Imagine coming home to find your apartment has been burglarized or discovering that a kitchen fire has damaged most of your belongings. Without renters insurance, you could be facing thousands of dollars in replacement costs.
Despite the fact that renters insurance can cost less than most people spend on coffee each month, only about 41% of renters in the U.S. have it, according to a survey by the Insurance Information Institute (III). While that survey found that rates of renters insurance are climbing among millennials and Gen-Xers (at 41% and 48%, respectively), only 24% of baby boomers are covered.
Whether you're a college student in your first apartment, a family renting a house, or a retiree downsizing to a rental, this type of coverage isn't just about protecting your stuff—it's about protecting your financial stability when life throws you a curveball.
What is renters insurance and what does it cover?
Renters insurance is a type of insurance policy that protects your property and provides additional liability coverage in the event of theft or certain accidents,” says Kimberly Bowser, CPCU, Vice President of National Product & Experience Development for Grange Insurance, an affiliate of Integrity Insurance.
Coverages can vary by insurer, but a base renters policy provides coverage for personal belongings, certain liability scenarios, and extra living costs.
Coverage for personal belongings
A renters policy can help replace or refund personal property that is stolen or damaged by a covered incident, even if it happens away from home. This can include items like laptops and other electronics, clothing, bedding, kitchen appliances like a coffee maker or stand mixer, dishes, and furniture.
Covered incidents typically include:
- Fire and smoke damage
- Water damage
- Theft
- Vandalism
- Lightning
- Explosions
- Windstorms or hail
Liability
Beyond protecting your physical belongings, renters insurance typically includes liability coverage, which can protect your finances if someone is injured in your rental home or if you accidentally damage someone else’s property.
"Liability coverage can help pay for legal fees, medical bills, and settlement costs associated with an insurance claim or lawsuit, potentially saving you hundreds of thousands of dollars,” Bowser says.
Additional living expenses
Say a burst pipe leaks into your apartment and you have to move out for a few days while repairs are done. In addition to covering any damages to your belongings, your renters policy can help cover the cost of things like hotel stays or temporary rentals, meals, and other expenses while you have to be away from home.
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What does renters insurance not cover?
Each insurer has different coverage options, but in general, renters insurance does not cover:
- Floods
- Earthquakes
- Damages caused by a policyholder’s negligence
- Intentional injury or damage caused by a policyholder
- Pest infestations
- High-value items like jewelry or collectibles
Some insurers may offer partial coverage for certain items on this list, or you may need to purchase a supplemental policy.
How much does renters insurance cost?
Renters insurance can be quite affordable and is often much less expensive than a homeowners policy. Premiums can vary by state, insurer, and other factors. According to the III, the average renters insurance premium cost was $170 in 2021. Most policy holders pay roughly $15-$20 per month.
Many insurance carriers also provide discounts when you bundle renters insurance with other policies, like car insurance.
Do I really need renters insurance?
Some landlords may require it as part of your lease agreement, but in most cases, you don’t technically have to get renters insurance before you move in. While it may not be a legal requirement, it is a smart investment.
Look around your home and take a quick inventory of your stuff. If you lost it all today, would you have enough saved to replace it?
"Even if you don’t own much, the cost to replace your belongings can add up quickly,” Bowser says. “When we think of valuables in a home, we often look no further than furniture. We tend to forget about electronics, clothing, shoes, and even things you may not use a lot, like a gas grill or Kitchen-Aid mixer.”
Bowser also warns that renters shouldn’t rely on their landlord’s insurance policy to cover their things in the event of a fire, theft, or other incident.
"Your landlord probably has insurance to cover any damages to the building, but your possessions aren’t covered by that policy,” she says. “In fact, since the landlord doesn’t own your belongings, they don’t have an insurable interest in it anyway.”
What to look for in a renters insurance policy?
A basic renters insurance policy will provide personal property coverage to help you replace your belongings after a covered loss, as well as liability coverage for injuries to others or damage to their property if you are at fault. However, not all policies are the same.
