How Much Renters Insurance Should a Landlord Require? (2024)

How Much Renters Insurance Should a Landlord Require? (1)


Accidental––and potentially intentional – damage occurs all the time in rental situations. As an independent landlord, you need to know how much renters insurance to require, to protect yourself and your property. To help determine renters insurance policy amounts, it's important for the tenant to know the value of the property and typical coverage limits. Most renters should have insurance that covers at least $20,000 in damages, but it could go even higher in some cases.

How Much Renters Insurance Should a Landlord Require? (2)


This content, except as otherwise indicated or stated on this site, is the property of TransUnion Rental Screening Solutions, Inc. This content is for educational purposes and for convenience only. Trademarks used are the property of their respective owners, and no endorsem*nt or affiliation is implied. The information presented in this content is “as is” without warranties of any kind, and specifically is not represented to be complete and does not constitute legal advice, and is subject to change without notice. You are encouraged to check these terms from time to time for changes, and by accessing this site you agree to these terms and all terms listed. Laws and regulations may vary by state and locality. Consult your own counsel if you have legal questions related to your rental property practices and processes.

How Much Renters Insurance Should a Landlord Require? (3)


Remember that this material is intended to provide you with helpful information and is not to be relied upon to make decisions, nor is this material intended to be or construed as legal advice. You are encouraged to consult your legal counsel for advice on your specific business operations and responsibilities under applicable law. Trademarks used in this material are the property of their respective owners and no affiliation or endorsem*nt is implied.

It’s an unpleasant truth, but things like break-ins, fires, floods, and destructive visitors happen all the time in rentals. And, when the worst rains down on you and your tenants, it's helpful to have a protective umbrella––specifically, renters insurance.

A tenant’s belongings are their own responsibility. Unfortunately, some tenants incorrectly assume a landlord’s policy will cover their own personal property losses in the event of something like a fire. The last thing you want is for tenants to discover the hard way that this is not the case.

A 2022 study by home security company SafeHome shows thatonly 55% of renters carry rentersinsurance, and of those, the vast majority (75%) were required to carry insurance by their landlord.

This means that if you don’t require renters to have insurance, chances are slim renters will get it on their own. Then, if there is a catastrophic event, your renters could lose everything––and have no way to recoup the damages.

Thankfully, renters insurance can soften the blow by covering the cost of some or all of their personal property, depending on their coverage limit, and the nature of the loss. Requiring proof of rental insurance should be a must before signing a lease, just like vetting rental applicants withthorough tenant screeningthrough a service like SmartMove®.

That said, it can be confusing to know exactly how much renters insurance tenants should have. This guide covers how to figure out how much renters insurance tenants should carry and how to calculate how much their possessions may be worth.

Why require renters insurance

Like with any insurance, the hope is your renters never have to make a claim. However, if disaster does strike, you don’t want your tenant looking to you to recoup their losses.

There are many excellent reasons to require renter’s insurance when you rent out property. Some of these include:

It’s good practice: Typically, landlord insurance doesn’t cover tenant property losses. Replacing an entire apartment’s worth of stuff out of pocket could be a major financial setback––no matter who pays.

Potentially help reduce personal liabilty: For example, if a tenant or visitor is injured on the property, having renter’s insurance may lower you or your tenant’s personal liability. This may be especially important if you are renting to college students.

Potentially help with renter relocation if displaced: One benefit of many renters insurance plans is providing support for temporary living costs, for example, if the apartment is destroyed in a fire and is unlivable.

Protection in event of property damage: If your tenant’s property is damaged, renters insurance often provides a way for tenants to cover their losses.

Potentially mitigates pet risks: There are many pros and cons to allowing pets in your rental. If something bad happens—such as property damage or even a dog bite––your tenant’s renters insurance may cover it.

How Much Renters Insurance Should a Landlord Require? (4)

Pro Tip:

In addition to renters insurance, you may want to consider adding pet fees, rent, or deposits if you allow tenants to have animals in the rental.

Learn More

What is renters insurance and what does it cover

For people who lease or rent properties, renters insurance protects tenants and their possessions, similar to how homeowners insurance protects people who own their own place.

