Does Renters Insurance Cover Theft? Choose the Right Policy

Renters insurance provides coverage for your personal belongings after theft or damage from a break-in occurs. It even covers items that are stolen from you when you’re away from home, such as your bicycle or laptop.

Whether your phone is stolen from your car, your laundry is taken from the machines, or someone breaks a window to steal your sound system, you’ll likely be covered up to the limits of your policy, minus your deductible. But renters insurance may not cover theft in some situations. Here’s what you need to know.

Does renters insurance cover theft?

Yes, renters insurance covers theft in most instances. Standard renters insurance includes three types of coverage:

• Personal possessions: The personal property portion of a renters policy protects your personal belongings against theft, as well as fire, vandalism, windstorms, and other covered perils. Take inventory of the items in your home or apartment to estimate how much renters coverage you need. Certain valuables, like jewelry or musical instruments, may require you to purchase extra protection.

• Liability: If you, your family members, or your pets unintentionally cause bodily injury or damage to another person’s property, the liability portion of your policy will cover any legal fees you incur. No-fault medical coverage is also included, which pays for the injured party’s medical bills.

• Additional living expenses: If your home is unlivable after a covered loss, the ALE portion of your policy will cover the difference between your regular rent and the cost to live elsewhere.^[1]

Read More: What Does a Renters Insurance Policy Cover?

Theft scenarios when your renters insurance will kick in

Below are some common theft scenarios covered by renters insurance. Bear in mind, you’ll still be responsible for the deductible as listed in your policy. You’ll also need to file a police report and file a claim with your renters insurance company within the allotted time frame in order to receive any reimbursement.

• Your bike is stolen from outside a coffee shop. Bicycle theft away from your apartment is covered as long as your bike was locked. Some insurers may have sub-limits for bicycles, while others will cover your bike up to the limit of your personal possessions coverage.^[2] Other insurers cap off-premises coverage at a percentage of your total limit, so it’s important to read and understand your policy.

• Your laptop is stolen from your car. If someone breaks your car window to steal your laptop, the device will be covered up to your policy limits for off-premises coverage. However, the damage to your vehicle wouldn’t be covered by your renters insurance — you’d need comprehensive auto insurance for that.

• Your phone is stolen from your hotel room. Your personal possessions are also covered while you’re traveling, up to your off-premises coverage limits.

• Your furniture is damaged during a break-in. Damage caused during a break-in is covered by your renters policy since theft is a covered peril.^[3] Any damage caused to the structure of your home would be covered under your landlord’s policy.

• You get mugged on the street. If you’re ever unfortunate enough to be robbed in public, any belongings stolen from you would be covered up to your policy’s limits. Renters insurance may even cover stolen cash, but usually only up to a few hundred dollars.

• Your laundry is stolen from the machines. Renters insurance covers your clothing within and outside your apartment or rental home, so if someone steals your laundry from the dryer, you’ll be covered up to your off-premises coverage limits.^[4]

• Your child’s headphones are stolen. Renters insurance covers your spouse and children automatically, so if their stuff is stolen, it will be covered. This holds true if your child is away at school. However, significant others or domestic partners need to be specifically listed on your policy for their belongings to be covered.^[5]

• A package is stolen from your porch. Renters insurance covers package theft. But keep in mind, if the value of the package doesn’t exceed your deductible, it won’t be worth filing a claim.

• Your storage unit is broken into. Renters insurance will cover items in a storage unit, but you’ll typically only get coverage for 10% to 20% of your policy’s limit for personal property.^[6]

• Your roommate steals from you. This is a gray area that depends on your policy. Most renters insurance companies won’t cover theft by a roommate, but some will as long as the roommate isn’t covered by your policy and you choose to press charges against them.

See Also: What Is Renters Insurance and How Does It Work?

Actual cash value vs. replacement cost coverage

Renters insurance providers generally use one of two methods for reimbursement: actual cash value or replacement cost. Actual cash value coverage pays for the depreciated value of your items. For example, your 5-year-old television is no longer worth what you paid for it — an actual cash value policy will only pay out what that TV is worth now after depreciation.

With replacement cost coverage, you’d be reimbursed at the actual cost to buy the same or a similar television. Depreciation isn’t factored in at all with this kind of coverage. Replacement cost policies tend to cost about 10% more than actual cash value policies, but they provide more robust coverage. If all your belongings were stolen and you could only recoup the depreciated value, you might have difficulty replacing all your stuff.

How is actual cash value calculated?

Insurers calculate actual cash value by deducting depreciation from the replacement cost of an item. Depreciation is determined by how much of an item’s lifespan has passed. For example, imagine you bought a $2,000 television with a 10-year lifespan five years ago. The same TV now sells for $1,500. But because your TV is halfway through its lifespan, your insurer will only pay you $750.^[7]

Check Out: Replacement Cost vs. Market Value

How to prevent theft in your rented property

While renters insurance covers theft, you’ll still need to pay a deductible, and some of your belongings may have sentimental value. The best way to protect yourself is to take steps to prevent theft in the first place, including:

• Ask your landlord to install doors with steel frames and deadbolts.

• Install bright lighting inside and outside your rental home to deter burglars.

• Install an alarm system, such as a doorbell camera or motion sensors.^[8]

• Be aware of your surroundings, and don’t leave your items unattended.

• Carry your backpack or purse at the front of your body.

• Invest in a secure bike lock.

• Install an anti-theft device in your vehicle.

Renters insurance and theft FAQs

Renters insurance coverage can be confusing, as coverage can vary based on the specific theft scenario. Below are some common questions renters ask about their insurance policies.