What You Need to Know About Renters Insurance and Subletting

HarborCatalyst Updated: 2025-07-01

Renters insurance is available to anyone renting a home, condo, apartment or room. It’s also available to those who sublet their property, whether it be on a short-term or long-term basis.
Personal liability coverage in a renters policy (Opens in new tab) can help cover damage caused by the tenant or their guests, and theft of items from the residence.

Liability Coverage

Generally speaking, renters insurance policies offer financial protection in the event that personal property gets stolen or damaged from designated “perils” like fire, vandalism and certain types of water damage. These plans also typically provide liability protection that can help pay for medical bills or legal fees in the event someone is injured at the policyholder’s home.
But subletting changes this picture. If the original tenant, who is known as the “leaseholder,” decides to rent out their apartment, they must adjust their policy to reflect that.
If the leaseholder does not change their policy, their belongings will be covered by their landlord’s landlord insurance, which is designed from a landlord perspective. But this is not a suitable option for those who want to sublet for a period of time. This is because the original tenant’s rental insurance does not cover any damages or losses that the sublessee may cause. In such cases, it is crucial for the sublessee to get their own renters insurance.

Property Coverage

The property component of renters insurance reimburses the insured for their belongings if they're stolen or destroyed. It typically has two options: actual cash value or replacement cost. The former pays a lower amount, such as what your clothes would have been worth at a garage sale, and the latter will replace them with new items.
If you're the owner of your home or apartment and want to sublet it for a short period, you can add a clause that requires the tenant to get their own renters insurance policy. This will give the subletter peace of mind and help you avoid having to pay for any losses.
However, if you're renting the apartment or home long term, your insurer will likely view it differently than a one-time sublet. It may require you to add the subletter's name to your policy or cancel the original tenant's policy and issue a new one in the sublet's name.

Additional Living Expenses Coverage

Many landlords require tenants to get renters insurance, but a policy also makes sense for those who live in a condo, townhouse, apartment or room and want to protect their belongings. This type of coverage provides financial protection in case an unexpected event happens such as theft, a fire or severe damage to the property.
In addition to property coverage, renters insurance usually offers additional living expense coverage. Sometimes referred to as ALE coverage, it pays for hotel bills, temporary rentals and meals if a loss from a covered peril renders your home uninhabitable. Depending on the policy, there may be a dollar limit or time limitation for this type of coverage.
When you sublet your apartment, you are essentially taking on the responsibility for anything that happens to your belongings. For example, if something is stolen or there's an unexpected fire that renders your rental uninhabitable, you're responsible for paying to stay somewhere else until the damage is fixed and you can return.

Replacement Cost Coverage

While it can be scary to think of someone else living in your apartment and using your things, renters insurance covers a variety of items and can make you feel more comfortable. Most policies cover theft, damage caused by a covered peril (such as fire) and the cost of replacing your belongings.
If a loss or disaster damages your rental home, renters insurance often covers hotel bills, temporary rentals and meals while repairs are being made. Most policies also include additional living expense coverage for up to three months, or a maximum dollar amount, NerdWallet reports.
Some insurance companies offer actual cash value (ACV) coverage as opposed to replacement cost value (RCV). Choosing the RCV option will typically increase your premium, but it could be worth the extra investment to have peace of mind. Depending on your policy, you may be able to save money by raising your deductible. This will reduce the amount you pay in a claim, but it will require you to pay more upfront before your insurer pays anything.