According to Investopedia, most renters insurance covers:

  • Personal possessions
  • Living expenses (in the case that an apartment becomes uninhabitable), and
  • Liability/medical insurance that typically covers $100,000 to $300,000 of damages, in case someone gets injured on the property

In some situations it can also cover destruction of the landlord’s property due to tenant negligence. This may give landlords additional protection and potentially lowers the likelihood of their own premiums increasing due to multiple claims.

If you allow tenants to keep pets on your property, renters insurance may also cover liability for dog-bite injuries and pet-related damage.

Renters Insurance Details You Should Know

How Much Renters Insurance Should a Landlord Require? (5)

The Average Cost of Renters Insurance

According to NerdWallet, the average cost of renters insurance is $12/month in 2024, but can fluctuate to almost twice that. The cost of renter’s insurance can vary based on several factors, such as:

  • Cost of living in a specific region
  • If the area has higher crime rates
  • How prone the area is to natural disasters, like hurricanes or wildfires

In fact, in some disaster-prone areas, instances like flood or storm damage are not covered by renters insurance. If your unit is in a severe weather-prone area, your tenants may want to look into purchasing an additional rider or a dedicated policy to help cover likely weather-related occurrences.

Who Sets Up, Manages, and Pays for Renters Insurance

It’s 100% the tenant’s responsibility to get set up and manage renters insurance. Required proof of renters insurance is one of many common lease terms. Typically, landlords require proof of a rental policy before officially signing an agreement or allowing move in.

Cataloging Items and Determining Value

It’s up to your tenant to work with their insurer to create a list of covered items and determine their value. Typically, renters are asked to provide proof of items, such as photos and receipts, by uploading digital photos to a cloud-based server and keeping records in a fireproof box. When it comes time to file a claim, a tenant will need to present appropriate documentation to the insurance company.

Replacement Value Policy vs. Cash Value Policy

According to the Insurance Information Institute, there aretwo optionswhen it comes to purchasing renters insurance:

  1. Replacement Value Policy: this type of policy reimburses the policyholder for the actual cost of repurchase. It’s essential to save receipts with a Replacement Value Policy.
  2. Cash Value Policy: This type of policy reimburses an item’s current value. Cash value policies tend to be cheaper, but they don’t cover the current costs tenants incur when replacing goods.

How Much Renters Insurance Should a Landlord Require? (6)

Pro Tip:

Unexpected property damage can be a big hit to landlords, whether it’s from a natural disaster or a tenant. Discover what screening questions to ask new tenants to help reduce your risk after the lease starts.

Learn More

How much renters insurance should a tenant get

If you require tenants to have renters insurance, you should request a minimum coverage amount. To decide that, it will be helpful to know more about coverage amounts.

Know What Rental Insurance Covers

According to the Investopedia article mentioned above, most renters insurance policies cover personal items, living expenses, and liability insurance (typically from $100,000 to $300,000 in damages).

The same article also states that the average renter's belongings are worth roughly $20,000. As you create your policy, you may want to consider requiring renters to carry insurance that covers at least this much.

What Rental Insurance Doesn’t Cover

On the other hand, there are many things that standard renters insurance does not typically cover. According to Plymouth Rock Assurance, standard renters insurance policies don’t usually cover things like:

  • Some natural disasters like floods, earthquakes, and sinkholes
  • Pest damage, like bed bugs, termites, or mice
  • Mold damage
  • Damage caused by the tenant
  • Items over the max limit (many policies max out for single items at a certain value)
  • Items belonging to friends, roommates, or visitors not on the insurance plan
  • Vehicles (but it may cover items stored inside the vehicle)

If you live in an area prone to natural disasters, your tenant has particularly valuable items (like musical instruments, jewelry, or an expensive collection), or may be impacted on other items on the list, they may want to get special supplementary insurance to help make sure their possessions are covered.

How Much Renters Insurance Should a Landlord Require? (7)

Determining How Much Insurance Coverage may be Needed

According to NerdWallet, most renters underestimate how much stuff they have and only think about big-ticket items such as computers. This can then lead them to be under-insured and not recoup their full losses if the worst happens.

However, even a collection of 100 DVDs worth only $5 each has a value of $500. This is why most guidance recommends renters take inventory of possessions to help determine real value.

