What Renters Insurance Is and Why You Might Need It

Like you would for your health or automobile, renting an apartment means getting yourself an insurance policy. Though some might find it unnecessary, renters insurance is very beneficial, and sometimes required, when signing a lease. So, before you write off this step of the rental process, let’s take a deeper look into what exactly renters insurance is and why you might need it.

In this article, we’ll explore the ins and outs of renter insurance, including coverage, benefits, costs, and how to set up a policy. Here’s a preview of what we’ll cover:

• What is renters insurance?
• What does renters insurance cover?
• How much does renters insurance cost?
• How to get renters insurance

What Is Renters Insurance?

Renters insurance is a specialized type of coverage designed specifically for people who rent homes. It primarily protects personal belongings from damage or theft and provides liability coverage in the event of unexpected incidents.

During your apartment search, you may encounter many landlords and property managers who require renters insurance coverage. Some may state minimum coverage requirements on the lease, meaning you’ll need to meet these standards and provide proof of insurance before moving in.

For example, a property manager may require a policy with at least $100,000 in personal liability coverage. This protects you, the renter, from financial responsibility if someone is injured in your apartment or if damage occurs to someone else’s property (such as a neighboring unit).

On the other hand, some properties may not impose any specific insurance requirements, giving you the flexibility to choose a policy that best suits your needs. However, even if renters insurance isn’t mandatory, it’s a smart investment to safeguard your belongings and protect yourself from unexpected costs.

What Does Renters Insurance Cover?

A standard renters insurance policy typically includes three key components: personal property coverage, personal liability coverage, and additional living expenses. Each of these categories offers protection for specific situations. Let’s take a closer look at what each one covers:

Personal property coverage

Your personal property includes all the belongings you own within your apartment—furniture, clothing, electronics, accessories, and more. Essentially, it covers almost everything you possess. Depending on the policy, personal property coverage can also extend to items inside your car. This means that if your laptop or phone is stolen from your car, you may be able to recoup the cost through your renter’s insurance.

It's important to note that personal property coverage typically has limits for high-value items such as jewelry, artwork, and collectibles. If you have expensive items, it's recommended to get additional coverage through a rider or endorsement.

Here are some other example scenarios where personal property coverage might come in handy:

• Damage caused by a fire or smoke in your rental unit.
• Water damage from a burst pipe or malfunctioning appliance.
• Theft or vandalism, whether it occurs in your rental or offsite.
• Storm-related damage, such as wind or hail, impacting your belongings.

Personal liability coverage

You might not expect to damage your property—or anyone else’s—but accidents happen. Imagine this: Your child is playing outside your apartment and accidentally kicks a soccer ball through a neighbor’s window, shattering their cherished vintage vase. If you’re held legally responsible or sued for the damage, your renters insurance can step in to cover the costs (after you’ve met your deductible).

Or picture this: A friend comes over for drinks, slips on a rug, and hits their head on your dining room table. In this case, your renters insurance can cover their medical expenses—just be sure to review your policy for specifics on coverage limits and medical expense breakdowns.

Now, let’s consider pets. Say your dog nips at a neighbor or guest inside your apartment. In most cases, renters insurance will cover the injury—unless your policy explicitly excludes pet-related incidents or has breed restrictions (which can be a frustrating limitation to look out for). If you have pets, it’s important to choose a policy that aligns with your needs and ensures you’re properly protected or get separate pet liability insurance.

Additional living expenses

Disasters can strike without warning, leaving little time to prepare. If your apartment becomes uninhabitable due to a natural disaster, fire, fallen tree, or any other type of damage, renters insurance can save the day. It covers the cost of temporary housing, such as hotel stays, so you won’t need to rely on favors or crash on a friend’s couch while your apartment is being repaired. With renters insurance, you’re protected when the unexpected happens.

The benefits of renters insurance far outweigh the disadvantages—because, honestly, there aren’t any. Renters insurance comes at a very affordable cost, and it will give you the coverage and peace of mind that you so desire. It’s incredibly affordable, offering both essential coverage and priceless peace of mind. While the cost is minimal, be sure to include it in your monthly rent budget or treat it like a move-in fee and pay it upfront. Either way, it’s a small price to pay for the protection it provides.

How Much Should I Pay for Renters Insurance?

Renters insurance usually comes at little cost. On average, most renters in the U.S. pay about $15-$20 per month or $180-$240 per year for their insurance coverage. To estimate your renters insurance costs, consider the following factors:

• Your state (rates vary from state to state)
• Your location (assess crime rates, natural disaster risks)
• Your insurance provider (different providers charge different rates)
• How much coverage you will need (more stuff = more coverage)
• The type of residence you’re living in (ex., single-family homes may have higher insurance rates than apartments because of higher risk of theft)
• The amount of your deductible (larger deductible = lower rate)

A standard renters insurance policy typically includes $100,000 in liability coverage—often the minimum required by landlords and property managers. Along with liability protection, your policy usually provides $25,000 in personal property coverage and comes with a $500 deductible (the amount you pay out of pocket before insurance kicks in). All of this for an affordable $180-$240 per year. Sounds like a good deal, right? That’s because it is. The benefits of renters insurance far outweigh the cost.

How to Get Renters Insurance

If you already have a provider, maybe for your car insurance, then it may be easiest to use that same provider for your renters insurance coverage. However, if you’ve never had any sort of insurance before or a policy in your own name, you’ll need to take a few steps:

1. Ask your property manager or landlord about their insurance policy. Typically, a property manager or landlord’s insurance policy covers the structure (the apartment building and any additional amenity structures) and the physical property, but it does not cover the tenant or any of the tenant’s belongings. Because of this, it’s best to get your own renters insurance policy in the case of theft, disaster, or accidental damage.
2. Estimate the value of your personal property. I’m sure you’ve never thought about how much everything you own is worth in total – I’m right there with you. But it’s good to have some sort of general number in mind so that you can decide what renters insurance plan will best fit you and your belongings.
3. Do thorough research and compare companies. One insurance company may be offering you a better deal than another. For instance, you may find that Insurance Company A is offering you a sweet deal with $500,000 in liability coverage for just a tad more money – let’s say for $40 more. If this is alluring to you, you may decide to go with Insurance Company A for their higher coverage. But maybe Insurance Company B is offering you a lower deductible for a higher monthly payment – how do you choose?
4. Get a quote. You’ll want to not only ask about general coverage and costs, but about deductibles and premiums as well. Get  quotes from several renters insurance providers to be sure you are getting the best deal.

Learn More About Renters Insurance on Apartments.com

Still have questions about renters insurance? Make informed decisions about your coverage with Apartments.com. Whether you're moving into a new apartment or just want to update your policy, our resources can help guide you through the process. Explore our wealth of resources and learn more about renters insurance and other important topics related to apartment living.