6 Good Reasons to Get Renter's Insurance (2024)

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 findand 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.

Key Takeaways

  • When renting a home, you'll need an insurance policy to cover your personal belongings known as renter's insurance.
  • Landlords have property insurance, but those policies are designed to cover the building, rather than your personal items.
  • Many renters don't purchase renter's insurance, either because they don't think it is necessary or believe they are covered under the landlord's policy.
  • Your landlord may require you to purchase renter's insurance
  • The cost of renter's insurance is relatively low.

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 onfactors, including how much coverage you need, the type of coverage you choose, the amount of your deductible, and where you live.

2. ItCovers 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 areasprone to hurricanes.

You may have to pay a deductible on your policy before coverage kicks in.

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 anothercovered 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.

Renter’s insurance policies don't cover losses caused by your own negligence or intentional acts. For example, if you fall asleep with a lit cigarette and cause a fire, the policy most likely will not cover the damage.

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 totheft 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 longit willcover additional living expenses and ifit caps the amount the company will pay.

Is Renter’s Insurance Really Worth It?

Yes. If you can afford it, renters insurance is usually worth it. It will protect your belongings, provide liability coverage, and may cover your personal items when you travel. Renter's insurance protects you from a long list of perils, as well.

What Are the 3 Things Covered by Renter’s Insurance?

Renter's insurance usually covers a long list of items, but three of them are clothing, electronics (including your computers and tablets), and furniture.

How Much Does Renter’s Insurance Cost?

It could cost you as little as $15 to $30 a month, according to the National Association of Insurance Commissioners.

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 oractual cash value (ACV).

When choosing renter's insurance, make sure to choose a company that works best for you. The first will payto replace your 15-year-oldcarpet, 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.

6 Good Reasons to Get Renter's Insurance (2024)


6 Good Reasons to Get Renter's Insurance? ›

Renters insurance can help you repair or replace property after loss due to many types of damage or theft. It can also provide coverage for an accident at your residence. Policies usually have very affordable annual premiums.

What is the main reason someone would want to have renters insurance? ›

Renters insurance can help you repair or replace property after loss due to many types of damage or theft. It can also provide coverage for an accident at your residence. Policies usually have very affordable annual premiums.

What are the 3 things renters insurance provides you with and what purpose does each of them have? ›

Renters insurance covers personal property, personal liability, medical payments and additional living expenses or loss of use, up to the limits of your policy. Learn more about what renters insurance covers and the types of renters insurance coverages.

What is the main reason someone would want to have and need to have renters insurance Quizlet? ›

Renter's insurance covers your personal property. What is the purpose of liability coverage on a renter's insurance policy? It covers unintended damage and accidents in the rental. There is no need for a college student to have a renter's insurance policy.

What are 2 reasons people typically do not get renters insurance? ›

Many renters don't purchase renter's insurance, either because they don't think it is necessary or believe they are covered under the landlord's policy. The cost of renter's insurance is relatively low.

What does renters insurance actually cover? ›

Renters insurance is an insurance policy that can cover theft, water backup damage, certain natural disasters, bodily injuries and more in a rented property. If you rent an apartment, home or even a dorm, renters insurance is recommended for protecting your space and belongings in the event of a covered accident.

Is it worth having renters insurance? ›

Renters insurance coverage is almost always worth it. It is much more affordable than other policies, including home or auto insurance, and provides valuable financial protection. Even if you can save enough money to cover unexpected loss, renters insurance may be worthwhile.

What are the three major parts of a renter's insurance policy? ›

Renters insurance has three basic coverage components: personal possessions, liability, and additional living expenses.

Which one of the following is not covered by renter's insurance? ›

Damage Caused by Floods, Earthquakes and Sinkholes

Flooding, earthquakes and sinkholes are all examples of natural disasters that are not covered by a typical renters insurance policy.

Will renters insurance cover a broken window? ›

Renters insurance will not cover a broken window in your own residence, but the personal liability coverage in your policy will cover damage to someone else's window if it's determined you're the liable party.

What is the purpose of insurance? ›

Insurance helps to protect you and your family against unexpected financial costs and resulting debts or the risk of losing your assets. Insurance helps protect you from expensive lawsuits, injuries and damages, death, and even total losses of your car or home.

Who is most likely to purchase renters insurance? ›

Expert-Verified Answer

A tenant is most likely to purchase renter's insurance to protect their personal belongings and liability.

Why do you think insurance is important to have? ›

Insurance is your financial plan's safety net – having the right insurance at the right amount protects you and your family from unforeseen events and provides a baseline financial cushion.

How many people don't have renters insurance? ›

55 percent of U.S. renters, or 61 million people, currently have renter's insurance policies. This number could rise to more than 65 million within the next year. 75 percent of insured renters are required by their landlords to obtain renter's coverage.

Is a lapse in renters insurance bad? ›

The risks of a renters insurance lapse

The biggest risks of letting your renters insurance lapse are potentially large out-of-pocket expenses if your belongings are damaged or stolen while you are uninsured, but there are other risks to consider.

Why do mortgage companies require homeowners insurance? ›

Homeowner's insurance pays for losses and damage to your property if something unexpected happens, like a fire or burglary. When you have a mortgage, your lender wants to make sure your property is protected by insurance. That's why lenders generally require proof that you have homeowner's insurance.

Who needs renters insurance Quizlet? ›

for tenant occupants of a property, i.e. individuals who do not own or have an interest in the property.

Do I need renters insurance if I live with my boyfriend? ›

Does each roommate need renters insurance? Many insurance companies will require roommates to have their own separate renters insurance policy rather than allowing roommates to be on a policy together. If your landlord doesn't mandate renters insurance, you and your roommates aren't required to carry a policy.

What is the primary difference between homeowners insurance and renters insurance? ›

Homeowners insurance covers the actual building you live in (and associated structures such as garages). With renter's insurance, the landlord will be expected to have coverage on the building, while your insurance will cover your personal property.

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