Renters insurance helps protect your belongings like clothes, furniture, and electronics. A landlord’s insurance policy covers the building, but not your personal things. If you rent an apartment, condo, house, you need renters insurance. Beinsure Media has analyzed insurance coverage and policy costs in the U.S. and presents a full Guide to Renters Insurance.
Average renters insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy for a 30-year-old single female with good credit and no past claims.
In general, renters insurance can help pay for damages caused by things like fire, theft, and even some weather-related incidents. So, if you rent an apartment, condo, or home, you probably need renters insurance.
Renters insurance can also help pay legal fees if a visitor is injured at your rental. Keep in mind, renters insurance isn’t the same as home or landlord insurance. Those are designed for property owners and don’t give you the protection you need as a renter.
What is renters insurance?
Renters insurance covers your personal belongings in case of theft, fire and other disasters. It can also pay your legal expenses if someone sues you. Also known as tenants insurance or an HO-4 policy, renters insurance is similar to homeowners insurance but designed for people who don’t own their own place. Because it covers what’s inside your home only and not the structure, renters insurance is much cheaper than homeowners insurance.
How much renters insurance coverage do you need?
Renters typically underestimate the personal property value they need to cover. While it might result in a slightly higher monthly premium, you should be honest with yourself regarding the value of your possessions and what they would cost to replace (see US Property & Casualty Insurance: P&C Insurance Pricing Trends).
When selecting an insurance policy and deciding on coverage, you should be sure to ask if the personal property coverage is ACV (actual cost value) or RCV (replacement cost value).
Actual cash value policies reimburse you for the amount that your property is worth. In contrast, replacement cost value policies reimburse you for the cost of replacing your property, even if that cost is greater than the actual value of your item (see TOP 50 Property & Casualty Insurance Companies in U.S.).
The America’s 10 Largest P&C insurance companies command almost half (47%) of the market, with the top 25 insurers accounting for two-thirds of the overall share. Direct written premiums (DWP) from these insurance providers reached almost $517 bn at the end of last year, while earned premiums slightly exceeded $488 bn.
In some cases, you’ll need to purchase additional coverage for high-ticket items like expensive jewelry. Most renters insurance policies allow you to add additional coverage if you need it.
How does renters insurance work?
A standard renters insurance policy has four types of coverage, each designed to pay for different expenses. One type of coverage would pay out if your belongings were destroyed in a fire, for example, while another type would cover your legal expenses if someone sued you.
Each section of your policy will pay only up to the limit of that coverage. The higher the limits you select, the more expensive your policy will be. But a policy with higher limits will offer more financial protection.
Depending on your carrier, you may be able to do this online, through an app or by phone.
According to Global Commercial P&C Insurance Market Review, US insurers must step up to fulfill the societal desire for resilience in a volatile world by closing protection gaps—or risk losing relevance. Insurance premiums have been propelled by extensive year-on-year risk-adjusted rate hardening: the annual premium growth rate for commercial P&C lines has hovered at 6 to 8% since 2018, and combined ratios have been improving.
What is typically covered by renters insurance?
Renters insurance covers personal property, personal liability, medical payments and additional living expenses or loss of use, up to the limits of your policy. Learn more about what renters insurance covers and the types of renters insurance coverages.
- A renters policy covers your belongings if they’re stolen or destroyed. It also pays out if you cause harm to other people or their property.
- Renters insurance covers disasters such as fire, theft and windstorms but generally doesn’t cover flooding or earthquakes.
- You can often add extra renters insurance coverage for things like identity theft and valuable jewelry.
4 coverage types in renters insurance policies
- Personal property coverage
- Loss of use coverage
- Personal liability coverage
- Medical payments coverage
What is personal property insurance?
Personal property insurance is the part of a homeowners, renters or condo policy that pays to replace your belongings if they’re stolen or destroyed.
This includes just about everything you own, such as: Appliances (unless you’re a renter and your landlord owns them), Books and music, Cell phones, tablets and laptops, Clothes and shoes, Dishes and kitchen gadgets, Furniture, Jewelry, Sporting equipment, TVs.
Replacement coverage can be expensive, but actual cash value coverage can fall short in the event you wind up using it.
You’ll want to figure out the minimum replacement cost as well as the actual cash value of your personal property to determine the right level of coverage.
Start by documenting your belongings by making a list of all the possessions in your rental. You can also take photos or videos that you store somewhere other than your apartment or in the cloud so you’ll have them even in the event of a disaster. These records will also help you in case you ever need to file a claim with your renters insurance.
Keep careful records of items that are important to you like jewelry or electronics. When possible, record the date you purchased the item, its model and serial numbers.
Consider adding extra coverage for jewelry or antiques if it’s available. If the jewelry or antiques have appraisal documents, keep those secure and maintain digital copies.