Bowser calls out four important factors to consider when choosing your renters insurance policy:
- Policy coverage limits. These are typically based on an estimated value of your belongings. Consider the cumulative value of your belongings to make sure you have the right limit in place. “You may want to add an endorsement to your policy to cover high value items, such as an engagement ring, rare collectibles, or expensive hobby equipment,” Bowsers says.
- Actual cash value vs. Replacement cost. When selecting a renters policy you’ll typically choose between actual cash value (ACV) or replacement cost coverage. Certain items lose value over time, either due to age or normal wear and tear. ACV coverage typically comes with a lower premium cost and will pay out the depreciated value of your belongings when you file a claim. Replacement cost is a higher premium cost and pays for new items.
- Liability limits. Beyond protecting the physical items you own, renters insurance typically includes liability coverage. It’s best to consider your financial situation when selecting a liability limit.
- Deductible costs. A deductible is the amount you would pay out-of-pocket during a claim. A higher deductible can lower your premium cost, while a lower deductible means you’ll pay less out-of-pocket in the event of a claim. Your insurance agent can help you determine the right option.
How to get renters insurance
Don’t wait until disaster strikes to realize the importance of renters insurance. Contact a local independent agent today find a policy that fits your needs and budget. Your peace of mind is worth the investment!
Common renters insurance questions
Does renters insurance cover pets?
Yes and no. Many renters policies cover pets, but they may have restrictions based on breed, species, weight, or past behavior. For example, some dog breeds may not be covered, or animals that are above a certain weight limit can be excluded from a policy. Insurers may also exclude pets that have a history of aggressive behavior or have injured someone in the past.
Keep in mind that most rental policies don’t cover damage caused by your pet to the rental unit, only damages or injuries caused to others and their property. For example, if your puppy tears up your couch or favorite rug, that would not be a covered incident.
Does renters insurance cover my storage unit?
Yes, renters insurance will typically protect your personal belongings in a storage unit from covered incidents; however certain limits and exclusions may apply. Talk to your agent to learn more.
Does renters insurance cover mold?
The short answer is it depends. Renters insurance policies may cover mold if the damage is due to another covered incident (such as a water leak). Any mold damage to floors or walls would be covered as part of your landlord’s policy; renters insurance will only cover damage to your personal property and may also provide additional living expenses if you have to vacate your home due to mold or other damages.
Does renters insurance cover bed bugs or other infestations?
No, renters insurance typically does not cover damage due to bed bugs or other pests. In most cases, it’s your landlord’s responsibility to address infestations and pay for extermination fees, but your renters policy won’t cover replacement costs for mattresses or any other damaged belongings.
Am I covered by my roommate’s renters insurance policy?
Some renters insurance policies cover roommates, but most don’t. And while it may seem practical to share a renters policy with your roommate, there are a couple of good reasons to have your own policy. For starters, renters insurance policies tend to be very affordable, so sharing the costs doesn’t save a ton of money over time. Plus, sharing a policy also means sharing insurance history with your roommate. If they file a claim on the policy, it’s marked on your insurance record, too—even if you were not involved in the accident. That claim could impact your future insurance quotes and premiums.
References
- Insurance Information Institute, 2016 Consumer Insurance Survey
- Insurance Information Institute, Renters Insurance
- Insurance Information Institute, Facts + Statistics: Renters Insurance
Coverages described herein may not be available in all states. Please contact a local independent Integrity agent for complete details on coverages and discounts. If the policy coverage descriptions herein conflict with the language in the policy, the language in the policy applies. The material provided above is for informational, educational, or suggestion purposes and does not imply coverage. WE RESERVE THE RIGHT TO REFUSE TO QUOTE ANY INDIVIDUAL PREMIUM RATE FOR THE INSURANCE HEREIN ADVERTISED. Integrity Insurance policies are underwritten by Integrity Insurance Company, an affiliate of Grange Insurance Company, and Integrity’s subsidiaries. Integrity companies not licensed in Pennsylvania. Not all Integrity companies are licensed in all states..