Quote from @Greg M.:
500K is high and will exclude lots of companies from writing the renters policy. Many companies offer 300K max and above that they'd need an umbrella.
Liability insurance covers negligence. If your tenant falls down the stairs because they were clumsy, you're not liable. If a stair comes loose, you may be liable. Once your primary liability insurance is exhausted, your 3M umbrella would kick in.
Mold is being excluded by many companies. Some offer it as an additional rider for more money. For those with coverage, whether an occurance of it is covered would be based on how it occured and did/should you have knowledge about the potential for mold. Many companies are also limiting the claim for mold. You may have a 1M policy, but 25K for mold limit.
Cracked water pipe MAY be covered. Insurance companies are becoming stricter on things. If the pipe is 50 years old and had a life expectancy of 30 years, they're going to argue it was due to lack of care on your part and try to deny the claim.
Normal repairs are absolutely NOT covered by insurance. Those are out of your pocket. Loss of rental income is only covered if it is listed in your policy.
A few notes from a licensed insurance agent:
$500,000 liability coverage on renters insurance is not difficult or expensive to get. Do some companies max out at $300,000? Sure, but again securing $500,000 isn't difficult.
That said, liability coverage is lawsuit protection coverage just like it is for you. There's no guarantee that the liability coverage will pay out unless the tenant is negligent, at fault, etc.
Mold is typically not covered by insurance at all. If it is covered it's usually if caused by a covered loss meaning mold develops due to some other covered peril. If you just randomly find mold in a property, it's highly unlikely any insurance will cover that. Just because you see a mold limit on your policy does not mean you have coverage for mold. It likely means you have that amount of coverage when caused by another peril and as mentioned it's typically a significantly lower limit than other coverage amounts.
If a pipe bursts, it will likely be covered. If you have a slow leak...coverage is less likely especially with aged plumbing.
To the original poster, Salil. These specific questions should be posed to the agent that sold you the policy. Every policy is different. A knowledgeable agent is invaluable. If you don't have an agent...well...nothing is a problem until it's a problem but our advice and opinions are meaningless if you actually need to use your insurance.
It's vitally important that you understand exactly what you have before you need it. Get things in writing if you're not comfortable with what you see or hear.