From your list, add up the replacement cost and the actual cash value (considering depreciation) of your depreciated items. This can help you decide how much renters insurance you need based on the value of your personal property.
What does personal property insurance cover?
Personal property insurance covers your belongings if they’re stolen or if they’re damaged or destroyed in a covered event, such as a fire. Events that cause damage are known as “perils” in the insurance industry.
In most cases, your belongings are covered on a “named perils” basis, which means coverage applies only for events that are specifically listed in your policy. If an event isn’t named, it’s not covered.
Some policies have more generous personal property coverage, known as “open perils” or “all risks” coverage. That means that if a peril isn’t specifically excluded in your policy, it’s covered.
Many policies cover your belongings anywhere in the world, not just when they’re in your home. So if your suitcase is stolen at the airport or a storage unit burns down with your belongings inside, you’ll likely have some coverage — typically 10% of your total personal property limit.
What isn’t covered by personal property insurance?
Personal property insurance generally won’t pay for damage from floods or earthquakes unless you purchase extra coverage for those disasters. If you accidentally leave your phone in a cab or drop your ring down the kitchen sink, those incidents probably won’t be covered either.
A few other perils that are typically excluded: Acts of war, Neglect, Nuclear hazards and Intentional damage to your own property.
Renters policies typically cap the amount they’ll pay for valuable items such as jewelry, firearms and electronics, particularly when it comes to theft. To get coverage for items that are worth more than this limit, you may want to add a scheduled personal property endorsement.
How to make a personal property claim?
First, consider whether it’s worth making a claim at all. If you do decide to file a claim, do so as soon as possible after the incident. Depending on your insurer, you may be able to file online, through an app or over the phone.
Be prepared to submit supporting documents, such as photos or video of the damage, an itemized list of what was lost or a police report in the case of theft.
Your insurance company may require you to prevent further damage. For example, if a storm blew off part of your roof, you should put a tarp over the hole to keep rain from damaging furniture and other items in the affected area. If you buy supplies for this type of mitigation, keep your receipts.
Your insurer will evaluate your claim and may send an adjuster out to your property to examine the damage. If the claim is approved, your deductible will be subtracted from any payout.
What is loss of use coverage?
Loss of use coverage offers financial support if you’re unable to live in your home for a covered reason. It’s a standard part of most homeowners, renters, condo and mobile home policies. It generally includes three parts:
Additional living expenses
Additional living expenses coverage pays for hotel stays and other costs if your home becomes uninhabitable for a covered reason, such as a fire. Depending on your policy limits, this coverage can pay out until your home is fully repaired or you permanently relocate. Because additional living expenses coverage is the best-known part of loss of use coverage, the terms are sometimes used interchangeably.
Fair rental value
You and your family might not be the only ones affected by damage to your home. If you rent out part of your space, your tenant might also have to move out during repairs, which could mean less rental income for you. Loss of use coverage can help you recoup that amount.
Loss of use coverage can help if your home isn’t accessible, even if it’s not actually damaged. For instance, it could pay for a hotel if police have blocked off your street due to downed power lines, or if your city won’t let evacuees return after a hurricane until the worst local damage has been addressed.
For renters and condo owners, the loss of use limit may be tied to their personal property limit instead.
Some insurers also restrict how much time you can rely on loss of use coverage. For example, your additional living expenses may be covered only for up to 12 or 24 months, depending on your policy.
What does loss of use cover?
Loss of use insurance typically covers: Hotel stays, Apartment or house rentals, Restaurant meals, Groceries, Pet boarding, Transportation or parking costs, Laundry expenses, Moving and storage costs.
Be sure to keep all your receipts, as insurance companies often reimburse you after the fact rather than paying upfront.
What’s loss of use not covered?
Loss of use coverage pays out only when the reason you’re living elsewhere is covered by your policy.
Homeowners and renters insurance generally don’t cover flood damage. So if your first floor is under 3 inches of water but you don’t have flood insurance, your carrier won’t pay for you to stay somewhere else.
Similarly, if you’re renting an apartment while remodeling your kitchen, your insurance company won’t pay additional living expenses because your policy doesn’t cover home improvements.
What is personal liability renters insurance?
Renters liability insurance is the part of a renters policy that covers you if you cause injuries to other people or damage to their property. (You may see it called “personal liability” in your policy documents.) Here’s how it works:
You’re playing softball in the yard behind your rental house, and your 12-year-old daughter hits a home run right through your neighbor’s kitchen window. If your neighbor files a claim against you, your liability coverage could pay for things like repairing the broken window and treating any injuries, up to your coverage limit. It also might pay your legal fees if your neighbor decides to sue you.
While you usually have to pay a deductible before your personal property coverage comes into effect, there’s generally no deductible on liability claims.
