After buying renters insurance, you’ll pay a premium to keep the policy active and may submit claims for any covered losses. You may need to pay a deductible, too.
Co-authored the book “Future Millionaires’ Guidebook”
13 years writing personal finance content
A former chief copy editor at Bankrate and past managing editor at Macmillan, Kim specializes in writing easy-to-understand, actionable personal finance content.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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If you’re living in a home you don’t own, whether an apartment or a single-family home, the best renters insurance can provide valuable protection against risks your landlord’s insurance doesn’t cover.[1] If fire damages your rental unit, for example, your renters insurance would pay to replace your damaged items. It would also cover temporary living expenses while your rental undergoes repair.
A standard renters insurance policy is relatively affordable, too. The average cost of renters insurance is $20 per month. But before you buy a policy, it’s a good idea to understand how renters insurance works.
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How renters insurance works
When you’re renting a home, your landlord may financially protect the building itself through a special type of coverage, such as landlord insurance. This type of policy doesn’t provide financial protection for you or coverage for your personal property. But you can buy your own coverage through a renters insurance policy.
Renters insurance can cover damage or loss of your personal property, provide you with liability protection, and pay for temporary living expenses when you’re displaced after a covered loss. You can buy renters insurance from most insurance companies that offer homeowners policies in your state.
When purchasing renters insurance, you’ll select a coverage amount based on the value of your belongings and potential liability risks. Then, you’ll choose a deductible, which is the amount of money deducted from your payout when your insurance company reimburses you for a covered loss.
You’ll also need to decide between an actual cash value policy and a replacement cost policy. A replacement cost policy will be more expensive, but it’ll pay to replace damaged items at current prices instead of their depreciated value.[2]
Good to Know
You’ll pay a monthly or annual premium to keep the policy active. The price of your premium depends on factors like your ZIP code, the type of home you live in, your coverage limits, and the deductible you choose.
What renters insurance covers
A standard renters insurance policy covers the following:
If your rental unit becomes uninhabitable, additional living expensescoverage helps pay for temporary accommodations, restaurant bills, and other expenses.
Liability
Renters liability insurance can help pay for legal fees and damages if someone is injured in your home or you accidentally cause property damage.
Medical payments
If a guest is injured in your home, medical payments coverage may pay a portion of their medical bills, regardless of fault.
What renters insurance excludes
Renters insurance doesn’t cover every disaster that may strike. Here are some examples of what a standard renters insurance policy excludes:
Flood damage: Standard renters policies exclude flood damage, but you can purchase flood coverage through the National Flood Insurance Program. You may also buy it through some private insurers.
Earthquake damage: A renters insurance policy also won’t cover damage from earthquakes. If you live in a high-risk area, you may purchase an endorsement or separate earthquake coverage.
Infestations: In most cases, renters insurance doesn’t cover damage from pests like termites and rodents.
Uninsured roommate’s items: Some insurance companies allow roommates to buy a renters insurance policy together. But if your roommate isn’t named on your policy, they can’t file a claim through your coverage.[3]
Pet damage: Renters insurance doesn’t cover damage your pet causes to your rental unit. Any security deposit you paid the landlord may go toward repairs or cleanup.
Water backup: Renters insurance typically won’t cover damage from sewer line backups. Some insurance companies offer endorsements for water damage and sump pump overflow.
Do you need renters insurance?
Federal and state government laws don’t require tenants to buy renters insurance, so you can typically choose whether to buy coverage. Even when it’s optional, renters insurance is worthwhile in many cases, such as:
Your landlord requires it. Some landlords require tenants to have renters insurance as part of the leasing agreement. A renters insurance policy protects tenants’ personal property and can help prevent disputes if there’s a loss.
You don’t have an emergency fund. After a theft, vandalism, or another covered loss, you may need to replace your belongings or stay in a hotel. Renters insurance helps cover these costs, which protects your finances.
How much does renters insurance cost?
The national average cost of renters insurance is $20 per month for a policy with $30,000 in personal property coverage and $100,000 in liability coverage, Insurify data shows.
But the cost is different for everyone. Factors like your ZIP code, the type of property you live in, the coverage limits you choose, optional coverages, and your deductible can all affect the cost of your policy.
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How to file a renters insurance claim
If you need to file a renters insurance claim, it’s important to move quickly. Here are the steps you can follow:
1. Document the claim
Create a list of lost, stolen, vandalized, or destroyed belongings. Take photos and videos that support your claim. Receipts, if you have them, can also help prove the value of your items. Any documentation you can provide helps your insurer evaluate and process your claim.
2. File a police report
Contact your local police department and file a report if the claim involves theft or vandalism. Your insurance company may request the police report when it investigates the claim.
3. Contact your insurance company
Notify your insurance company of the incident. Confirm that you have coverage, check your deductible, and ask about time limits on claim filing. A representative can guide you through the process, which usually involves submitting a form and required documentation online, through a mobile app, or by phone.
4. Contact your landlord
It’s also a good idea to let your landlord know about the incident, even if they’re not involved. Depending on what happened, the landlord may need to file their own insurance claim, schedule repairs, or add security features.
5. Wait for your settlement
Once you’ve submitted the claim, an adjuster will determine how much money the insurance company pays out. Most insurers will issue the settlement in the form of a check or direct deposit.
Renters insurance FAQs
If you still have questions about renters insurance and how it works, this additional information may help you as you research your options.
What does renters insurance actually cover?
Renters insurance can cover personal belongings, like furniture, clothing, electronics, and any other valuables listed in your policy. It also pays for your living expenses if a covered peril leaves your rental unit unlivable. If someone is injured in your rental or you accidentally cause property damage, a renters policy pays for personal liability claims and medical costs up to the policy limits.
Can you share renters insurance with a roommate?
Yes. Some insurance companies will cover multiple roommates under one policy, but each roommate’s name must be listed on the policy. Shop around to see if this is an option for you.
Why would an insurer deny your renters insurance claim?
An insurer may deny a renters insurance claim for several reasons. For example, it may exclude coverage for the specific peril, or it could believe the policyholder committed fraud or lied on the claim submission. An insurer may also deny a claim because the payout wouldn’t exceed the policyholder’s deductible.
Does your renters insurance premium go up after a claim?
Yes, your renters insurance premiums may increase after you file a claim. Insurance companies often consider claims history when determining risk. And if you’ve filed a claim in the past, this may indicate you’ll do so again in the future. As a result, your premium may increase when you renew the policy.
How does renters insurance pay out?
After you file a renters insurance claim, the insurer will assign an adjuster to review your documents and investigate the claim. If the company approves the claim, it may send you a check or deposit money in your bank account to cover your expenses up to your policy limits. The insurer will subtract the deductible from the policy payout.
Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.
Kim has been a contributor at Insurify since October 2022.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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