Renters insurance covers fire and smoke damage but some items require extra coverage

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

• Renters insurance covers damages to your belongings from fire and smoke under insurance perils.
• Damage to fine art, high-end electronics, and jewelry may require additional coverage.
• If your rental unit is unlivable due to fire or smoke damage, loss of use helps you relocate.
• See Insider's picks for the best renters insurance companies.

Table of Contents: Masthead Sticky

Renters insurance is a type of homeowners insurance that replaces your belongings if they're damaged or stolen. Your landlord has insurance that covers the building and structure, but your belongings inside the rental unit are your responsibility.

The biggest component of renters insurance is replacement of damaged items. Damage to your personal belongings by fire or smoke is covered under renters insurance.

Does renters insurance cover fire and smoke damage?

Renters insurance protects your personal property if it's damaged by a covered event, known as an insurance peril. Common insurance perils include fire, smoke, theft, storms, hail, and lightning.

Damage to your personal property by fire and smoke are covered insurance perils. Damage to the building, walls, and structure of your rental are the responsibility of your landlord.

Coverage	Included with renters insurance?
Dwelling/Structure	No – landlord responsible
Personal liability	Yes
Personal belongings	Yes
Loss of Use (additional living expenses)	Yes
High-end electronics/special jewelry	Limited, requires add-on*
Roommates	No
Cyber liability	Yes*
Water damage	Yes
Flood	No**
Wind or hail	Yes
Earthquake	No*
Pets	Yes*

*Available as add-on coverage if not part of policy

**Flood insurance is available through the NFIP and approved insurers

If you rent in disaster-prone areas – where flood zones, hurricanes, tornadoes, wildfires, mudslides, hail, or earthquakes are common – you will have increased premiums, because these natural disasters aren't included in basic coverage and require add-on policies, known as riders.

Damage to art and jewelry may not be included

Most renters insurance coverage for electronics is capped at around $2,500. Jewelry limits are usually lower, at $1,500. If your electronics or jewelry exceed these limits, you should increase your limits or get an add-on rider.

Specialty items like high-end electronics, special jewelry, furs, fine arts, firearms, specialty bikes, and cash may not be covered by renters insurance in the event of theft. According to Steve Wilson, senior underwriting manager at Hippo Insurance, these items may need a "personal article" endorsement or add-on rider.

It's a good idea to take inventory of your furniture and personal possessions. Some renters insurance companies will have inventory lists for you to complete. If you have riders for fine art and specialty jewelry, you will be required to catalog and provide appraisals for them.

Will renters insurance cover relocation?

"Loss of use" coverage, also known as "additional living expenses" or ALE, is included in most renters insurance policies and provides reimbursement for temporary housing when a peril causes damage making your rental unit inhabitable.

For "loss of use" and "additional living expenses," much depends on your insurance carrier and it varies by provider. Some carriers will reimburse you for temporary housing. Others may have a list of housing alternatives.

If you're considering leaving your rental due to damage, contact your renters insurance provider first and take detailed pictures of the damage. Make sure to lock up and secure the premises as well.

Actual cash value vs. replacement cost

Renters insurance policies cover up to a certain amount, usually around $20,000 or $30,000 worth of coverage. Determining the value of your belongings will help you decide how much coverage to get.

Renters insurance policies typically use "replacement cost" when paying out for covered damage. Replacement cost is the cost to replace the item with a new or used product.

Actual cash value (ACV) takes into consideration depreciation of the item. For example, if a five-year-old leather sofa is damaged by fire, the actual cash value considers the age of the sofa. Actual cash value is usually lower than the replacement cost value. Talk to your renters insurance company to find out if they use replacement cost or actual cash value.

How to file a claim if your belongings are damaged by fire or smoke

Follow these steps to file a claim.

1. Take pictures of damaged possessions and what caused the damage (fire, storm, etc).
2. Contact your renters insurance company. Failure to timely notify your insurance provider can result in denying the claim.
3. If you think your rental unit is unlivable, contact your renters insurance company before leaving. Don't assume you will automatically qualify for loss of use.
4. Damage to the building and structure are the responsibility of the landlord.

Related Content Module: More on Homeowners Insurance