If you’re not interested in a standard renters policy, you may be able to purchase liability coverage on its own. For example, Assurant offers a liability-only policy to tenants living in the company’s partner properties across the U.S. It won’t cover your personal belongings as a renters policy would, but it will cover your liability if you cause a fire or other accident, or your dog bites a guest.
What renters liability insurance covers?
The key thing to remember about personal liability insurance is that it covers other people and their belongings — not you and yours.
If your dog bites someone outside your household, your liability insurance will likely pay for their injuries, as long as your insurer doesn’t exclude that breed. If your dog bites you, though, you’ll have to turn to your own health insurance for coverage.
- Falls and injuries in your home.
- Damage that originates in your home and affects others’ property.
- Damage to other people’s property for which you’re responsible.
- Liability related to social events you host.
What does personal liability insurance not cover?
Like any other type of insurance, renters liability coverage has limitations. Here are a few scenarios that personal liability insurance won’t cover, and which alternative types of insurance could help instead:
- Injuries in common areas.
- Car accidents.
- Damage to your belongings.
- Business liability.
- Intentional acts.
What is medical payments coverage?
Medical payments coverage helps cover medical bills if someone who doesn’t live with you is injured on your property. It also pays if you, a family member or a pet injures someone away from your home. It’s also known as MedPay, Coverage F and “good neighbor” coverage.
A key feature of medical payments coverage is that it applies regardless of who’s at fault. If your friend falls down your stairs while texting on their phone or your dog bites a stranger at the park, you’re still covered.
Medical payments coverage typically limits the amount of money it will pay out per person, per incident. This limit is usually from $1,000 to $5,000, which can be useful for smaller injuries. Higher limits may be available depending on your insurer.
What does medical payments coverage exclude?
Medical payments coverage for homeowners doesn’t apply in all situations involving an injury.
Here are some examples of what’s not included:
- Injuries that happen to you or anyone who lives in your household.
- Lawsuits or legal fees associated with an injury.
- Property damage.
- Intentional injuries that result from a fight or intended physical force.
- Injuries related to any business conducted on your property.
- Injuries resulting from war, terrorism or nuclear hazards.
Medical payments coverage and personal liability coverage are both essential parts of your home insurance policy. However, they serve different purposes, and it’s important to understand the distinction.
Like medical payments coverage, personal liability coverage helps pay for medical expenses if someone is injured on your property. It may also apply if you, a family member or a pet injures someone away from your home.
How much does renters insurance cost?
According to the Independent Insurance Agents and Brokers of America, the average renters insurance cost is about $14 a month, or $168 per year, for $30,000 of personal property coverage and $100,000 of liability coverage, with a $2,000 deductible, based on analysis of the best renters insurance companies.
Most insurance companies offer a discount if you bundle your auto and renters insurance policies. They might also reduce your rate if your apartment has a security system, smoke detectors or deadbolt locks.
If you’re looking for more ways to save money, consider raising your deductible. The higher your deductible, the cheaper your premium.
When deciding on a deductible amount, ask yourself: How much can you pay out of pocket if something went wrong? Note that you’ll pay the deductible each time you file a claim for personal items. Your rate is likely to increase after each claim, so weigh carefully whether to file one for an amount close to the deductible.
Make sure you enter the same limits for each type of coverage when shopping for renters insurance quotes to get a direct comparison.
Then, look at each company’s additional coverage options, which may cost extra. Do you need more insurance for a pricey musical instrument, or would you like to add identity fraud protection? Each insurer has slightly different options, and some are even included in your base premium, so it’s worth shopping around.
Cost of renters insurance by coverage amount
One of the main factors in the cost of renters insurance is your personal property value, which determines what coverage amount you’ll need.
Renters insurance increases in price as your coverage amount increases, so you’ll likely end up paying more if you have many valuable possessions.
The average annual national rate for renters insurance ranges from $14 per month for $20,000 worth of personal property coverage to $35 for $100,000 of coverage. To determine how much coverage you need, create an inventory of your personal belongings.
|Personal Property Coverage Limit||Average Monthly Rate|
Renters insurance average cost by company
Beinsure Media undertook a comprehensive analysis to determine which companies have the lowest average costs across all 50 states for $20,000 worth of personal property coverage.
Average cost of renters insurance in the U.S.
How to save money on renters insurance?
Although renters insurance premiums are generally affordable, there are several ways to reduce the price you pay for coverage. Here are our top tips for getting cheap renters insurance:
- Increase your deductible: Your deductible is the amount you pay in the event of a covered loss before your insurance coverage starts. The higher your deductible, the cheaper your renters insurance rate will be. Likewise, lower deductibles will increase your premium but minimize out-of-pocket expenses in the event of an insurance claim. But it’s important to be mindful of how much you increase your deductible so you don’t leave yourself exposed in the event of a loss.
