Renter’s Insurance: When You Need It, How To Get It

Just because you don’t own a home doesn’t mean you don’t need insurance: Renter’s insurance covers your belongings in the event of a fire, disaster, or burglary.

Just because you don't own a home doesn't mean you don't need insurance: Renter's insurance covers your belongings in the event of a fire, disaster, or burglary.Fire. Theft. Vandalism. Flooding.

Scary, right? Although we hope it won’t happen to us, anybody could be a disaster victim. And that’s why home owners have insurance—to protect the roof over our heads and replace possessions in case the unthinkable happens.

But what if you don’t own a home? If you’re renting, you may not be required to have insurance, but you should have renter’s insurance to protect yourself and your belongings.

What is renter’s insurance?

Renter’s insurance protects the stuff you own when you rent; your computer, clothes, furniture, jewelry, etc.

If your apartment burns down tomorrow, your landlord’s insurance isn’t going to cover this stuff. His insurance is going to pay for the building to be repaired, sure, but it won’t replace your one month-old MacBook Pro.

You may think you don’t own much, until you stop to think about what it would cost to replace everything in your apartment. Even with just a few gadgets, some furniture, and a small wardrobe, the value of your belongings can easily run into the thousands or tens of thousands of dollars. And because rental insurance is often very cheap, it’s good peace of mind.

How much does renter’s insurance cost? 

Renter’s insurance premiums are usually affordable. When I used it, I never paid more than $9 or $10 per month in renter’s insurance. The National Association of Insurance Commissioners says that, on average, renter’s insurance runs $15 to $30 per month—of course this depends on the value of your belongings and other factors. It’s easy to get a no-obligation quote from your insurance carrier, or online through one of our recommended insurers:

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How do you get renter’s insurance?

You can get coverage through most insurance agents. If you already have auto or life insurance, check with your agent about adding a renter’s policy. The multiple policies will probably snag you a couple discounts, meaning lower rates for all of your insurance plans.

How much coverage should I get?

To find out how much renter’s insurance coverage you need, take an inventory of your belongings, especially the high value, antique, or collectible items that you own. Copy documentation and take pictures in case you do need to file an insurance claim. Also, keep a rough inventory of the rest of your stuff: clothing, small appliances, kitchen items, small furniture/accessories, etc. You can even maintain an online inventory for free at sites like Know Your Stuff.

After you take inventory of your items, your insurance agent can help you decide how much coverage you need. Have him or her decipher all the fancy insurance lingo for you so you can make the right decision.

The main thing to consider in renter’s insurance is “full replacement value” versus “depreciated value”. Most people recommend to go with full replacement cost coverage—even at it’s higher premiums—because you can replace any items you lose with new items. For example, if you own a five year-old TV at the time you file your claim with depreciated coverage, you would only be reimbursed for the amount that TV was worth. With full replacement coverage, you would be reimbursed for the amount it would cost to buy a new TV. This makes sense since you will, in fact, have to go buy a new TV if yours is lost in a disaster.

What else does renter’s insurance cover?

Other than coverings your belongings in case of a disaster, renter’s insurance provides two other big types of coverage: liability protection in case someone is injured at your place and temporary living, a paid-for place to live if your rental becomes uninhabitable for some reason (you know, like if it burns down).  Both situations carry huge financial risk that can be avoided with an inexpensive renter’s insurance policy.

Like with most insurance, you’ll probably rarely (if ever) use your plan or file a claim. But many renters that have experienced disaster without insurance will probably tell you that it’s pretty stupid to not protect yourself when it can be done so inexpensively.

What about you? Have you used renter’s insurance? Has it ever saved you?

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About Amber Gilstrap

Amber is a twenty-something CPA from Kansas City, Missouri who loves writing, working out, and---of course---finding fresh ideas for saving money. Follow her on twitter @amberinks.


  1. Another benefit of renter’s insurance: Personal property that it stolen out of you car is not covered by your auto insurance. I learned the hard way. Someone broke into my car and stole about $1,000 of sports equipment (baseball bats are very expensive). When I tried to make a claim on my auto insurance I found out that my car insurance covers the things attached to the car, like a stereo. The Homeowner’s (renter’s insurance) policy covers the property inside the vehicle. Needless to say, now I have a renter’s policy because you never know

  2. I have beens renting for 5 years, I’ve never had renters insurance. After reading this post, I might have to make the call to my insurance agent. $10-12 per month seems well worth it, plus with the discount on auto insurance, it’ll practically pay for itself.

