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Do you need renters insurance and is it worth it?

Fact-checked with HomeInsurance.com

    Article Highlights

    In your excitement to move into your new rental space, you may not spend too much time focused on obtaining a renters insurance policy. And because renters insurance is not legally required by any state, many renters wonder if this type of policy is even necessary. Let’s look more closely at what renters insurance covers, how much it costs and why it’s a good idea to purchase it, even if it is not legally required.

    What is renters insurance? 

    Renters insurance covers your personal belongings that are stored either on or inside the property. This includes furniture, sports equipment, clothing, small appliances — anything that is not built into your unit. It also covers your personal belongings stored in other locations, such as a storage unit or your car. Renters insurance almost always covers theft, bodily injury and loss due to disasters such as fire and water. Unlike homeowners insurance, the structure of your building is not covered, though most policies will cover living expenses if you have to move out of your rental due to damage. 

    When is renters insurance required?

    Renter’s insurance is not legally required by any state, however your landlord may require you to purchase it before starting a lease. Because landlords often have multiple tenants living in their building, requiring renters insurance helps avoid landlord liability in cases of tenants’ property being damaged.

    Since renters insurance is not a legal requirement, some renters may shy away from it completely. Even if renters insurance is not required by your landlord, it can still be beneficial and worth purchasing. There’s no telling what events may take place during the course of your leasing agreement, and accidents are inevitable. You’ll likely want to be insured to avoid the potential losses associated with when things go wrong.

    Why do I need renters insurance?

    There are a number of common scenarios where renters insurance is helpful. If you leave your laptop in your car and your car is stolen, then your renters insurance helps cover the replacement costs of your laptop. Or if your dog bites your neighbor, then it covers your neighbors necessary medical treatment. Imagine if a pipe bursts and the water damages your furniture and electronics — you’ll have replacement coverage for your items as well as help to pay for your hotel room while your rental undergoes repairs.

    If you do need to file a claim, you should do so immediately following the event in which the damage or loss occurred. You’ll have to fill out paperwork and document the damage, and take as many pictures as possible. Most insurance providers allow you to file a claim through the company website or app, as long as you provide answers to all the questions. 

    Should I get renters insurance if it isn’t required?

    Unless you can afford to replace all your belongings out of pocket or pay for someone’s unexpected medical costs following an accident inside your rental, then having a renters insurance policy makes sound financial sense. 

    It also covers you in case someone decides to sue you because of damage to property or for being at-fault in an accident. If you are sued and do not have the proper insurance coverage, you could be forced to pay out of pocket to cover legal expenses in addition to the damage. Renters often mistakenly assume the landlord’s insurance policy covers them, but a landlord’s insurance only covers the building structure.

    What renters insurance covers

    Standard renters insurance policies include four main parts. You can also supplement your policy if you feel you need more coverage in each of these categories. 

    Personal property coverage 

    Personal property coverage protects your personal items in your rental unit, including electronics, furniture and clothing. This coverage extends to your personal belongings located off your property too, such as items in a storage unit or garage. 

    You should be aware of the perils your policy covers for your personal belongings, which are typically fire, smoke, vandalism and water damage. Flood and earthquake damage is not included, though they can often be added to supplement your policy.


    Liability coverage pays for costs associated with lawsuits if you cause damage to someone else’s property. Liability is used if you’re involved in an accident that causes injury or damage to property. The liability limits in most policies start at $100,000, but many experts recommend at least $300,000 in liability coverage.

    Medical payments for others

    If a guest is visiting your rental and gets injured, medical payment coverage pays toward their medical costs. This provides no-fault medical coverage, which allows your guests to submit medical claims directly to your insurance provider.

    Loss of use

    If you are displaced because of damage or loss to your rental, this coverage reimburses your additional living expenses during the displacement. It covers expenses such as hotel rooms and meals, and pays the difference between your normal expenses and what you incur because you are displaced.

    Where to get renters insurance and how much it costs

    Renters insurance is easy to obtain and almost all major insurance carriers offer policies. A good place to start when you decide to purchase renters insurance is with your current auto carrier. Not only can you get a quote from a company you already conduct business with, but you might qualify for a multi-policy discount. 

    Another benefit to renters insurance is how inexpensive it is. According to the Insurance Information Institute, the national average for renters insurance premiums is $179 per year. Like other types of insurance, your premium cost depends on several factors, such as the coverage amount you select and your location. 

    Location has a significant impact on your premium. The average rate for premiums varies widely from state to state. For example, the average annual premium is $126 in North Dakota, compared to Oklahoma where the average is $236 per year. 

    The takeaway

    • Renters insurance is not legally required in any state, although your landlord may require you to purchase it prior to signing a lease.
    • Renters insurance is similar to homeowners insurance, except it does not include coverage for the structure of the building.
    • Renters insurance covers replacement of your personal belongings, located both inside your rental or if your belongings are in another location. It also provides loss of use coverage, which reimburses you for expenses if you can not stay in your rental due to damage.
    • Renters insurance also includes liability, which gives you financial protection against lawsuits for bodily injury or property damage you cause, and loss of use coverage. 
    • Renters insurance is inexpensive and easy to obtain through almost any major insurance carrier.


    If you have asked yourself, “Should I have renters insurance?” then the simple answer is yes, because it offers you coverage for many common events of damage, like theft and fire. Even though it is not legally required, it protects your finances from disaster by providing liability protection and coverage for your personal belongings.

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