HUD Housing Counselor Certification Practice Exam 2025 – Complete Preparation

Renter's insurance is designed to protect tenants' personal property and provide liability coverage in specific situations. A pipe bursting in the apartment above is typically covered under a renter's insurance policy because it can lead to water damage to the tenant's belongings. If the water from the burst pipe damages the tenant's personal property, the renter's insurance can help cover the costs to repair or replace those items.

This situation highlights the core purpose of renter's insurance, which is to safeguard a tenant's possessions and provide assistance in circumstances beyond their control that result in damage. Renter's insurance also often includes liability protection, which could offer coverage in incidents similar to those described by other options, but they do not align as closely with the typical protections granted under such a policy.