Why Renters Insurance Is Always Worth It

Renters insurance is a low-cost way to protect your belongings and your financial well-being.

Daria Kelly Uhlig
Daria Kelly Uhlig
  • Licensed Realtor with 10+ years in personal finance content

  • Contributor to Nasdaq and USA Today

Daria is a licensed Realtor and resort property manager specializing in personal finance, real estate, and insurance topics. In her spare time, she practices photography.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated December 19, 2023

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Renters insurance covers your losses when your personal property is damaged unexpectedly, such as in a fire or after a theft. It’s similar to homeowners insurance in that it covers belongings stored in your home as well as offsite, and it also provides liability coverage.[1]

But unlike homeowners insurance, renters insurance doesn’t cover the structure of the home or the property owner’s belongings.

Quick Facts
  • A renters insurance policy covers your belongings for theft, fire, and other losses.

  • Renters insurance can cost as little as $180 per year.

  • Insurers often give you a discount for bundling auto and renters insurance.

Is renters insurance worth it?

In most cases, renters insurance is well worth it. Premiums are low compared to other insurance coverages, and you get a lot of protection for your money. The annual cost of renters insurance averages $180 to $360, according to the National Association of Insurance Commissioners (NAIC).[1]

Here are some good reasons to purchase renters insurance:

  • Personal property coverage ensures that you’ll be able to replace your belongings if they’re damaged or destroyed.

  • You’ll avoid instant homelessness in the event your home is damaged so badly you have to leave it.

  • Medical coverage can prevent a lawsuit by paying an injured party’s medical expenses.

  • Liability coverage can protect you against a devastating financial loss in the event of a lawsuit.

  • The policy can almost pay for itself if you purchase it through your auto insurer and get a bundle discount.[2]

What is renters insurance?

Renters insurance is your safety net while you’re renting an apartment, house, or condo. It’s a type of property insurance also known as an HO-4 policy. It covers your belongings for risks like theft, fire, natural disasters, and other types of damage.

But it’s not just about your stuff. Renters insurance also includes liability insurance, which provides coverage if someone is injured at the place you’re renting or you accidentally cause damages or injuries to them.[3]

Keep in mind, while your policy protects your personal items inside the rental, the building itself isn’t your responsibility — that falls to your landlord. Still, renters insurance is a good idea because it ensures your belongings are safe, even though you don’t own the home.

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What does renters insurance cover?

Renters insurance typically provides similar protection to homeowners insurance — minus dwelling protection — and guards against specific events named in the policy. These could include various unexpected events, such as:

  • Fire and lightning

  • Wind and hail

  • Smoke

  • Vandalism and theft

  • Weight of snow or ice

  • Frozen plumbing

Policies typically provide four types of coverage:

  • illustration card https://a.storyblok.com/f/162273/100x100/32ed42213e/personal-property.svg

    Personal property damage

    Personal property damage is the type of coverage that reimburses your loss if a named peril, such as a windstorm, damages your roof and destroys your furniture.

  • illustration card https://a.storyblok.com/f/162273/x/001e1e2a4c/legal-protection.svg

    Personal liability

    Personal liability covers your legal expenses if you accidentally injure someone or damage their property and they sue you. In addition to paying your attorney and court fees, liability coverage will pay a judgment against you, up to the policy’s limit, which is usually at least $100,000.

  • illustration card https://a.storyblok.com/f/162273/x/4c9753bdbe/medical-payments.svg

    Medical coverage

    Medical coverage is a type of liability coverage that pays the medical bills if someone who doesn’t live in your household is accidentally injured in your home. The typical coverage limit is $1,000 to $5,000.

  • illustration card https://a.storyblok.com/f/162273/100x100/c61ab9bfc2/loss-of-use-2.svg

    Additional living expenses

    Additional living expenses coverage pays your living expenses if your home is damaged so severely that you have to move out while it’s being repaired or rebuilt.

For Example

If your pet damages a friend’s belongings or injures them, your renters insurance can pay to replace their items and cover their medical expenses, up to your policy limit. Your liability coverage would also step in to cover legal costs and settlement awards within the policy’s limits if your friend sues you for damages and pain and suffering.

What does renters insurance exclude?

As a named-perils policy, renters insurance only covers disasters named in the policy. And it has limits on what property it covers.

Here are some examples of exclusions:

  • Floods: Renters insurance, like homeowners insurance, excludes flood damage. But you can purchase flood coverage through the National Flood Insurance Program. Some private insurers also carry it.

