Home > Renters Insurance > Do You Need Renters Insurance?

Do You Need Renters Insurance?

Updated Dec 13, 2022

Updated Dec 13, 2022

Home > Renters Insurance > Do You Need Renters Insurance?

Most people have insurance to protect themselves from life’s unexpected events. Whether it’s a health insurance policy to cover you in the event of an injury or auto insurance in case of an accident, insurance protects us from the potentially devastating consequences of unforeseen circumstances. Renters insurance is no different.

One-third of U.S. households call a rental property home, and if you’re among that group, protecting yourself and your personal belongings from the unexpected is important. A form of property insurance, renters insurance is an affordable solution for those looking to cover their homes. Read through our renters insurance guide to learn whether you need to enroll in a policy.

Is Renters Insurance Required?

couple in their new rental home
Image Source: Canva

In short, no. You only need a renters insurance policy if your building, property management company, or landlord requires renters insurance. In some instances, landlords may require tenants to get renters insurance to protect themselves from potential liability costs or personal property damages. 

While your landlord may have an insurance policy to protect the building you live in, if there is a fire, theft, or catastrophe, this policy won’t cover loss of use expenses or the replacement cost of your possessions. The only way to protect yourself from disasters financially is to enroll in a renters insurance policy.

How Much Does It Cost?

Renters insurance is one of the more affordable property insurances available. Insurance premiums will vary depending on the provider, the state you live in, and other factors. 

What Does Renters Insurance Cover?

Renters insurance, or tenant insurance, is generally offered as a policy with three basic types of protection. These protections include the following:

  • Additional living expenses
  • Liability
  • Personal possessions

We’ve detailed each of these types of coverage below.

Additional Living Expenses

Also known as ALE, additional living expenses coverage is included in a renters insurance policy. ALE is considered a loss of use coverage. It covers any temporary rentals, hotel bills, restaurant bills, or other expenses you may incur if your home is affected by a disaster and you need to live elsewhere.


Standard renters coverage provides liability protection against lawsuits for any property damage or bodily injury that you, your family members, or your pets may cause to other people. For example, if your dog bites someone, your insurance will cover the medical payments. Personal liability coverage also includes no-fault medical coverage. If a neighbor or friend is injured in your home, you can submit their medical bills to your insurance company.

Personal Possessions

While your contract will outline the specifics, a standard renters insurance policy protects your personal belongings from damage. Creating an inventory of your possessions before you enroll and staying up-to-date on the inventory is the best way to ensure that your possessions are a covered loss. This will make filing a claim easier and faster.

What Does Renters Insurance Exclude?

While there are many things that a renters insurance policy covers, it’s important to understand what’s not. Most notably, renters insurance does not include coverage for major weather events like flooding. If you have a roommate, their personal property is not covered unless their name is listed on the policy. We’ve listed some other major events below that renters insurance doesn’t cover.

  • Bed bugs and other pest infestations
  • Damage to a car
  • Damage to a roommate’s possessions
  • Earthquakes
  • Floods
  • Sinkholes
  • Theft of a car
  • Theft of a roommate’s possessions

Companies also include policy add-ons to bolster their standard policies. For example, if you live in an area prone to flooding, you may want to purchase additional flood insurance. Most insurance agents can walk you through additional coverage options if you’re worried about a particular exclusion.

Common Misconceptions About Renters Insurance

What follows are some of the most common misconceptions about renters insurance that can prevent someone from enrolling in a policy.

Renters insurance costs a lot.

While renters insurance is an additional monthly cost, it’s relatively inexpensive. The average national cost is $174 annually or about $15 monthly.

Your landlord’s insurance covers personal property.

Insurance for personal property, liability, and expenses related to loss of use is the renter’s sole responsibility. Generally, a landlord’s policy only covers the building or unit you live in.

Liability coverage is excessive.

You shouldn’t rule out accidents as a possibility. Even if you rarely have guests, there is always a chance something could happen, and it’s best to be covered. If someone slips on your stairs, liability coverage in a standard renters policy will help cover any expenses.

You only need renters insurance if your possessions are extremely valuable.

If you add up all of your possessions, they’re probably worth more than you think, even if they aren’t individually valuable. If you own nothing and have no personal property, the other benefits of renters insurance are worth getting coverage.

How Much Coverage Should You Get?

man and woman going over renters insurance policy
Image Source: Canva

The two most important things to consider when deciding how much renters insurance coverage to get are personal property value and liability coverage. Getting enough personal property coverage to cover the value of your belongings is a good idea. We also recommend getting coverage with a liability limit of at least $100,000 — this should be a good amount to cover or largely offset costs if an accident occurs.

Final Thoughts

Though a renters insurance policy will be an additional monthly expense, the peace of mind it provides is invaluable. Many policies are available at a minimal expense and offer valuable protection.

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