Fortunately, the insurance experts for renters have the answer, and probably more in-depth information than you expected on a question like that.
Does Renters Insurance Cover Gambling Losses?
Nope. We actually had someone ask this just the other day. There are a couple of reasons. First of all, your renters insurance doesn’t cover cash. That’s simply due to the nature of cash and the fact that it’s not really traceable in any reasonable way, along with the fact that it can disappear quite easily.
Renters insurance liability is designed to cover bodily injury or property damage that you cause to others. If your spouse tried to sue you for losing your 401(k) at the craps table, they wouldn’t get very far. But you wouldn’t have a liability claim even if the suit had merit, because neither bodily injury nor property damage occurred as a result of you losing that money. While it’s a loss, it’s not a covered loss.
Additionally, renters insurance liability is not going to cover something where the outcome was, in fact, the “expected or intended” result. You went to the casino and a reasonable person would have expected or intended to give money to a casino with full knowledge that there was no guarantee they’d get any of it back, much less that they would make money. Fred Smith got away with gambling the last five grand of his company’s cash on hand because if he had lost, FedEx would have been out of business the next day anyway, for lack of funds to buy fuel. That doesn’t mean that a reasonable person doesn’t expect and intend to lose money in a casino, so you got the result that a reasonable person would have anticipated.
Does Renters Insurance Personal Property Cover Gambling Losses Of Property?
Personal property is a coverage which protects the things you own from covered losses. Those covered losses are defined by the list of renters insurance perils on the policy. That list does not include gambling losses of property. In addition, your policy specifically excludes coverage for losses resulting from the intentional conduct of an insured which was designed to cover a loss. Generally, that exclusion is written such that coverage is not available to any insured regardless of whether they were involved in, conspired to commit, or knew nothing about another insured committing that act.
Since you’d have to intentionally put up your personal property while at the tables, no, renters insurance does not cover gambling losses of property. If there were coverage for losses caused intentionally by an insured, even if that coverage were only available to other insureds on the policy, that would create a moral hazard by encouraging people to cause a loss in order to get the money from the claim.
Does Renters Insurance Liability Cover Gambling Losses Of Other Peoples’ Money?
Here again, we come back to “expected or intended” results of your actions. While renters insurance can, at your option, cover the property of other people which is in your home in certain circumstances – like the stolen laptop of a guest – gambling losses of other peoples’ money is not what that coverage is designed for.
If your gambling losses involve money belonging to other people, you may have a larger concern than the lack of coverage on your renters insurance for that loss.
For what it’s worth, renters insurance doesn’t cover gambling losses of your company’s money, either. If Fred Smith had lost that last five grand instead of turning it into new funding for FedEx, he wouldn’t have had coverage for his gambling losses, either.
To hear him tell it, Fred Smith is one of the luckiest guys alive. Don’t bank on having his luck.
If It Doesn’t Cover Gambling Losses, What Does It Cover?
The short answer is “Everything that’s written into the policy.”
Your personal property is protected from a list of perils, which generally includes the following, though you should consult your policy document for specifics.
- Fire or lightning
- Windstorm or hail (some policies may exclude in certain locations)
- Riot or civil commotion
- Vehicles (not your own)
- Vandalism or malicious mischief
- Volcanic eruption
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing apart, cracking, or burning
- Sudden & accidental damage from artificially generated electric current (policy document governs specifics)
Liability coverage on your Las Vegas Renters Insurance protects you from the cost if you cause bodily injury or property damage to someone else. It also covers defense costs for a claim that would be covered by the policy if you are proven to be liable for it.
Loss of use covers the additional costs of living after a covered loss (see above) forces you to live somewhere other than the residence premises because the same are not fit to live in. A hotel after a fire is a good example of a cost that could be taken care of by this coverage.
Medical payments to others is a no-fault good faith payment to someone who is injured on your property. It’s usually a small amount, and designed to resolve minor issues without them turning into large issues.
As you can see, there is broad coverage on your renters insurance policy. Even though it doesn’t cover gambling losses, there are a ton of other things that are covered. Those are largely things that happen to people in America every single day. Your renters insurance policy protects you from many of the most common “life happens” moments, and ensures that your family can continue and rebuild after a loss.
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Photo Credit: Michael Rehfeldt Las Vegas CC BY 2.0