Do You Need Renters Insurance?

Do You Need Renters Insurance?
(Protect your valuables – and more – with affordable renters insurance.)

This is posted in time for all the college students heading off to their own dwellings.

If you’re renter, protecting your personal belongings with a renters insurance policy is a must. Renters insurance is a fairly comprehensive insurance program that you can customize to protect all of your things. And independent insurance agents can walk you through the process to help you find the best, most affordable policy for your situation. 

What Is Renters Insurance?

Renters insurance is similar to homeowners insurance, but it doesn’t cover the building or home that you’re living in, since you don’t own it. It won’t cover any damage to your house or apartment. 

Here’s one way to think about the difference between what is considered part of the house or apartment and what’s considered your personal items. Imagine flipping your house or apartment upside down and shaking it. Anything that would drop out is usually considered personal contents, while anything that stays would be part of the house.

But sometimes appliances can be treated differently in rental agreements, so be sure to read and understand if you’re responsible for damage to appliances if your place already has them. 

What Does Renters Insurance Cover? 

On a basic level, renters insurance will cover your contents and give you liability coverage. However, you can customize your policy to include many additional types of coverage options, including:

  • Personal contentsThis is the backbone of a renters policy. It covers your personal belongings, such as clothes, furniture, and electronics. There’s typically a minimum coverage amount, such as $20,000, but this can be increased. 
  • Personal liabilityProvides coverage for lawsuits that could be brought against you, including both defense costs and settlement amounts. Typically starts at $100,000 in coverage. 
  • Medical payments: This has a lower coverage limit, typically between $1,000 and $5,000, and pays for smaller injuries that occur in your household, but only to people who don’t live there. 
  • Loss of use: This is usually an automatic coverage and pays you a certain amount of money to temporarily live somewhere else if your house or apartment is uninhabitable due to a covered claim. 
  • Replacement cost on your contents: This is an important coverage but isn’t always automatic. It will replace your personal belongings with items of similar kind and quality and removes depreciation and age from your claims check. 
  • Water damageWhile you might not be on the hook to pay for water damage to your floor or cabinets, adding this option gives you protection from water damage to your contents. 
  • Cyber insuranceMany insurance companies offer cyber protection on a renters policy, which would pay for things such as online extortion, cyber bullying, and online fraud attacks. 
  • Personal computers and electronics: Some companies offer specialized coverage for computers and electronics. This could include higher limits if they’re damaged or stolen, since most base policies cap electronics coverage at between $1,000 and $2,000. 
  • Valuable articles: If you have expensive or valuable jewelry, firearms, or other items, you can add these separately to cover them for almost anything, including if you lose them, without any deductible.  

Keep in mind that if you have a claim, the insurance company probably won’t just blindly write you a check. They’ll want to know what items you had in your rental and what the value was, possibly along with some type of proof, such as pictures or receipts.

Is Renters Insurance Mandatory? 

Most of the time, renters insurance is not mandatory. There are some apartment complexes and rental home companies that require you to show proof of a renters insurance policy before you sign a lease. 

This is partly to absolve them of any responsibility for your contents or lawsuits brought against you in their rental units. It can also show a level of personal financial responsibility that indicates a good tenant, since you’ll have to put down the money to buy a policy. 

How Much Does Renters Insurance Cost? 

The average annual premium for renters insurance is $188. Many insurance companies set a minimum premium for renters policies at around $150 for the basic limits. For policies that include more coverage on your belongings, higher liability limits, water damage, cyber protection, and valuable article coverage, you could be looking at between $200 and $300 a year. 

Is Renters Insurance Worth It? 

Yes, renters insurance is worth the cost most of the time. It’s typically inexpensive compared with other types of insurance, such as homeowners insurance or auto insurance. For the price, you can receive quite a bit of coverage. 

Considering that most policies have a minimum of $20,000 or so in personal contents coverage, plus the added coverage for liability and loss of use, then it’s almost always a good and safe choice to buy renters insurance. 

Why Should I Buy Renters Insurance? 

If your apartment complex or rental house does not require you to buy renters insurance, you might still want to consider buying it because of the value you receive for a relatively low premium. 

Claims do happen, whether it’s a fire, theft, wind, or water damage. Any of these things could happen in any given year, and it’s a much better deal to pay $200 a year for a renters policy then have to replace $20,000 or so of your personal belongings, some of which might be difficult to replace. 

What to Watch out for with Online Renters Insurance Quotes

Most insurance companies allow you to buy a renters policy online by yourself, similar to buying car insurance. However, it can be easy to overlook certain coverage options or shortchange your limits. 

For example, many people think that $20,000 is more than enough coverage on their contents. While this may be true for some people, $20,000 actually wouldn’t go all that far if you had to replace every single one of your clothing items, appliances, kitchenware, electronics, etc. 

It might also be tempting to go as low as possible on your liability coverage, but liability is one of the least expensive options on your policy. Increasing your coverage to $300,000 or $500,000 might only cost you another $5 or $10 a year.


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