Renters insurance guide: what it covers and why you need it
Your landlord's insurance covers the building, not your things. Renters insurance protects your belongings, covers you if someone is hurt in your home, and pays for somewhere to stay if your place becomes unlivable.
Published by Marcus L. Barber, former licensed Maryland property and casualty producer (2010–2012)Reviewed by Marcus L. Barber on Updated This guide is general education, not advice for your situation. We're an independent publisher, not an insurer or agent, and we may earn a commission from partner links. How we make money.
Key points
- Your landlord's policy covers the building, not your belongings or your liability.
- Renters insurance covers personal property, liability, guest medical bills and extra living expenses.
- The average renters policy cost $171 a year in 2022, according to NAIC data.
- Flood and earthquake are excluded, as with homeowners insurance.
Why your landlord's policy isn't enough
Your landlord insures the structure: walls, roof, built-in fixtures. That policy doesn't pay to replace your furniture, clothes or laptop after a fire or break-in, doesn't cover you if a guest is injured in your unit, and doesn't pay for a hotel while repairs are made. Many leases now require tenants to carry renters insurance for exactly these reasons.
What renters insurance covers
| Coverage | What it pays for |
|---|---|
| Personal property | Your belongings if they're damaged or stolen by a covered event like fire, smoke, theft, vandalism or burst pipes. Usually covers items away from home too, like a stolen bike or laptop. |
| Liability | Claims and legal costs if you're responsible for someone's injury or for damaging their property. Limits generally start around $100,000; some experts recommend at least $300,000. |
| Medical payments to others | Small medical bills for guests hurt in your home, regardless of fault, typically $1,000 to $5,000. |
| Additional living expenses | Hotel, meals and other extra costs if a covered loss makes your home unlivable while it's repaired. |
What isn't covered
- Flood and earthquake: both are excluded. Renters can buy flood insurance for their belongings through the National Flood Insurance Program (up to $100,000 in contents) or a private insurer.
- Your roommate's things: unless they're named on your policy, they need their own.
- High-value items over sub-limits: jewelry, watches and collectibles have low theft limits unless scheduled.
- Your car: damage to your vehicle is covered by auto insurance, though items stolen from your car are usually covered by renters insurance.
What it costs
Renters insurance is one of the cheapest policies you can buy. The average renters policy cost $171 a year in 2022, about $14 a month, according to NAIC data compiled by the Insurance Information Institute. Your price depends on where you live, how much coverage you choose, your deductible and your claims history. Bundling with auto insurance often earns a discount on both.
Replacement cost or actual cash value
An actual cash value policy pays what your belongings were worth at the time of the loss, after depreciation. A five-year-old TV pays out only a fraction of what a new one costs. A replacement costpolicy pays what it costs to buy new items of similar quality. Replacement cost costs a bit more and is usually worth it.
How to buy
- Estimate how much your belongings are worth (see how much renters insurance you need).
- Choose a liability limit and a deductible you can afford.
- Get quotes from a few insurers with the same limits, and ask about bundling with your auto policy.
- Check complaint records with the NAIC's Consumer Insurance Search.
- If your lease requires it, add your landlord as an interested party so they're notified if the policy lapses.
How this guide was made
We drafted this guide with help from AI writing tools, working from the sources listed below. Every fact was checked against those sources, and Marcus L. Barber read and reviewed the full page, including its title, description and FAQs, before it was published. AI tools don't decide what we publish; a person does. Our editorial standards.
Sources
- Renters insurance, Insurance Information Institute
- Facts + Statistics: Renters insurance, Insurance Information Institute
- Do I need flood insurance for my home?, Insurance Information Institute
- Buy a flood insurance policy, FEMA FloodSmart (NFIP)
- Insurance for your house and personal possessions, Insurance Information Institute