  • Earthquakes: Your renters insurance won’t cover earthquake damage, but you can purchase earthquake coverage as a separate policy or as an endorsement to your existing policy.

  • The structure of the home: Renters insurance doesn’t cover the dwelling, which is the property owner’s responsibility. If, for example, a hailstorm damages the roof and causes a leak, your landlord’s insurance would be responsible for the repair, not you.

What Does a Renters Insurance Policy Cover?

What Does a Renters Insurance Policy Cover?

How much does renters insurance cost?

Renters insurance might be the least-expensive coverage you’ll ever encounter — $15 to $30 per month, according to the NAIC.[1] Compare that to the $149 average monthly cost of homeowners insurance and $160 for car insurance.4 5

However, renters insurance claims are subject to a deductible.[2] The deductible is the amount you’re responsible for paying before the insurance company will pay on your claim. A typical policy has a $500 deductible.

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How much renters insurance do you need?

How much renters insurance you need depends on several factors, one of which is the value of your belongings. Consider taking an inventory of your personal property and estimating the value of each item in its current, used condition and how much it would cost to replace.

This distinction is important because your reimbursement depends on whether you have actual cash value or replacement cost coverage.[2] Actual cash value reimburses the depreciated value, which is often less than the amount needed to replace damaged items. Replacement value reimburses the cost of replacing damaged items with new ones.

However, coverage for expensive items, such as jewelry and electronics, is limited in a standard renters insurance policy. You might need an additional “floater” policy to ensure that you could replace them if they were damaged or destroyed.

It also makes sense to think about your liability and whether the typical $100,000 in coverage is enough. It might not be if it’s lower than the value of your assets.

How to buy renters insurance

The easiest way to shop for renters insurance is to go online to request quotes, even if you plan to talk with an agent or schedule an in-person appointment before you buy. This way, you can compare multiple policies to make sure you get the coverage you need at the best rate possible.

Once you’re on an insurer’s website, you’ll need to provide any or all of the following information to get a quote:

  • Personal details, such as name, age, gender, marital status, and contact information

  • Employment information

  • The address of the rental property, how long you’ve been there, and how many people live there

  • Property details, such as protective devices, proximity to a firehouse, and whether the home is your primary residence

  • Whether you’ve filed a property insurance claim in the past

  • Whether you’re currently insured

The next step is to select coverages, limits, and a deductible from the form you see on your screen. You’ll receive a quote after you’ve submitted the form.

Many insurers allow you to purchase your coverage and pay your first month’s premium immediately, while the quote is on the screen.

Renters insurance FAQs

Here’s more information about renters insurance and what it covers.

  • What discounts are available for renters insurance?

    Insurers often offer discounts on premiums for customers who have another policy with the company.[2] You can also get discounts for having safety equipment, such as smoke detectors, security devices, and deadbolts on exterior doors. Older customers and people with good credit might also receive better rates.

  • Is renters insurance required?

    The law doesn’t require renters insurance. But some rental property owners and property managers require their tenants to purchase it.

  • Should college students buy renters insurance?

    That depends on where they live, according to the Insurance Information Institute.[2] You should have coverage under your parents’ homeowners or renters insurance if you stay in a dorm but still live in your parents’ household. If you have a year-round off-campus apartment, you’ll need your own renters insurance.

  • Does renters insurance cover flood damage?

    Renters insurance doesn’t cover flood damage. But you can purchase flood insurance through FEMA. Some private insurers offer it as well.

  • What does landlord insurance cover?

    Landlord insurance protects rental property owners against losses from covered emergencies. It covers the structure, the property owner’s personal property, and property used to service the rental. Landlord coverage also provides liability and loss-of-income coverage. But it doesn’t cover tenants’ personal belongings.


  1. National Association of Insurance Commissioners. "Renting Your Home? Protect Your Belongings with Renters Insurance."
  2. III. "Your renters insurance guide."
  3. Allstate. "What Is Renters Liability Insurance?."
Daria Kelly Uhlig
Daria Kelly Uhlig

Daria Uhlig is a freelance writer and editor with over a decade of experience creating personal finance content. Her work appears on USA Today, Nasdaq, MSN, Yahoo Finance, Fox Business, GOBankingRates and AOL. As a licensed Realtor and resort property manager, she specializes in real estate topics, including landlord, homeowners and renters insurance. In her spare time, Daria can be found photographing people and places on Maryland's Eastern Shore. Connect with her on LinkedIn.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

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