What Is Renters Insurance and How Does It Work?

Renters insurance helps tenants pay for lost or damaged items and can help with temporary living costs following covered incidents.

Jacqueline DeMarco
Jacqueline DeMarco
  • 13+ years writing insurance and personal finance content

  • Insurance, lending, and retirement expert

Jacqueline has contributed content, and her personal finance passion, to dozens of noteworthy financial brands, including Credit Karma, Bankrate, and MagnifyMoney.

Featured in

media logomedia logo
Katie Powers
Edited byKatie Powers
Photo of an Insurify author
Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

media logomedia logo

Updated December 18, 2023

Reading time: 4 minutes

Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.

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

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 some more insight into what renters insurance is, how to buy it, and what you can expect to pay for this coverage.

How does renters insurance work?

Renters insurance is a type of property insurance you can purchase if you rent your living space. It protects your belongings — including furniture, clothes, and electronics — in the event of a covered loss, like fire, natural disasters, or water damage. 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 does renters insurance cover?

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

CoverageWhat’s IncludedWhat’s Excluded
  • Liability protection against lawsuits for bodily injury or personal property damage caused by you or a family member
  • Damages your pet does to someone else’s property
  • Cost of defending yourself in court
  • Court award up to the limit of the policy
  • No-fault medical coverage
  • Your own pet damaging your personal property
  • Medical bills for you, your family, or your pet
  • Damage you cause to your personal belongings
Personal property
  • Protects your personal belongings against damage
  • Damage can stem from fire, smoke, explosions, lightning, vandalism, theft, water, and windstorm disasters (or whichever disasters your policy specifically lists)
  • Flood and earthquake damage
Additional living expenses (ALE)
  • Expenses incurred after a covered disaster
  • Hotel stays, dining out, temporary rentals, etc.
  • Normal living expenses; only covers the difference between your normal living expenses and ALE

How much does renters insurance cost?

You pay around $15 to $30 per month for renters insurance, making it one of the most affordable insurance coverages you can buy. The cost for your policy will vary depending on the value of your personal items, where you live, the amount of coverage you chose, and your claims history.

For example, you will face higher premiums if you live in an area with a higher crime rate or extreme weather conditions that make you more likely to file a renters insurance claim. A policy with more coverage or a lower deductible can also lead to higher costs.

Here’s an overview of the factors that affect how much you pay for renters insurance:

  • 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.

What Does a Renters Insurance Policy Cover?

What Does a Renters Insurance Policy Cover?

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:

  • 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.

  • Calculate how much you need to cover. List an 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.

  • 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.

  • 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.

What Is Renters Insurance and What Does It Cost?

What Is Renters Insurance and What Does It Cost?

How much renters insurance do you need?

To determine how much renters insurance coverage you need, the big thing to keep in mind is the value of your possessions. It can take quite a bit of work, but you need to create a home inventory and make a detailed list of all your belongings and their estimated values. That way, you know exactly how much coverage you’d need if the worst happens and you have to replace your belongings.

Renters insurance FAQs

Still have questions about renters insurance? Check out the answers to these commonly asked questions.

  • What is renters insurance?

    Renters insurance is a form of property insurance that applies to rental properties like apartments and condos. It covers your personal property and protects you from liability claims.

  • Does renters insurance cover theft?

    Most renters insurance policies do cover you in the event of theft. Always check the fine print of your policy to know exactly what qualifies as a covered loss.

  • How much does renters insurance cost?

    Renters insurance costs an average of $15 per month in the United States. This price can vary based on your living situation and the insurance company you’re working with. Insurance discounts may be able to lower the cost.

  • What’s the best way to compare insurance quotes?

    If you’re looking to compare insurance quotes side by side, Insurify has your back. Simply enter some basic information about yourself, and Insurify will give you 10+ free quotes so that you can pick the policy that meets your needs and budget.


  1. Insurance Information Institute. "Renters Insurance."
Jacqueline DeMarco
Jacqueline DeMarco

During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Jacqueline is a contributor for Insurify and has worked with more than a dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.

Katie Powers
Edited byKatie PowersAuto and Life Insurance Editor
Photo of an Insurify author
Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

media logomedia logo

Latest Articles

View all