Is Renters Insurance Worth It?

Renters insurance is a policy that helps protect your personal property and your liability for injuries to others when you rent a home or apartment. It only includes coverage for the renter’s property and doesn’t protect against damage to the dwelling. 

Renters insurance won’t help pay for a new roof after a storm but will cover the cost of a new couch after a kitchen fire. It’s a solid choice for renters who want to protect their belongings from damage or theft.

Renters insurance is an extra monthly expense, but it’s typically worth it because the coverage is extensive and cheap. Here’s how to decide if a policy makes sense for you.

4 reasons why renters insurance is worth it

Renters insurance is usually worth it because the benefits of having a policy outweigh the cost. When you rent a property, the owner’s home insurance doesn’t cover your personal items. Renters insurance fills the gap since it only covers the renter’s items.^[1]

For example, imagine there’s flood damage in your bedroom apartment due to leaking from your upstairs neighbor. Your insurance policy will pay to replace your furniture and clothes. But it won’t cover the cost of repairs, since that’s the landlord’s responsibility.

Here’s why renters insurance is usually a good idea if you rent an apartment or home.

Renters insurance is affordable

The average cost of renters insurance is $19 per month for a policy with $30,000 in personal property coverage and $100,000 in personal liability coverage, according to Insurify data — making it affordable for most renters.

You can pay more for higher coverage limits if you have high-value items that need more protection. But renters insurance isn’t a huge expense and will probably pay for itself if you ever need to file a claim.

Renters insurance might not cost more if you bundle policies

Most insurance companies provide multi-policy discounts that lower the cost of coverage when you add additional policies. When you add renters insurance to an existing insurance policy, like car insurance, the multi-policy discount might offset some of the cost of coverage.

Renters insurance can cost less than replacing your belongings

​​Most people have thousands of dollars worth of personal belongings in their homes, making it hard to afford replacements. With an average cost of $228 per year, renters insurance is usually cheaper than replacing your belongings. Even if you only file one $5,000 claim in five years, you’d save nearly $4,000 by having coverage.

Renters insurance protects valuable items

Most people have valuable items in their homes, like laptops, road bikes, or jewelry. Renters insurance covers valuable property up to the coverage limit, usually between $1,000 and $1,500. Coverage can help you afford to replace expensive items after damage or theft.

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Is renters insurance required?

Renters insurance isn’t a legal requirement. The government doesn’t mandate coverage, and you can choose whether to buy a policy as a renter. But even though it’s not a legal requirement, some landlords require tenants to have an active policy.

Landlords often want renters to have coverage because it helps protect against lawsuits and liability claims. Renters insurance policies can also help pay for temporary dwellings, pet injuries, and property damage, which protects the policyholder, the landlord, and other tenants.

What renters insurance covers

Renters insurance includes three types of coverage — liability, personal property, and additional living expenses. Each type of coverage protects against unexpected costs and losses. Here’s how it works.^[2]

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  Personal liability

  The policy helps protect you from potential lawsuits for property damage and bodily injury, including injuries your pet causes. For example, imagine a friend trips on a cord in your apartment and breaks their leg. Your policy protects you from a lawsuit related to the injury. It also helps cover no-fault medical expenses.

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  Personal property

  Renters insurance protects your property, including furniture, electronics, clothing, and more. It covers damage from fire, smoke, lightning, theft, water, and other natural disasters.

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  Additional living expenses

  Your policy covers the cost of hotels, temporary rentals, meals, and other expenses if you need to live elsewhere while your rental is being repaired from damage caused by a covered event.

What renters insurance doesn’t cover

Renters insurance offers extensive coverage, but it has limits. Here’s what a renters insurance policy won’t cover:

• Damage to the home: Your policy doesn’t cover damage to the home. For example, if the dishwasher leaks and floods your kitchen, the policy doesn’t cover the cost of replacing the cabinets.

• Items over a specific limit: Most policies cover valuable items up to $1,000 or $1,500. But if you own an item worth more than that, the policy won’t cover the full amount. You might need to add an additional policy to cover it.

• Floods and earthquakes: Renters insurance doesn’t cover floods and earthquakes. For example, if you need to replace furniture and kitchenware due to damage from an earthquake, your policy won’t cover it.

Renters insurance cost

The average cost of renters insurance is $19 per month, or $228 per year, for a policy with $30,000 in personal property and $100,000 in liability insurance. The cost increases if you want higher coverage limits. But even for the highest limits, you’ll only pay about $40 per month.

Compared to the average cost of homeowner insurance, renters insurance is surprisingly affordable. Homeowners pay an average of $2,377 per year for a policy with $300,000 in dwelling coverage and a $1,000 deductible, according to Insurify data.

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Where to get renters insurance

You can get renters insurance from most insurance companies. If you already have a different insurance policy, like auto insurance, start by checking if your current insurer offers coverage for renters. Most companies offer a discount for multiple policies, and you might save money by signing up for a policy with the same insurer.

You can typically request a quote online, which only takes a few minutes. Compare quotes from multiple insurers to get the best deal. Once you’re ready to move forward, complete the process and finalize coverage.

How to file a renters insurance claim

Filing a renters insurance claim is straightforward. Before you file a claim, inform your landlord in writing. If the claim is due to theft, vandalism, or other illegal activity, you’ll want to file a police report as well. After that, you can start the claims process with your insurance company.

Here’s how it works:

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  1. Contact your insurance company

  Explain the incident and provide additional information. Most insurance companies have a 24-hour phone line for claims or the option to file online.

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  2. Gather documentation

  Document the damage to your personal property. Take photos and gather receipts for damaged items. Most companies have a claims checklist, which can help streamline the documentation process.

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  3. Finalize the claim

  Once you’re done documenting the incident, finalize your claim. You typically need to file a claim within a specific time frame, so try to submit it as soon as possible.

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