Renters insurance covers the cost of replacing your stuff if it’s destroyed, damaged or stolen, whether it’s inside or outside your home. When it comes to your car, it may seem like, since it’s your stuff, renters insurance would cover it. But vehicles and renters insurance have a special relationship, and your renters insurance coverage covers some things to do with vehicles and not others.
If you rent your home, you need renters insurance, and if you own a car, you need auto insurance. So if you’re a renter who also owns a car, you need both — and the robustness of your renters insurance coverage may surprise you.
Renters insurance provides protection in case your stuff is destroyed or stolen, and it also provides you with important liability protection.
But one little-known perk of renters insurance is that its coverage follows your stuff wherever it is, whether it’s in your home or not. So if your bag with your laptop is stolen while you’re in class, it’s covered, and if it’s stolen out of your car, it’s covered, too.
That may seem counterintuitive — shouldn’t your car insurance cover your stuff when it’s in your car? Think of it this way: Just like the physical structure of your building is protected by your landlord’s insurance, the physical structure of your car is protected by your car insurance. And in both cases, your personal belongings are protected by your renters insurance.
If you don’t have a renters insurance policy and your personal property is stolen out of your car or you’re out of luck: your auto insurance policy won’t cover it. Personal property inside your vehicle is generally covered by your renters insurance policy. (Homeowners don’t need renters insurance, obviously; homeowners insurance offers the same coverage for your stuff, no matter where it is.)
Your physical car itself is not protected by renters insurance, even it’s damaged on your property. For example, if you rent your home and your car is in your garage and your garage burns down, your renters insurance would cover the garden tools in your garage and your laptop that was in the backseat of your car, but it wouldn’t pay for your charred-out Camry. Your car insurance would step in there.
The same applies if your car is stolen. You’d make a claim through your car insurance to reimburse you for the value of your car, but you’d make a claim through your renters insurance to replace the personal belongings that disappeared with it.
Your renters insurance policy comes with special limits, also known as category limits or maximum limits. These limits vary by policy, but generally apply to categories like electronics, jewelry, art, cash, and property used for business purposes limiting the amounts that you can be reimbursed for each category.
Personal property coverage outside the home is subject to a special limit of its own, which varies by policy, and could mean you are eligible for just hundreds of dollars reimbursement if you lose thousands of dollars worth of stuff. The solution is to talk to your insurance company and, if necessary, purchase additional coverage that increases the coverage limits on certain categories in your policy or even specifically covers a certain item.
Read more about renters insurance riders.
If your car windows are smashed and your backpack with your laptop, wallet, and phone is stolen, you’ve got two claims to make. Your car insurance (may) cover the broken window (if it’s above your deductible), but the claim for the laptop, wallet, and phone will go through your renters insurance company.
If you are in a car accident that destroys the personal property inside your car (like the brand new vase you just bought), how you replace your property depends on whose fault the accident was.
If the accident wasn’t your fault, you may be able to make a claim through the other person’s insurance company for your vase (in addition to your any damage to your car and your medical bills). If the other person doesn’t have insurance or if the accident was your fault, you can still make a claim through your renters insurance policy for the vase.
Renters insurance will reimburse you for the loss of property if destroyed, damaged, lost or stolen in any one of 16 different events, or perils, including fire, explosions, riots, volcanic eruptions, vandalism and more.
Notably missing from this list are earthquakes and floods, neither of which are covered by renters insurance. There are additional excluded perils, too, including nuclear war and terrorism. If your car is destroyed in an earthquake or flood or nuclear war or terrorism, the contents inside your car would not be covered by your renters insurance policy. Just something to think about!
Aftermarket additions to your car are not considered personal property — they’re considered part of the car. So if you add a fancy stereo or navigation system to your car, those additions, if stolen or destroyed, would not be covered by your renters insurance. You’d have to make a claim with your auto insurance company (though many aftermarket additions may need to be added as an endorsement to your auto insurance policy ensure that they’re covered).
Liability coverage is part of your renters insurance policy, and it offers protection if you accidentally hurt someone or they accidentally get hurt at your home. This coverage also comes with limitations, and one of them is that it does not apply when you are operating a motor vehicle. If you hurt someone while you’re driving, that would fall to your car insurance liability coverage.
If your stuff is stolen out of rental car or destroyed in an accident in a rental vehicle, your renters insurance would be the first company you should make a claim to, since your policy covers your stuff no matter where it is.
If you don’t have a renters or homeowners policy and still want your stuff to be protected while traveling, it may be possible to buy additional rental car insurance or a buy a travel insurance policy.
Also, as mentioned above, your renters insurance coverage does not provide any liability insurance while you are driving a rental car.
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.
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