Renters Insurance

Do I Need Renters Insurance? And How Much Should I Get?

Reviewed by licensed agent

Updated Jan 30, 2024

You only need renters insurance if your landlord or your building requires it.

Even when renters insurance isn't required, it's a good idea to get a policy so you won't lose money if your belongings are stolen or damaged, or if you're sued because someone was injured at your home.

How much renters insurance you need depends on what you own and how concerned you are about a lawsuit. Policies are affordable, costing about $18 per month for a standard policy with $30,000 in property coverage and $100,000 in liability coverage.

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When is renters insurance required?
Should you buy renters insurance when it's optional?
How much renters insurance do I need?
Frequent misconceptions about renters insurance
Overlooked benefits of renters insurance

When is renters insurance required?

You will only be required to get renters insurance if your landlord or property management company requires that tenants have it.

Landlords might make renters insurance mandatory to limit the risk that tenants will come after them for personal property damages or liability costs. It's not uncommon for a landlord to require renters insurance, but fortunately, the best renters insurance companies make it easy to compare quotes online and purchase a policy.

Should you buy renters insurance when it's optional?

Even when it isn't necessary, renters insurance is very often worth it because a cheap policy gives you more protection against unexpected expenses.

While you may not think anything bad will happen, having renters insurance means your costs will be covered if:

Your rental has a fire
A water leak damages your belongings
Your electronics are stolen

Your dog bites someone
Someone vandalizes your apartment
Someone slips on front steps that you maintain

A renters insurance policy will protect you from unexpected costs. For example, a renters insurance policy will pay to replace a stolen laptop and could pay for repairs if your bike's tires are slashed. Many policies also pay for alternate housing if you can't stay in your home after a covered incident.

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Renters insurance coverage

Personal property damage: If your personal belongings are damaged or destroyed by an event covered by your renters insurance, your insurance company will cover the cost of the damage up to your policy's limits.
Personal liability: If a guest is seriously injured at your home, renters insurance pays for your liability costs, such as your responsibility for medical bills and lost wages.
Loss of use: If your residence becomes uninhabitable due to a covered event, your renters insurance policy will cover the extra living costs you have to pay.
Medical protection[/link]: This covers medical expenses for someone injured in your residence if they're smaller injuries that are less than $1,000 or $2,000. This coverage pays the bills directly so you can avoid a lawsuit or needing to use your liability coverage.

Advantages for different types of renters

Renters with a pet

Typically, a policy's liability coverage would cover any damages (including medical bills) associated with a dog bite. If you didn't have renters insurance, you would have to pay for those costs yourself.

The average cost per dog bite claim in the U.S. is approximately $39,000, an amount that could be financially crippling for many renters and a huge cost for most.

Renters who have a low income

Without renters insurance, unexpected costs to replace or repair your belongings can be more than what's affordable. Extra costs could be a major financial burden that stretch household budgets or use up any savings.

Renters who have financial assets

Wealthy tenants benefit from renters insurance to protect against expensive liability claims or to cover expensive furnishings. For example, a fire could destroy hundreds of thousands of dollars in personal property. Without renters insurance, the renter would be responsible for the full cost to replace their belongings.

The purpose of renters insurance is not just to prevent financial ruin but also to save you money from unexpected disasters. If a wealthy tenant purchases renters insurance with an appropriately high limit to cover the damages, their only additional expense will be the cost of their deductible when making a claim.

Renters forced out of their homes

If you can't live in your home after a covered event — smoke damage, for example — you would be stuck paying for the cost to stay somewhere else. With renters insurance, you will have loss of use coverage, which covers any additional costs such as hotel stay, food and special transportation — until you return home or find a new permanent residence.

College students living off campus

Many college students should also consider buying renters insurance if they live off campus. When living in the dorms or on campus, students are usually covered by a parent's home or renters insurance policy. After moving off campus, a basic renters insurance policy is usually enough to cover electronics, musical instruments, sports equipment and other valuables. Plus, the liability portion of a policy will protect you if someone is injured during a party you host.

How much renters insurance do I need?

Get a renters insurance policy with enough personal property coverage to cover the value of your property and at least $100,000 in personal liability coverage.

These two features cover tenants' largest financial risks and will generally be the main drivers of the cost of their policies.

How much personal property coverage do I need?

The property coverage limit on your renters insurance policy should be close to the value of what you own.

Getting this level of coverage will protect you in a worst-case scenario event where all of your belongings are destroyed. If you are willing to take the risk and want to save some money, you can choose to purchase coverage limits lower than the value of what you own. However, you should be aware that the policy will only cover you up to those limits in an extreme event.

Insurance companies will often give you the choice of property coverage limits ranging anywhere from as little as $5,000 to hundreds of thousands of dollars. Before you buy a policy, make a personal inventory of the value of your possessions to determine how much renters insurance is enough to cover your cost of replacing them.

