Renters insurance is financial protection in the event that your personal property is damaged, destroyed, or otherwise lost. Rather than you having to pay to replace it, the renters insurance company replaces it for you. Renters insurance covers hazards like bad weather, political unrest, and or destruction by vehicle and aircraft.
Renters insurance also covers loss from theft. In fact, theft is one of the most important reasons to get renters insurance, especially if you live in a high-crime area. If someone breaks into your home and steals your belongings, the renters insurance company will pay you the cost of those belongings based on the terms of your renters insurance policy.
Coverage for theft is spelled out in the section of your policy regarding personal property, under a provision titled something like “covered perils” or “perils insured against.” While much of your property is definitely covered, your policy will also highlight the types of property that is not covered or which are only covered up to a certain dollar amount.
If you have renters insurance, most of your property will be replaced if it’s stolen. For that reason, when you purchase a renters insurance policy, you should make a home inventory of all your belongings. You’ll want to purchase enough coverage so that all your belongings, big and small, are protected. When an item of yours is stolen, it’s often not much more difficult than filing a claim with the insurance company and receiving a check to pay for the loss.
Your renters insurance’s theft coverage also includes theft of intellectual property and some collectible items, up to a limit. Check your policy for details, but everything from comic books to coin collections may be worth some amount of reimbursement. Some policies even cover shrubbery, including trees and plants.
Your theft protection works in tandem with your policy’s protection from other hazards. Say a thief breaks into your apartment through the window while you’re away for an extended period of time. If, during that time, a snowstorm occurs and snow coming in through your broken window damages the belongings the burglar didn’t take, you can file a claim for both the stolen items and the items destroyed by the snow.
You might be able to use the theft provision of your renters insurance policy to file a claim for loss that otherwise wouldn’t be valid under your policy. For example, most renters insurance policies do not consider earthquakes and floods a covered peril – you won’t receive a reimbursement if your belongings are destroyed in an earthquake or flood unless you have an insurance policy specifically covering those hazards. But if a theft occurs as a result of the destruction, you can file a claim for the stolen items.
Many renters insurance policies also come with credit card fraud protection. If your credit card is stolen and the robber uses it to make a purchase, you can be reimbursed up to a dollar amount – defined in your policy, but usually around $500 – for those charges if you’re otherwise financially obligated to pay them.
Depending on your renters insurance policy, some items may not be covered. Those items are frequently antiques or very high-value items, like memorabilia or fine arts. However, other policies do cover these items, but limit the amount its obligated to pay for them. These amounts are called limits of liability, and they’re spelled out in the policy. However, by purchasing a rider (also known as an endorsement) to enhance your coverage, you can raise your limits of liability and add coverage for items not covered by the base policy. Ask your carrier for assistance.
When you file a claim, keep in mind that you’ll have to first meet a deductible, the amount you have to pay out of pocket toward the replacement before the carrier picks up the rest of the cost. Many insurance policies have a $500 deductible ($1,000 is also common), meaning that the first $500 of a loss is on you. But you only have to meet the deductible once. If both your $2,000 laptop and $1,000 TV are stolen, the renters insurance company will pay you $2,500, or $3,000 minus the deductible. That’s not bad for a renter insurance policy that only costs you $15 per month.
Additionally, you’ll only be reimbursed up to a maximum amount, which is named on the policy declarations sheet attached to your base renters insurance property. Say you purchase $20,000 worth of coverage, but you have a particularly enterprising burglar who manages to cart away $30,000 of your stuff. Only the $20,000 will be eligible for reimbursement.
The renters insurance company will require you to report any theft to the police, in addition to alerting the carrier itself. If the theft is your credit card, you’ll have to report it to the respective credit card company.
Depending on your policy, your renters insurance company may assess the value of the stolen belongings in one of two ways. The first is by using the item’s actual cash value, or what it costs to replace the item after accounting for depreciation of its value. The other is to use the item’s replacement cost value, or what it cost to replace the item as new. The latter type of policy is more expensive, but could be more cost-effective in the long run.
In what’s called off-premises coverage, items you own that are stolen away from your home are also covered. That includes items owned by your children when they’re off at college, or stuff like bikes that get parked outside.
Certain restrictions apply and will be thoroughly detailed in the off-premises coverage in your policy. These usually include expensive things like:
Trailers and semi trailers
Watercraft (and equipment or motors on the watercraft)
Theft and damage to a vehicle will be covered by your car insurance. However, the items inside the car may be covered.
If you already have car insurance – and if you drive, you probably do, because it’s required in almost every state – you can save money on a new renters insurance policy by bundling it with your car insurance.
In addition to your car and certain vintage, collectible, or antique items not being covered, there are many circumstances under which theft is not covered. For one, if the theft occurs while your home is under construction, you may not be able to get reimbursed.
Theft of your belongings that occurs in a room or property you rent out to someone else may not be covered, but many policies differ on this point. Some policies straight-up refuse to cover any property stolen in a space you rented out to someone else, even if you’re the original leaseholder, such as subleases.
Other policies are more lenient on this point. If the tenant didn’t commit the theft – that is, if someone broke into the subleased room and robbed your subletter of your stuff, and the burglar isn’t related to the subletter or not one of the subletter’s employees – you may still be able to claim reimbursement for the stolen items.
The types of items you’re allowed to claim under this specific situation may also differ from carrier to carrier. As always, check your policy for more details or discuss with your agent or representative.
Finally, if one of the people insured under your renters insurance policy steals from you, or if you yourself steal from one of the insureds, you won’t be allowed to file a claim.
Many insurance companies offer discounts for installing additional security on your home. You can get a discount on your premiums if you install a burglary alarm or a home monitoring system, and the more advanced the better. You might get an even stronger discount if the device automatically calls the police or fire department in response to a break-in.
Some insurance companies also offer discounts for actions as simple as installing a deadbolt lock. Check with your insurer about the discounts they have available.
One thing that won’t help you lower your rates is getting a mean dog. Having a rottweiler or a pit bull on hand might help to deter thieves, but insurance companies consider this a liability risk and may require you to pay a higher premium.
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.