does not cover or provide reimbursements for property or possessions that are lost or damaged due to renters’ personal negligence. Intentional destruction or damage of belongings also disqualifies renters from receiving insurance compensation. For instance, renters who carelessly leave a kitchen towel too close to a stove while cooking and start a kitchen fire may not qualify for insurance reimbursement. Renters who intentionally set fire to something will absolutely not qualify for payouts and their insurance companies may elect to cancel their policies.

Negligence and intentional damage clauses may also apply in situations where renters:

  • Fail to reasonably and appropriately maintain an item.
  • Fail to promptly respond to evidence that an item is endangered or in poor condition.
  • Use an item in unapproved or unsafe ways.

Maintenance

Renters insurance categorically will not pay for any loss or damages associated with incidents considered to be part of or related to common home or property maintenance. Property maintenance expectations are dictated by the legal theory of “reasonable behavior.”

For example, imagine that Mary is a renter who holds both standard renters insurance and a flood insurance policy. If a tree branch smashes through one of Mary’s windows during a storm and some of her belongings suffer water damage, then regular renter’s insurance will cover those costs because storms are a covered incident. If Mary’s belongings sustain water damage as the result of a flood caused by a hurricane or other major storm, then her regular renters insurance will not cover the expenses but her flood insurance policy will.

If the water pipes at Mary’s apartment burst causing water damage to her belongings, then the loss may or may not be covered depending on the circumstances. If the pipes burst suddenly or Mary was away from home that week and had no forewarning that there was a problem, then her insurance would cover the costs of the lost property. If Mary had been home and heard or saw the pipes dripping or leaking but did nothing about it, then she might be denied reimbursement because a reasonable resident would have promptly addressed a potentially dangerous or problematic water leak in their home. Learn what are a landlord’s responsibilities here.

Bed bugs are universally considered a home maintenance issue by insurance companies and are therefore not covered under renters insurance policies. Infestations of other pests (e.g. roaches or mice) and the damage they cause are similarly excluded from coverage.

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