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Does Renters Insurance Cover Car Damage?

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Renters insurance, also known as HO-4 policy, is insurance designed for tenants. This insurance policy can be used to protect your personal belongings while you rent an apartment unit or a house. Renters insurance will cover you for all personal property inside the home and abroad when you’re traveling, albeit at a lower coverage limit. If your items are damaged or stolen by common named perils, you will automatically be reimbursed for the market value of each item. Many landlords require renters insurance before they let you sign a lease. It’s possible to find great deals for renters insurance at less than $200/year as it’s one of the most affordable insurance policies.

Does renters insurance cover car damage? No, renters insurance doesn’t cover car damage. Renters insurance only covers personal property stolen inside the car up to 10% of the total personal property limit on your policy. This means that if you have a $10,000 limit, you’ll only be able to use $1,000 to replace property inside your vehicle. Car damage will be covered by car insurance policies. If the car was damaged in an accident you can use collision insurance, while if it was vandalized you can use comprehensive insurance.

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Car Damage and the HO-4 Policy

If you’re a renter and you own a car, you’ll need both rental insurance and vehicle insurance. Neither insurance type is superior, but they serve different purposes. To stay protected on the road and inside your rental home, you’re going to need dual coverage or you’ll have to pay for a lot of damage out of pocket. 

Car insurance policies will cover you if your car is damaged while driving or when it’s parked (assuming you have comprehensive insurance). Renters insurance is more limited than homeowners insurance because it has lower personal property limits, but you can increase those limits at a small premium increase. The only time these two policies intertwine is when there’s theft involved. Renters insurance won’t cover you for a stolen car but it will cover you if personal property is stolen from your car.

To get reimbursed for stolen personal property from your car, you must have it listed in your renters insurance inventory. When you sign up for renters insurance, the insurer will make you write a list of personal property that you want to insure including its value. If you have a laptop that you use in the apartment and the same laptop is stolen in your car, you can use your renters insurance to get a replacement for the laptop.

Car insurance doesn’t have personal property coverage which means you’re only reimbursed if the car itself is stolen. The only personal property coverage that applies to the vehicle is renters insurance (or homeowners insurance). Moreover, renters insurance covers your policy everywhere in the world. If you’re traveling and your possessions are stolen, you can file a claim on your renters insurance.

Note: If the car is stolen along with personal property, you still may be able to file a claim for personal property. Car theft is never covered by renters insurance or even homeowners insurance. Even if you’re renting a house and the car is stolen inside the garage, you’re not going to get reimbursed with renters insurance – you need comprehensive insurance. Most stolen cars are never recovered and the car will be declared a total loss. Renters insurance will only cover the items that were left inside the car.

The insurance company will require police reports for car theft or any kind of theft related to the car. Call 911 and get a copy of the police report that you can use as evidence with the insurer. If the windows were smashed before the thief stole your property, take photographic evidence to show the insurer.

Renters Insurance Claim Limits

There are certain claim limits known as maximum limits on each category of items, including special limits per item. All personal belongings that disappeared in your car can be replaced up to a certain limit, usually $1,000-1,500 per item. These limits apply to all personal belongings such as electronics (phones, laptops, Kindles), clothes, and other belongings we leave at the car

  • There’s a special limit on renters insurance for theft outside the rental unit. The limit is up to 10% of the total property coverage in your insurance policy. If you want to enjoy higher coverage on personal belongings outside the rental property, raise the coverage accordingly.

Most valuable items are automatically excluded. If you left your wedding rings or golden necklace inside the vehicle, you’re not going to be covered. These items have to be scheduled on an individual basis and can cause your premiums to go up if you report them to the insurance company.

Collision Accidents and Rental Insurance

Rental insurance can replace your personal property even in a car accident, as long as you aren’t at fault in the accident. If you can prove you didn’t cause the accident and that your personal property was affected in the accident, you can file a claim on your renters insurance. 

Note: This is usually not required because the person at fault is responsible for paying for the damage, but if you collide with an uninsured motorist you can use this as a last resort.

Rented Cars and Rental Insurance

Many people purchase rental cars on a temporary basis and larger vans/trucks for moving purposes. The rental car company is responsible for insuring the vehicle and this includes your personal property. If you ever get in a car accident with a rental car or someone steals your property from the car, you can contact the rental vehicle company and have them pay for a replacement. It’s also possible to purchase rental car insurance on your car insurance as an endorsement.

The private property coverage on your rental insurance policy would also extend to rented vehicles. If you want you can file a claim for stolen property inside a rented vehicle. The downside is that the coverage is still limited compared to coverage inside the apartment.

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