How Renters Can Create a Home Inventory

Before shopping around for renters insurance, tenants should review their residence and make an itemized list of all their belongings. Bankrate provides helpful, step-by-step instructions for creating a home inventory, including:

  1. Start small, such as with a closet or small room, then work through possessions little by little. Likewise, you can also start with your most recent purchases, if that’s easier.
  2. Stay organized. Include basic details for each item. Be consistent and include the same information for all items. Include serial numbers of items, where available.
  3. Take good photos. Take wide angle shots of each room, then zoom in for close-ups on individual items. Don’t forget about clothing, which averages from $3,000 to $5,000, and items such as sports equipment that may be in storage.
  4. Store receipts somewhere safe. Keep them organized and updated, as needed.
  5. Stay up to date. Update your records with new purchases or when you get rid of items on the list.

How Much Renters Insurance Should a Landlord Require? (8)

It can be a lengthy process, but it only needs to be done every few years (unless there are major purchases).

Once you have your inventory, it’s time to research replacement values. Renters tend to underestimate appreciation, and the cost of buying something new could be significantly more than the fair market value of the same item in used condition.

Help Protect Your Property with SmartMove

Renting out property isn’t always a picnic. Between missing payments, late night repairs, evictions, and accidental––or potentially intentional––property damage, independent landlords are constantly on the edge of disaster. While renters insurance helps tenants protect their possessions, -fast, affordable tenant screening with SmartMove may help protect your property business.

Discover if your rental applicant truly has the means to cover insurance along with rent. Tenant credit checks help you learn more about a potential tenant’s financial track record and see if there’s anything you need to be aware of.

Income Insights, exclusive to SmartMove, helps reveal if the renter’s income matches what they claim on the rental application. What’s more, included in every screening package, ResidentScore helps predict evictions 15% better than a traditional credit score alone.

A criminal background report zips through millions of federal and state-level crime records searching for a potential match to your applicant. Meanwhile, a previous eviction check sees if there are any eviction-related proceedings that may be attached to your renter’s information.

With fast reports on-demand, your tenants can even apply and be screened on the same day. All reports are backed by TransUnion, a major credit agency with four decades of data expertise, so you can feel more confident about result accuracy.

Don’t let destructive renters rain on your parade––or your livelihood. Help protect yourself with fast, affordable screening through SmartMove.


Great Reports. Great Convenience. Great Tenants

Know your applicant.

Screen Now

How Much Renters Insurance Should a Landlord Require? (9)

How Much Renters Insurance Should a Landlord Require? (10)

Additional Disclosure:

Remember that this material is intended to provide you with helpful information and is not to be relied upon to make decisions, nor is this material intended to be or construed as legal advice. You are encouraged to consult your legal counsel for advice on your specific business operations and responsibilities under applicable law. Trademarks used in this material are the property of their respective owners and no affiliation or endorsem*nt is implied.

Jump To:
  1. Why require renters insurance
  2. What is renters insurance and what does it cover
  3. Renters Insurance Details You Should Know
  4. How Renters Can Create a Home Inventory
  5. Help Protect Your Property with SmartMove

Be more confident when choosing a tenant.

Screen Today

How Much Renters Insurance Should a Landlord Require? (11)

Trending Articles

View All

  • 10 Rental Documents Every Landlord Should Keep on File Read More
  • How to Advertise Rental Property (Top 6 Tips) Read More
  • 15 Potential Tax Deductions for Landlords During Tax Season Read More
  • What is Vacancy Rate: 3 Tips for Landlords to Determine Vacancy Rate Read More
  • Vacation Rental Management: Top 7 Tips and Watchouts Read More
  • The 6 Most Popular Articles for Independent Landlords in 2023 Read More

View All

How Much Renters Insurance Should a Landlord Require? (2024)


How Much Renters Insurance Should a Landlord Require? ›

Liability protection is the bigger part of any rental policy. Before you ask, “How much renters liability insurance do I need?” The correct answer is simple: You will need a minimum of $100,000 in personal liability coverage. That is typically enough to cover medical and legal bills in most situations.

What is the most common amount for renters insurance? ›

Renters insurance is relatively inexpensive. According to NerdWallet, the average renters policy costs about $15 per month for up to $30,000 in personal property coverage. That's solid coverage for less than the cost of a few cups of coffee a week.