Policies will have limits on high-value items or certain categories of property. For example, a policy with $30,000 in property coverage may only cover up to $2,500 worth of jewelry. If you have more than what's covered, you can add on an endorsement to increase the limits for:

Jewelry
Firearms
Electronics

Artwork
Cameras
At-home business property

How much personal liability coverage do I need?

A standard renters insurance policy will usually include $100,000 of liability coverage, which is likely enough to cover most tenants.

However, renters who are concerned about the risk of an expensive lawsuit can get higher limits. For example, if your air conditioning unit fell out of your window due to your negligence and seriously injured a passerby, you could be on the hook for damages well in excess of $100,000.

Your choice of liability coverage limits will depend upon your tolerance for risk. Keep in mind that increasing your liability limits is usually affordable. A policy with $300,000 or $500,000 in liability coverage may only cost a few more dollars per month than a typical policy. That may be worth the investment for your peace of mind.

Frequent misconceptions about renters insurance

Common misconceptions about renters insurance could keep you from getting the right coverage for your situation.

Misconception: My landlord insures my personal property

Despite what many renters think, their landlord or management company does not insure a tenant's personal property. Generally, a landlord’s insurance only covers the building or unit you live in. Renters are solely responsible for insuring their personal property, liability and expenses related to loss of use.
Misconception: My possessions aren't valuable enough to warrant renters insurance property coverage

Almost everyone’s personal possessions are worth more than they think. The average value of what fits into a standard two-room apartment is approximately $30,000, according to Allstate. When you calculate the value of your belongings, you may be surprised at how much it's actually worth. However, even if a renter has no personal property, the liability and loss of use coverage still make renters insurance worthwhile.
Misconception: I don't need liability coverage

No matter how careful a tenant thinks they are, they should strongly consider the protection provided by liability insurance. Too many renters think they don’t need liability protection because they rarely have guests or they believe the likelihood of someone injuring themselves at their place is almost nonexistent. This form of self-assurance is dangerous. Accidents happen — your dog could bite a guest, or a visitor might slip and fall — and it’s best to be prepared for anything.
Misconception: Renters insurance is expensive

Renters insurance is usually affordable. The average cost of renters insurance in the U.S. is $18 per month or $215 per year. That's much cheaper than homeowners insurance, which costs an average of $1,516 per year. Prices will vary, but with the cheapest renters insurance companies, you could pay $12 or $14 per month for a policy with $30,000 in personal property coverage and $100,000 in liability protection.

Overlooked benefits of renters insurance

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Beyond the obvious coverages and benefits of renters insurance, there are some lesser-known perks that might convince tenants it’s a valuable purchase.

Your coverage applies outside your residence: Coverage for your personal property and liability also travels with you, so you can relax with your belongings no matter where you're hauling them. The limits of a renters insurance policy still apply, but the coverage is certainly better than nothing. It’s easy to misplace a necklace or watch while traveling, and those items might also be more susceptible to being stolen (and thefts are covered by renters insurance).
Coverage add-ons: Like homeowners insurance, renters insurance has endorsements and floaters to bolster their coverage of personal property. Common endorsements and floaters are for jewelry, furs, electronics, collections (such as baseball cards or stamps) and earthquake protection. Without a renters insurance policy to attach endorsements and floaters to, a tenant would have to have a specialty policy underwritten for any specific item, which would likely be far more expensive.
Renters insurance protects you for short-term rentals: Renters insurance also protects a policyholder and their personal property from damages related to short-term renters, such as Airbnb guests. Home-sharing is a good way to make some extra money and, as long as a renter is within the rules of their policy, renters insurance offers a layer of protection in the event something were to happen to their guests or belongings.

Frequently asked questions

Is renters insurance required?

Only some landlords require tenants to get rental insurance, and you'll usually find out before signing a lease if you need to get a policy. Even when insurance isn't required for your rental, it's usually worth it because cheap policies will pay for losses if your belongings are stolen or damaged, or if there's a situation where someone is hurt in your home.

How much renters insurance do I need?

A standard renters insurance policy covers $30,000 worth of personal property and $100,000 in liability. However, you should adjust your coverage to your situation. If you have high-end or luxury items, you'll need more personal property coverage, while college students will usually need less.

What could happen if you don't have renters insurance?

If you don't have renters insurance, you'll have to pay to replace belongings that are stolen or damaged from an event such as a fire. You'll also have to cover the cost of injuries that happen at your home. The insurance policy will protect you from large unexpected costs. On the other hand, if nothing bad happens, you'll save about $18 per month by not getting renters insurance.

Methodology

The average cost of renters insurance is based on hundreds of renters insurance quotes from multiple companies across the country. Rates are based on an unmarried 25-year-old man who lives alone, has no pets and has never filed a claim. The policy includes: