What does renters insurance cover and how much does it cost?

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. For a deeper dive into our process, see our complete methodology. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry.

Renters insurance pays to replace your belongings, covers your legal and medical bills if you hurt someone or damage their property and pays for a place to stay if a fire or other covered loss makes your rental unlivable. Your landlord’s insurance covers only the building, so without your own policy, replacing your couch, laptop and clothes comes out of your savings.

Anyone who rents and couldn’t afford to replace everything they own at once needs renters insurance, and your landlord may also require it in your lease. A policy with $40,000 in personal property coverage and $300,000 in liability averages $263 a year, but average renters insurance costs by state range from $136 to $504, so check your own state’s average before you compare quotes.

Does your landlord’s insurance cover your belongings?

Your landlord’s insurance pays to repair the building and covers the landlord’s own liability, but it doesn’t cover your personal property when a fire, theft or other loss destroys it. Your own renters policy has to cover your belongings, your liability and your temporary housing.

The table shows which policy pays for each part of a loss in a rental.

What does a renters insurance policy pay for?

A standard renters insurance policy pays to replace your belongings, defends you against injury and damage claims, covers small medical bills for injured guests and pays for temporary housing after a covered loss. Each part of the policy pays up to its own limit.

• Personal property coverage replaces your belongings. It pays to repair or replace your furniture, electronics and clothing when a covered event damages them or someone steals them, at home or away from it.
• Personal liability coverage pays when you’re at fault. If someone sues you over an injury in your unit or damage you caused to their property, it pays for your legal defense and the damages you owe, up to your limit.
• Medical payments coverage pays a guest’s smaller injury bills. It covers medical costs for a guest hurt in your home regardless of who was at fault, which can settle a minor injury before it turns into a lawsuit.
• Additional living expenses coverage pays for temporary housing. When a covered event makes your rental unlivable, it pays for a hotel or short-term rental plus the amount your meals cost above your normal food budget.

What does renters insurance pay after a burglary, fire or lawsuit?

Renters insurance pays for the losses that follow a break-in, a building fire or an accident at your place, with a different coverage handling each part of the bill. These situations show how a claim plays out.

• Someone breaks in and takes your electronics and your bike. Personal property coverage pays to replace them up to your limit, minus your deductible, the amount you pay toward each claim before insurance pays the rest.
• A kitchen fire in another unit forces you out for two weeks. Additional living expenses coverage pays for your hotel and the extra you spend eating out, and personal property coverage replaces your smoke-damaged clothes and furniture.
• Your bathtub overflows into the apartment below. Personal liability pays to repair your neighbor’s ceiling and belongings. Personal property coverage pays for your own soaked rugs and furniture because a sudden overflow from plumbing is a covered event.
• Your dog bites a guest. Medical payments coverage handles the guest’s smaller bills, and personal liability pays your legal costs and damages if the guest sues, unless your insurer excludes breeds like pit bulls.

What events does renters insurance cover?

A standard renters insurance policy covers your belongings only against the causes of loss it lists by name, from fire and theft to frozen pipes and falling objects, so a loss from anything off that list isn’t covered. Insurers call this standard renters form an HO-4 policy.

The standard HO-4 form lists 16 of these causes of loss, which insurers call named perils, though the count can run lower in some states and your insurer’s version can differ. The table groups them by type of loss.

What doesn’t renters insurance cover?

Renters insurance won’t pay for flood damage, sewer or sump pump backups, earthquakes, neglect, intentional damage, war or nuclear hazards, and it caps what it pays for jewelry and other valuables. You can buy a separate policy or an add-on for some of these losses, while others stay excluded under any renters policy.

• Buy flood insurance separately. Renters insurance excludes water that comes in from outside, such as an overflowing river or storm surge. Flood insurance for renters from the National Flood Insurance Program or a private insurer covers your belongings instead, so floodwater doesn’t leave you paying to replace everything it ruins.
• Add water backup coverage if your building has a basement or sump pump. Standard renters policies don’t cover damage from a failed sump pump or a backed-up drain. A water backup endorsement, an add-on that changes what your policy covers, pays to replace what a backup ruins.
• Add earthquake coverage if you live in a quake zone. Renters insurance excludes earthquakes and other earth movement, and insurers sell earthquake coverage as an endorsement or a separate policy, so replacing belongings a quake destroys doesn’t come out of your savings.
• Schedule jewelry and other valuables. Standard policies cap payouts on items like jewelry, art and antiques, so an engagement ring stolen in a burglary may be paid at a fraction of its value. A rider or floater, extra coverage for one specific item, covers it for its appraised value.
• Expect no coverage for neglect, intentional damage, war or nuclear hazards. Damage from skipped maintenance or deliberate acts stays excluded, and so do losses from war, government seizure and nuclear hazards, with no add-on available under a renters policy.