  3. Even if you don’t have much stuff, renter’s insurance can still make a big difference. A sprinkler went off in the condo I was renting and a couple thousand dollars worth of stuff needed to be replaced. My main expense, however, was temporary housing while the condo was being repaired. It was uninhabitable for three months but I still had to pay rent, plus electricity (and the electricity bill shot up because of all the equipment they brought in to dry the place out). I also had to pay rent for the temporary place I lived in during repairs, plus I had a week in a hotel while I tried to find a place to stay. Renter’s insurance paid for the hotel and rent at the temporary place. It even covered the cost of my meals while I was in the hotel. All in all it saved me about $6000, and only $2000 of that was to replace damaged belongings. I’m so glad I had it.

  4. My apartment requires renter’s insurance. In Houston it is a good idea because we get a good hurricane every few years. It’s not hard to inventory your stuff, especially the big stuff like electronics, furniture, etc. At the very least take some pictures of each room so that you have something to show.

  5. What most people don’t know is that when you combine your existing auto insurance coverage with a renters policy, the rates go down. We have heard of stories whereby the insured adds a policy with their existing carrier and it ends up costing less than a few bucks a month. Imagine having a 150/month premium for car insurance and then adding a renters policy. As a general rule of thumb, insurers usually provide a discount up to 10-15% if you carry more than two policies and a standard renters insurance policy purchased on its own typically costs no more than $15-$20 a month.

  6. Just to play the cynic: Should we pay for insurance for every bad thing that could happen to us? I think the key question should be: CAN you afford to replace the important stuff if it disappeared?

    If your emergency fund can handle it, isn’t it better to put your money there? Same for flight insurance, laptop etc.

    The reason insurance agencies offer these is that they make (your) money off them. Now if something is catastrophic to your finances (health, car, etc) that’s a different story…

    • Depends on how much you have. If you only have $5,000 worth of stuff, then that makes sense. But what if you have $30,000 or more worth of stuff? Then it makes sense for the insurance. As, David pointed out, most people really underestimate how much their stuff is worth. Until I did an inventory, I though $10,000 was more than enough. Come to find out, I have more like $45,000 worth of stuff (mainly clothes, furniture, electronics, and guitars). I think the clothes were the biggest surprise because individually they are not much, but when you have 100+ articles, including lots of dress clothes, it really adds up.

      You just have to look at the cost/benefit analysis.

  7. I find it interesting that your article says ‘protect yourself and your belongings.’ Renter’s insurance will only pay you back on your stuff. Do you have false reassurance? I mean are you not quite as careful because you are insured? Do you have deadbolts? Are you putting wood in the window so It’s not easy to open? Locking the house every time you leave it, even just a little while? Hiding your computers when you leave? Not keeping a large amount of money in your house, or tossing out boxes in plain view that advertise your new TV? Granted, this wont help a fire, but these steps will go a long way in making sure that insurance in never needed.
    Take care.

  8. Mel Ritt says:

    I’m so glad we had renter’s insurance when our apartment when robbed a few years ago. Knowing we had coverage really helped eased the pain of the break in. We had insurance through State Farm that cost us $12/mo and we ended up making a claim for over $7,000. It was definitely worth the small monthly investment! Inventorying is a great idea but we certainly weren’t prepared like that. If this does happen to you, I was able to find a lot of receipts online through sites like Amazon who keep a record of past purchases.

    Also, keep in mind, most policies have limits on certain categories such as jewelry. If you have an especially valuable piece or a engagement/wedding band set, you’ll want to get a rider to cover that particular piece. Riders are also very inexpensive ($60/yr for $6,000 of coverage) and well worth the piece of mind.

  9. I had renter’s insurance when I was living in my apartment. The $16 bucks a month was worth the extra peace of mind to me. I trusted myself not to damage anything, I just didn’t trust my neighbors.

  10. Carl Lassegue says:

    What a great article! If I did not have renter’s insurance before this article I definitely would purchase a policy after reading this article. The deciding factor for my purchase was the discount I received from my insurance company. Spending $25 a month for peace of mind in case of a disaster is definitely worth it to me.

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