How should a person decide how much coverage she needs when selecting renters insurance? ›

Bottom line: Choose your coverage amount based on how much stuff you have and how much it would cost to replace them. Btw, if you need coverage for your big-ticket items, such as your jewelry or fine art, you'll want to look into our Extra Coverage (also known as scheduled personal property coverage).

How much is renters insurance ok? ›

The average cost of renters insurance is about $15 to $20 per month1. However, what you end up paying depends on a number of factors.

How much renters insurance should a landlord require in California? ›

According to Investopedia, most renters insurance covers: Personal possessions. Living expenses (in the case that an apartment becomes uninhabitable), and. Liability/medical insurance that typically covers $100,000 to $300,000 of damages, in case someone gets injured on the property.

Why is my renters insurance so high? ›

Insurance is all about risk, so customers that live in areas with higher risks of claims usually have to pay more for coverage. Some location-based factors that impact renters insurance rates can include: The rate of crimes, especially theft, in your ZIP code.

What is a good deductible for renters insurance? ›

You'll choose your deductible when you buy a renters insurance policy. A higher deductible means your claims will cost you less money out of pocket. Typically, renters insurance deductibles are $500 or $1,000, but companies often provide a range of options.

How do you decide how much coverage you need? ›

To determine how much coverage you need, take an inventory of your belongings, especially items with higher value like jewelry, electronics and collectibles. Once you understand what you have and its value, you can decide if the predetermined limits on your policy offer adequate coverage.

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.

How important is 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. Note that your landlord's property insurance doesn't cover your belongings.

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.

Does renters insurance increase after a claim? ›

In most cases, yes, your insurance premiums will increase after filing a renters claim. As it recalculates your premiums in the wake of a claim, your insurance company will generally consider the type, amount and frequency of claims. The more often you file claims, the riskier you are to insure.

What factors do you think determine the premium paid for a renters insurance policy? ›

Actual cash value versus replacement cost

The difference between actual cash value and replacement cost insurance has an influence on the cost of your insurance premium. When your policy states that it will pay actual cash value, it means that it pays for the value of the item at the time of loss, minus depreciation.

Should a landlord be named on renters insurance? ›

Your landlord shouldn't be listed on your renters insurance policy as an additional insured. Having an additional insured on your renters insurance means that you would be paying to cover them and their personal property too.

Should landlords require renters insurance in California? ›

While renters insurance is not required by law in California, some landlords may require it for you to live in their building. It's generally a good idea to have at least some form of coverage as your landlord's insurance is not liable for any damage to your personal property.

How much is renters insurance per month in California? ›

The Cost of Renters Insurance in California

According to data collected by Quadrant Information Services in 2023, renters insurance costs $187 per year or $15.58 per month on average in the state of California.

What does a standard renters insurance policy cover? ›

Most renters policies will cover losses due to fire, smoke, theft or vandalism, and certain kinds of water damage. They don't cover losses due to floods. Visit the National Flood Insurance Program for information about flood coverage.

How much does a typical renters insurance policy cost per month quizlet? ›

Renters insurance is relatively inexpensive (average monthly premiums as low as $20) and can be even more affordable if associated with car or other insurance policies where multi-policy discounts are available.

Is Lemonade renters insurance good? ›

After reviewing more than 20 of the largest renters insurance providers in the country, our team rated Lemonade 4.6 out of 5 stars based on our in-depth methodology.

Top Articles
Latest Posts
Article information

Author: Greg Kuvalis

Last Updated:

Views: 5932

Rating: 4.4 / 5 (55 voted)

Reviews: 86% of readers found this page helpful

Author information

Name: Greg Kuvalis

Birthday: 1996-12-20

Address: 53157 Trantow Inlet, Townemouth, FL 92564-0267

Phone: +68218650356656

Job: IT Representative

Hobby: Knitting, Amateur radio, Skiing, Running, Mountain biking, Slacklining, Electronics

Introduction: My name is Greg Kuvalis, I am a witty, spotless, beautiful, charming, delightful, thankful, beautiful person who loves writing and wants to share my knowledge and understanding with you.