I started Insurance Blog by Chris™ because I have a passion for insurance. Here at the blog, our job is to educate and inform people about the best insurance for them. Since then, we have grown into national brands with a large team of researchers helping people understand all forms of insurance.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu...

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Reviewed by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

UPDATED: Jun 8, 2022

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Many people seem to think that renters insurance is required, though on its own, renters insurance is not legally required, though it may be part of the terms of a lease.

Even if it is not required by your lease, there are many valid reasons to purchase renters insurance.

Renters insurance is optional, and it can be a hassle to change policies if you move a lot, but the options available are generally so affordable, and the coverage so wide-ranging, that this type of policy could be a very wise and responsible choice.

What Does Renters Insurance Cover?

Here is what renters insurance covers:

  • Personal Possessions of the Policyholder
  • The Policyholder’s Liability for Injury or Property Damage to Others
  • Medical Expenses to Others, Regardless of Fault
  • Additional living expenses incurred after the rental unit is damaged, forcing the policyholder to live elsewhere temporarily

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Types of Renters Insurance

  1. Personal Possessions
  2. Liability
  3. Additional Living Expenses

Personal Possessions

There are two types of coverage for personal possessions:

  1. Actual Cash Value
  2. Replacement Value

Actual Cash Value: The actual cash value of an item is the current value of the item itself, including depreciation due to wear and tear over time.

Replacement Value: The replacement value of the item is how much you would spend if you had to replace it, which can be substantially higher, since many items that people use regularly don’t have great resale value. They’d typically only be purchased new and unused.


In addition to insuring your personal possessions, renters insurance covers the policyholder against liability for injury or property damage sustained by others.

This could include structural damage to an apartment building where the renter is liable for damages. Though the landlord’s insurance will likely payout for damages first, they might recruit additional expenses from you.

Often, some amount of no-fault medical coverage is included in renters insurance policies as well. This means that if a guest is injured in the policyholder’s home, the renters insurance policy may cover some of their medical expenses, regardless of fault.

Additional Living Expenses

A major benefit of renters insurance policies is coverage for additional living expenses.

If damages are sustained to your rental that requires you to find temporary housing elsewhere while repairs are completed, your insurance company could compensate you for the amount you spent in excess of your regular monthly costs.

This can include hotel bills and meals. One common misconception is that a renter’s landlord will help cover these costs. That is typically not the case.

What Is Not Covered Under Renters Insurance?

Even if an entire rental building is filled with only safe and careful tenants, there’s never a guarantee against catastrophic storms, tornadoes, or other natural disasters.

If you have renters insurance, particularly a policy that pays out the replacement value of your possessions, then you won’t be left scrambling to start over from scratch if your home is destroyed.

If you opted for a policy that pays out the actual cash value of your possessions, you’ll still have quite an advantage compared to being uninsured.

Earthquakes and Flooding

But, not all types of natural disasters are covered by standard renters insurance policies. In fact, two of the most common issues people might face, earthquakes and flooding, require separate policies entirely.

Secondly, tenants in certain locations might have a harder time getting insurance, or they may face higher premiums, particularly those who live on the coast and in areas prone to wind or water damage from hurricanes.

For those who need it, separate earthquake and flooding policies can be very beneficial, and for people who live in areas more prone to disasters, the extra cost is likely a small price to pay for the elevated risk you experience due to your location.

Is Renters Insurance Worth It?

Looking at it from a black and white perspective, yes, renters insurance is worth it, and here is an example why:

Let’s say there’s a fire in a renter’s apartment. The flames, combined with smoke damage, destroy almost all of the renter’s belongings.

Additionally, the apartment needs repairs, so they’ll have to find a new place to live for the next month, until they can occupy the unit again.

The renter also discovers that they’re found liable for starting the accidental fire, which damaged the building and their next-door neighbor’s property, and resulted in a hospital trip for their neighbor.

Without renters insurance, all of this could fall on the renter, who might be forced to pay all of these expenses out of pocket.

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Renters Insurance FAQ

Does Renters Insurance Cover Theft?

Yes, renters insurance covers theft, after you meet your deductible amount.

Theft is a more likely scenario than the kind of fire described above, and renters generally have a higher risk of theft than homeowners. So, even though you might think renters insurance could be beneficial in this regard, it might not be.

For instance, if you face a burglary or other kind of theft that’s relatively minor in scale, like a stolen laptop or portable stereo, you’ll likely have to pay less than your deductible to replace that item. In that situation, your renter’s insurance won’t help you out.

Additionally, you’ll have to purchase separate floaters for individual items, which will increase the cost of your premium.

Does Each Roommate Need Renters Insurance?

Some things inside your rental unit might not be part of your policy. For instance, if you have a roommate, their possessions would not be covered by your policy, and there might be restrictions for buying renters insurance jointly with a roommate or unmarried domestic partner, depending on the policy.

Does Renters Insurance Cover Dog Damage?

Some dog breeds that are deemed to be aggressive are also excluded from coverage in renters insurance. Check with each company for your dog breeds classification.

Does Renters Insurance Cover Car Theft?

Since renters insurance covers almost all your possessions, inside your home and outside of it, you might be surprised to learn that it doesn’t cover what’s likely the most expensive item you own.

Cars are covered separately by your auto insurance. They’re exposed to far more risk than most any other item you could own, and certain types of auto insurance are already required by law for all drivers.

How To Get Renters Insurance

To get renters insurance, the very first thing you should do is create an accurate home inventory. Take stock of all your possessions and their value to determine how much coverage you need. Use this inventory to figure out if you need to add any floaters to your policy.

Then decide how much you’re willing to pay for your deductible. You should be able to comfortably pay this much in the event of an emergency. If you can afford a higher deductible, you can get a less expensive policy.

Next, if you already have auto insurance, see how much it would cost to add a renters policy. This is usually a good way to get a new policy on favorable terms, and since you’re already a customer, it’s a good bet that you’ll like their customer service. For most companies as well, when you bundle your auto and home insurance, you will get discounts.

Once you get quotes, either from an insurance company where you already have a policy, from a trusted agent, or directly from a new company, inquire about discounts.

If it makes sense, do what you can to get those discounts before you apply. You might have to install security systems or add deadbolts, but the cost could be offset by the decrease in your premiums, and your home will be more secure as a result.