How much does renters insurance cost?

Renters insurance costs $263 a year on average for a policy with $40,000 in personal property coverage, $300,000 in liability and a $1,000 deductible.

Your state also sets the price. State averages run from $136 to $504 a year for the same policy, so compare any quote against your own state’s average rather than the national one.

Raising your property coverage adds more to your premium than raising your liability limit. The table shows average annual premiums for policies with a $1,000 deductible.

Why do some renters pay more for the same coverage?

Insurers set renters insurance rates on where you live, the type of home you rent, your claims history and, in most states, your credit, so two renters buying identical coverage can get different prices.

Insurers charge more in ZIP codes with more theft and weather claims, and renting a single-family house typically costs more than renting an apartment because theft is more common in houses. A building with more security and fire safety features can bring your rate down.

Past claims raise your rate. Most states let insurers use a credit-based insurance score built from your credit report, so paying bills on time can lower your premium. A dog breed your insurer considers high risk, a pool or a trampoline can raise your rate, and some insurers exclude certain breeds from liability coverage altogether.

How much renters insurance coverage do you need?

You need enough personal property coverage to replace everything you own at today’s prices and at least $300,000 in liability coverage to protect your savings from a lawsuit. These choices set your limits when you buy or renew a policy.

• Film a room-by-room inventory and add up its value. Open closets and drawers, and note what each item would cost to buy new. Setting your personal property limit at that total means a fire or burglary claim pays for everything you lose instead of stopping at a limit set too low.
• Choose replacement cost coverage. Replacement cost pays what a new version of each item costs today. Actual cash value pays only what your used item was worth after depreciation, the loss in value from age and wear. Replacement cost policies typically pay the full amount after you buy the new item and submit receipts, so keep every receipt from your replacement purchases.
• Raise your liability limit to $300,000. Raising liability from $100,000 to $300,000 takes a policy with $40,000 in property coverage from $246 to $263 a year. The higher limit keeps a serious injury claim from reaching your savings once costs pass $100,000.

How to compare renters insurance quotes

Compare quotes from at least three insurers using the same personal property limit, liability limit and deductible, since the same $40,000 policy with $300,000 in liability and a $1,000 deductible ranged from $195 to $421 a year across insurers.

Each insurer asks for your address, the coverage limits and deductible you want and your claims history before it gives you a price. You can compare renters insurance quotes from several insurers at once, so you enter that information one time instead of on every insurer’s site.

How to pay less for renters insurance without cutting coverage

Raising your deductible, bundling with your auto policy and claiming safety discounts all lower your premium while your coverage limits stay the same. Savings vary by insurer, so ask about each one when you get quotes, along with other ways to save on renters insurance like loyalty and retiree discounts.

• Raise your deductible from $500 to $1,000. That change saves $22 a year on average and it only makes sense if you could pay $1,000 out of pocket the week after a burglary or fire.
• Bundle renters insurance with your auto policy. Average discounts for bundling renters and auto insurance range from 3% at GEICO to 8% at Farmers Insurance. Get bundled and separate quotes and compare the totals, since bundling policies with one insurer only saves money when the combined price beats buying each policy separately.
• Report safety devices to your insurer. Smoke detectors, deadbolts, fire extinguishers and burglar alarms qualify for discounts at many insurers, which lowers your premium for equipment your apartment may already have.

Is renters insurance worth it?

Renters insurance is worth buying for most renters, since a single burglary, fire or lawsuit can cost more than years of premiums, and a policy averages $263. If your lease requires coverage, you need a policy regardless of what you own.

A college student living away from home may already have partial coverage through a parent’s policy, which commonly covers a dependent’s belongings at up to 10% of the parent’s coverage. Ask the parent’s insurer what 10% of their coverage comes to in dollars before you pay for a separate policy.

Before you sign, confirm your personal property limit matches your inventory total, ask for replacement cost coverage and add water backup coverage or a valuables rider if either applies to you. You can also compare the best renters insurance companies on price and service before you choose.

Maryalene LaPonsie

Staff Writer

 

 . .

Maryalene LaPonsie is a staff writer for Insure.com. She has 25 years of professional writing experience. She specializes in personal finance — insurance, investing and retirement.

Related Articles

How much does hurricane insurance cost in Florida? By Maryalene LaPonsie

Homeowners insurance rates by state: See how your state compares By Alisha Ambre

What is condo special assessment insurance and how much do you need? By Maryalene LaPonsie

What is dwelling coverage and how much do you need? By Maryalene LaPonsie

Cost of living by state By Chris Kissell

Cost of living calculator By Nupur Gambhir