6 Good Reasons to Get Renter's Insurance

If you're renting an apartment or home, you'll need an insurance policy to cover your belongings. Your landlord's property insurance policy covers losses to the building itself; whether it's an apartment, a house, or a duplex. Your personal property and certain liabilities, however, are covered only through a renter's insurance policy that you, as a tenant, have to find and pay for. Statistics show far fewer renters have insurance than homeowners. While 95% of homeowners have a homeowner's insurance policy, only 55% of renters have renter's insurance, according to a 2024 report from SafeHome.

Why do so few renters have insurance? One explanation is that many people incorrectly assume they are covered by their landlord's policy. Another reason is that people underestimate the value of their belongings. If you add up the value of just your clothing and electronics, it probably wouldn't take long to get into the thousands of dollars.

One more often overlooked reason is liability: If someone is injured in your house—a friend, neighbor, or the pizza delivery person—they could sue you. Even if you thought you didn't need insurance, here are six good reasons why you should get a renter's insurance policy.

1. It's Relatively Affordable

The average renter's insurance policy costs $15 to $30 a month in 2020 (the most recently available data), according to the National Association of Insurance Commissioners (NAIC). Your actual cost will depend on factors, including how much coverage you need, the type of coverage you choose, the amount of your deductible, and where you live.

2. It Covers Losses to Personal Property

A renter’s insurance policy protects against losses to your personal property, including clothes, jewelry, luggage, computers, furniture, and electronics. Even if you don't own much, it can quickly add up to a lot more than you realize; and a lot more than you'd want to pay to replace everything.

Renter's policies protect against a surprisingly long list of perils. A standard HO-4 policy designed for renters, for example, covers losses to personal property from perils including:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism
• Theft
• Volcanic eruption
• Falling object
• Weight of ice, snow, or sleet
• Accidental water overflow or stream
• Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems
• Freezing
• Sudden and accidental damage from artificially generated electrical currents

Losses resulting from floods and earthquakes are not covered in standard policies. A separate policy or rider is required for these perils. In addition, a separate rider might be needed to cover wind damage in areas prone to hurricanes.

3. Your Landlord Might Require It

Your landlord's insurance covers the structure and the grounds, but not your belongings. A growing number of landlords require tenants to purchase their own renter's insurance policies, and they'll expect to see proof.

If you need assistance finding or obtaining coverage, your landlord may be able to help. This could be the landlord's idea or an "order" from the landlord's insurance company. The idea is that if the tenants are covered, some responsibility can be shifted away from the landlord.

4. It Provides Liability Coverage

Liability coverage is also included in standard renter’s insurance policies. This provides protection if someone is injured while in your home or if you (or another covered person) accidentally injure someone. It pays any court judgments and legal expenses up to the policy limit.

Most policies provide at least $100,000 of liability coverage and a smaller amount for medical-payments coverage. You can request (and pay for) higher coverage limits if necessary.

5. It Covers Your Belongings When You Travel

Renter's insurance covers your personal belongings, whether they are in your home, car, or with you while you travel. Your possessions are covered from loss due to theft and other covered losses anywhere you travel. Check your policy or ask your insurance agent for details on what constitutes "other covered losses."

6. It May Cover Additional Living Expenses

If your home becomes uninhabitable due to one of the covered perils, your renter's insurance policy may cover “additional living expenses,” including the cost associated with living somewhere else temporarily, food, and more. Check your policy to find out how long it will cover additional living expenses and if it caps the amount the company will pay.

The Bottom Line

Renter's insurance provides coverage for your personal belongings, whether in your home, car or with you while you're on vacation. In addition, renter's insurance provides liability coverage in case someone is injured in your home or if you accidentally cause injury to someone.

Be sure you understand what your policy covers, and ask your agent about available discounts, deductibles, and coverage limits. For example, be sure you know whether your insurance provides replacement cost coverage (RCC) for your personal property or actual cash value (ACV).

When choosing renter's insurance, make sure to choose a company that works best for you. The first will pay to replace your 15-year-old carpet, say, with a new one, at current market rates, while the second will only reimburse you for the value of a carpet that's 15 years old. Needless to say, RCC costs more.