What Is Renters Insurance?

If you’re renting a home or apartment, your landlord may require you to have renters insurance. But having renters insurance is a good idea even if your landlord doesn’t require it.

Renters insurance covers tenants when it comes to the destruction or theft of their personal possessions, as well as certain liability issues. It can also cover additional living expenses if you can’t live in your home during repairs (like when a fire destroys your kitchen). A renters insurance policy is different from your landlord’s insurance policy, which protects the owner of the building and not your personal belongings.

Here’s what you should know about renters insurance, including how to buy it and what you may pay for this coverage.

How does renters insurance work?

Renters insurance protects your belongings in the event of a covered loss, such as from fire, natural disasters, or water damage, for a monthly premium. Many renters insurers allow you to submit your claim online or through a mobile app.

Once you pay your deductible following a claim, your insurer can help you pay to repair or replace covered belongings, including furniture, clothing, and electronics. A policy’s personal liability coverage safeguards you if someone gets an injury on your property or if you accidentally damage someone else’s personal items.

The good news is that coverage usually isn’t very expensive, whether you live in a rented apartment, condo, or home. Knowing exactly what your policy covers is crucial. For instance, flood damage isn’t a covered peril, and you might need additional insurance for really expensive items, like fine jewelry.

What renters insurance covers

Renters insurance policies typically include four main types of coverage — liability, personal property, additional living expenses (ALE), and medical expenses.^[1]

Learn more about each insurance coverage below.

• 

  Liability

  Liability insurance provides protection against potential lawsuits for bodily injury or personal property damage that you, a family member, or a pet causes. It can cover costs related to other people’s injuries or property damage on your premises, your legal costs, and court awards.

• 

  Personal property

  Personal property coverage protects your belongings against damage from covered perils. Policies typically cover damage from fire, smoke, explosions, lightning, vandalism, theft, water, and windstorm disasters, but specifics may vary.

• 

  Additional living expenses

  Also sometimes referred to as loss of use coverage, this insurance can cover expenses incurred when you have to temporarily leave your home after a covered disaster. This can include costs for hotel stays, temporary rentals, dining out, and more.

• 

  Medical expenses

  Medical expenses coverage helps pay for medical bills if someone incurs an injury while on your property. It doesn’t cover medical costs for you or anyone else living in your home.

What renters insurance excludes

It’s important to know what your renters insurance policy won’t cover. Here’s what you should know about common exclusions:

• Pet damage: Renters insurance won’t cover damages your pet causes to your own property, like if your pet chews up your couch.

• Property damage you cause: It also won’t cover any damage you intentionally cause to your personal belongings. This also excludes coverage for damages due to negligence and normal wear and tear.

• Your medical expenses: Renters insurance won’t cover the medical bills of you, your family, your pet, or anyone else living in your home.

• Flood and earthquake damage: Renters insurance excludes coverage for floods and earthquakes. If you live in an area prone to either, you may want to purchase add-on flood insurance or earthquake insurance.

• Normal living expenses: ALE insurance kicks in only after a covered disaster to pay the difference between your normal living expenses and your additional living expenses.

How much does renters insurance cost?

The average cost of renters insurance in the U.S. for a policy with $30,000 in personal property coverage is $22 per month, Insurify data shows.

But the cost of your coverage will vary depending on several factors, including the following:

• Coverage amount: The amount of coverage you select will influence your premium. For example, the average cost of a policy with $15,000 in personal property insurance is $17 per month, while renters with $50,000 in this coverage pay an average of $28 per month.

• Claims history: If you have past renters insurance claims, your insurer may charge you a higher premium to account for the risk of potential claims.

• Location: Your home’s location can affect how likely you are to file a claim. Living in a high-crime or disaster-prone area can increase prices, while being near a fire station can decrease them.

• Local fire protection: Insurers consider the number of fire departments and emergency communications systems in the area. Living in a better-prepared community can lead to lower rates.

• Age and construction of building: The quality and age of your home also matter. Older or poorly built homes are more prone to issues like leaks.

• Safety measures: Installing safety features, like alarms, sprinklers, and deadbolts, can reduce your risk and qualify you for discounts on your insurance premium.

Why do you need renters insurance?

Though states don’t require renters insurance, your landlord may require proof of it as part of your lease agreement. Even if you don’t have to purchase renters insurance, you should consider it because it can protect you in several ways.

Having a renters insurance policy protects you against unexpected financial losses and helps you pay to replace your personal belongings after a covered loss. Paying a relatively affordable monthly renters insurance premium is also cheaper than having to pay to replace your belongings out of pocket.

Renters insurance also includes liability coverage in the event that you accidentally damage someone else’s property or if someone suffers an injury at your home. It can cover legal costs and medical expenses for someone injured on your property.

How to buy renters insurance

Buying insurance when living in a rental property is a straightforward process, but you must first consider your specific needs and circumstances. Take the following steps to secure your policy:

1. Determine your coverage needs. A typical renters policy will cover your furniture, clothing, and other belongings, including liability insurance for property damage you cause and injuries to guests. It doesn’t cover all types of water damage, so consider flood insurance if you’re in a high-risk area. You may also consider options for high-value items, like coin collections, jewelry, or antiques.

2. Calculate how much you need to cover. List a home inventory of the specific items you want to cover and estimate their value. This helps you know how much personal property coverage you need. Don’t forget about high-value items when assessing your coverage limits.

3. Pick a renters insurance company. Compare policies from different companies. Look at their coverage options, deductibles, and premiums. Then, check customer reviews to gauge the insurer’s reliability and service quality.

4. Choose a renters policy. Take the time to understand your policy information, including what it does and doesn’t cover. To get the best deal, ask about discounts for safety features in your rental, like fire extinguishers and security systems, or for bundling renters insurance with other policies, like auto insurance.

Renters insurance FAQs