Does Renters Insurance Cover Temporary Housing?

If you’re a renter, you’ve probably heard that you should get renters insurance. Renters insurance is relatively inexpensive and covers a variety of contingencies, from damage to personal property to personal liability. Find out whether your renters insurance covers temporary housing, and why you might need temporary housing to begin with.

What is renters insurance?

First, you’ll need to understand exactly what renters insurance is. Renters insurance is a policy that a renter can purchase to cover potential unexpected costs related to renting an apartment, home, or any other living space.

Renters insurance is different from homeowners insurance, which is usually purchased by property owners. While renters insurance and homeowners insurance cover some of the same things, renters insurance does not cover damage to the structure of the property. Renters insurance also tends to be much cheaper than homeowners insurance.

What does renters insurance cover?

Generally speaking, renters insurance offers four categories of financial protection:

• Personal property damage: Renters insurance will cover the cost of damage to your personal property up to the limits of your policy when it is damaged by covered circumstances, such as theft, wind, or fire. It doesn’t cover things like natural disasters and accidental injury.
• Personal liability: Renters insurance also covers liability costs, including costs related to legal defense, if you are blamed for someone else’s injury or property damage. Many policies offer up to $100,000 of this kind of coverage, but many skip this. Make sure you know what your policy covers.
• Medical Payments: Some kinds of renters insurance will provide limited coverage of medical costs when a guest is injured on the property.
• Additional Living Expenses/Loss of Use Coverage: Finally, renters insurance will cover the costs related to temporary housing if your unit becomes uninhabitable due to covered circumstances.

Does renters insurance cover temporary housing?

As we’ve seen from the fourth category of coverage, many kinds of renters insurance do cover temporary relocation housing. Policies use terms like “additional living expenses” or “loss of use” to refer to this kind of coverage.

However, temporary housing is only covered when your rental unit becomes uninhabitable. For example, if there is major damage by fire or flooding that needs to be repaired you may be covered. This coverage pays for the expenses related to alternative housing while you’re unable to live in your apartment. Generally, you should receive this coverage until you’re able to move back in.

Policies usually offer coverage only of “necessary expenses” and “covered losses.” That means that besides paying for the alternative housing itself, such as the cost of renting a hotel room or a short-term apartment, your insurance will cover additional expenses related to your living situation, as long as they are necessary. For example, your renters insurance may reimburse you for the cost of meals from a restaurant if your hotel room doesn’t have a kitchen, the cost of a laundry service if there’s no accessible washing machine, or for the additional costs of transportation if your temporary location is further from work.

Most renter insurance policies say that you’re entitled to temporary housing that’s similar to your original living situation but does not exceed that. So, if you usually live in a studio apartment, for example, don’t expect to be reimbursed fully for the costs of renting a two-bedroom apartment.

Also note that most policies won’t cover similar expenses that are not necessary. For example, if your temporary location has a washing machine and dryer, your insurance won’t cover trips to a laundromat or a laundry service.

Most renters insurance policies don’t cover the cost of moving to temporary housing, but they may cover damage to your property while it is being moved.

What else does renters insurance cover?

Renters insurance also tends to offer a lot of benefits that you might not think of right away. This includes coverage like:

• Items stored elsewhere: Many policies will cover damage to your property not just in your rental unit itself, but also property that’s stored off-site. If there’s a flood at your storage unit, for example, check your renters insurance policy to see what might be covered.
• Credit card or bank forgery: In addition to safeguarding your property against theft, your renters insurance could cover the losses incurred when your checkbook or credit cards are stolen from your apartment.
• Other people’s property: If you borrowed something relatively valuable from someone else, such as a laptop, home gym equipment, or records that are damaged in your apartment, your policy may pay the replacement costs for property owned by someone else.

How can I get reimbursed for temporary living expenses?

If your apartment becomes uninhabitable because of a covered loss, such as a tornado or fire, and you relocate until it is repaired, you can file a claim with your renters insurance company to get reimbursed for temporary living expenses. File all of your receipts so that you’re able to demonstrate how much you should be reimbursed. Many policies will reimburse you over time, so you’ll probably need to continually file receipts to receive reimbursement for each expense.

Don’t forget that most renters insurance policies have limits on how much coverage they offer, so check your policy before you spend a lot on temporary housing to make sure that your costs will be covered.

If you’re shopping around for renters insurance, make sure you check the terms of each policy to see whether the cost of temporary housing is covered, what amount of coverage is offered, and under what circumstances. That way, if you end up in a situation where you need to find temporary housing, you won’t have to spend a lot of extra time and energy worrying about how to pay for it.