- Bundle policies: Multi-policy discounts reward policyholders when they take out more than one line of insurance with the same provider. It is common to offer savings when bundling property insurance with auto insurance but check with your insurer as other lines of insurance may qualify.
- Seek out discounts: Providers often offer a variety of discounts beyond bundling policies. For example, your provider might drop your premiums for installing safety devices like smoke detectors or burglar alarms, remaining claims-free, agreeing to specified payment methods or having a parent with a policy. Discount eligibility and savings generally depend on your policy details; contact your provider or agent to learn more.
- Find a cheaper provider: When shopping around, you’ll find that some providers offer cheaper renters insurance coverage. If you understand why a policy costs less and are comfortable with its compromises, switching providers can be a great way to save money.
Top 20 cheapest U.S. city for renters insurance
|State||City||Average Annual Premium|
|8||South Dakota||Lake Andes||$110|
|10||South Dakota||Sioux Falls||$111|
|18||South Dakota||Rapid City||$118|
Top 20 most expensive U.S. city for renters insurance
|State||City||Average Annual Premium|
The cost of renters insurance by State / City in the U.S.
|State||City||Average Annual Premium|
|District of Columbia||Washington||$215|
|New Jersey||Jersey City||$182|
|New Mexico||Las Cruces||$164|
|New Mexico||Santa Fe||$168|
|New York||New York||$214|
|South Carolina||North Charleston||$224|
|South Dakota||Sioux Falls||$111|
|South Dakota||Rapid City||$118|
|South Dakota||Lake Andes||$110|
|Utah||Salt Lake City||$149|
|Utah||West Valley City||$146|
Average renters insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy for a 30-year-old single female with good credit and no past claims. Rates are for policies with $15,000, $30,000 or $50,000 in personal property coverage, liability coverage of $100,000 and a $2,000 deductible.
How to get a renters insurance estimate
To get the right coverage at the best price, prepare before you buy with the following steps:
- Create an inventory of your personal items. List the items and their purchase price. While big-ticket items are important to note, don’t forget things like linens, dishes, and clothing; the cost to replace them can really add up. This total is what you need for personal property coverage.
- Choose replacement cost coverage. Standard policies include actual cash value (depreciated) coverage, but the upgrade to replacement cost is worth it. Replacement cost coverage policies cover the actual cost of replacing your possessions rather than a depreciated value. That means your 10-year-old TV is insured at the cost of buying a brand-new TV today.
- Choose a deductible. Deductibles usually range from $500 to $2,500. This is the amount you pay out before your policy kicks in to pay for the repair or replacement of your belongings. The higher your deductible is, the lower your rate will be, but the trade-off is that you have to pay that amount when you file a claim before your policy pays out. For most tenants, a $500 or $1,000 deductible on apartment rental insurance is recommended.
- Decide how much liability insurance you want. Liability insurance protects you if you’re liable for injuries or damages and will even provide legal assistance if you’re sued. $100,000 is the common choice for renters insurance, but it costs very little to triple the protection to $300,000.
- Compare quotes. Make sure to compare renters insurance quotes from several companies. Use the same coverage levels for every quote so you can be sure to compare renters insurance rates on an apples-to-apples basis. Remember to check company ratings – the cheapest isn’t always the best.
The main things that affect the cost of renters insurance are:
- Where you live. Some areas have higher rates due to weather or crime rates.
- Coverage level. The amount of coverage you buy will affect what you pay.
- Your deductible. The higher your deductible, the lower your rate will be.
- Riders and endorsements. Some personal property, like jewelry or art, requires a rider that increases your renters insurance premium.
- Your insurance company. Rates can vary a lot by company, so it pays to shop around.
- Your credit history. Insurance companies also take into account your credit history, and it can affect how much you pay.
Is renters insurance required by law?
No, but some landlords require proof of renters insurance before you sign a lease, or within a certain time period. Usually, though, it’s your call.
If your worldly possessions amount to a futon, a coffee maker and a toothbrush, you probably don’t need renters insurance.
But for most renters, it can be a smart (and surprisingly affordable) investment. Having renters insurance could prevent you from paying out of pocket to replace everything that could be damaged or stolen: jewelry, TV, computer, furniture, clothing and so on.
A landlord’s insurance policy won’t pay your living expenses while the building is under repair, but renters insurance generally does.
Most renters policies offer liability coverage limits ranging from $100,000 to $500,000.
If you’re not sure how much to choose, a good guideline is to add up the value of your assets, including your car, bank accounts and retirement savings. By selecting at least enough liability insurance to cover that amount, you’ll reduce the chances of a lawsuit wiping out everything you own.