Is Renters Insurance Worth It? (2024) (2024)

FAQs

Is Renters Insurance Worth It? (2024)? ›

The Bottom Line: Is Renters Insurance Worth it? 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.

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.

Your Landlord Won't Cover Damages

For example, if there is a fire in your apartment, and you lose everything, your landlord will not pay to replace your belongings, even if the fire is not your fault. The same goes for many other kinds of emergencies that could befall a renter.

Renters insurance covers personal property, personal liability, medical payments and additional living expenses or loss of use, up to the limits of your policy.

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).

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.

Unlike some other states, California landlords are allowed to require tenants to obtain and maintain renters insurance while they are under the terms of the lease. This is done in part to protect landlords from lawsuits in the event that damage to the property causes it to become uninhabitable.

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.

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.

Costs of homeowners insurance vs. renters insurance. In general, you can expect your renters insurance quote to be less than for homeowners insurance. That's because homeowners insurance includes the building structure itself, which isn't the case for renters insurance policies.

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.

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.

Renters insurance can cover the food in your fridge

But before you start to make a new shopping list (and ideally after you've cleaned up the evidence), check in with your insurance agent: Food spoiled because of a power outage or failed appliance should be covered as personal property.

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.

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.

Personal Liability – Covers you for any damages for which you're held liable, and most landlords will require you to get at least $100,000 of this type of coverage. Medical Payments to Others – Covers medical payments for any injuries that have occurred on the property, and it will usually have a minimum of $1,000.

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.

Shopping around for renters insurance annually can help you find the best rates, so consider looking for a new policy around your renewal date. Besides this “annual audit,” you should also shop around for renters insurance if you have a major life change — which, in the case of renters insurance, is usually a move.