Quick answer: Renters insurance (HO-4) protects your personal belongings, your personal liability if someone is injured or you damage someone else’s property, and additional living expenses if your rental becomes unliveable. In the US it typically costs around $15 to $30 per month. Your landlord’s insurance covers the building, not your things.
Key Takeaways
- Landlord insurance does not cover tenants’ belongings or liability.
- Many landlords now require tenants to carry renters insurance.
- Choose replacement cost coverage instead of actual cash value.
- Floods and earthquakes are not covered by standard policies.
- In the UK, the equivalent is tenants’ contents insurance.
What Renters Insurance Covers
| Coverage | What It Pays For | Common Limit |
|---|---|---|
| Personal property | Furniture, electronics, clothes, appliances you own, even when away from home | $20,000 to $50,000 |
| Personal liability | Injuries to guests, damage you cause to others’ property, legal costs | $100,000 to $300,000 |
| Loss of use | Hotel, meals and extra costs if your home is unliveable after a covered loss | Often 20% to 30% of property limit |
| Medical payments | Small medical bills for injured guests | $1,000 to $5,000 |
Covered Events
Typical covered perils include fire and smoke, theft, vandalism, windstorm and hail, lightning, explosion, water damage from burst pipes or appliances, and damage from falling objects.
What Renters Insurance Does Not Cover
- Floods and earthquakes
- Pest damage, such as bed bugs or rodents
- Your roommate’s belongings, unless they are named on the policy
- High-value items above sub-limits, such as jewellery, unless you add a rider
- Damage to the building itself (the landlord’s insurance covers this)
Replacement Cost vs Actual Cash Value
An actual cash value policy pays what your items are worth today after depreciation. A five-year-old laptop might be worth very little. A replacement cost policy pays to buy a new, similar item. The premium difference is usually small, so replacement cost is almost always the better value.
How Much Renters Insurance Do You Need?
- Make a home inventory: walk through each room and record items with photos or video.
- Add up the replacement values: most people underestimate this. Clothes, kitchen items and electronics add up fast.
- Choose liability cover: at least $100,000; $300,000 is safer if you have savings.
- Pick a deductible you can easily pay, such as $500 or $1,000.
How to Save on Renters Insurance
- Bundle with car insurance for a multi-policy discount.
- Install smoke detectors and security devices.
- Choose a higher deductible.
- Pay annually.
- Compare at least three quotes.
How to File a Renters Insurance Claim
- Make sure everyone is safe and contact emergency services if needed.
- File a police report for theft or vandalism.
- Take photos of the damage.
- Contact your insurer quickly and share your home inventory and receipts.
- Keep receipts for hotel and meal costs if you must move out temporarily.
Bottom Line
For about the price of a couple of coffees a week, renters insurance protects everything you own and shields you from liability lawsuits. If you rent, it is one of the most affordable and useful policies you can buy.
This article is for general information only. Coverage and prices vary by insurer and location.
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Frequently Asked Questions
What does renters insurance cover?
It covers your personal belongings, personal liability, additional living expenses if your home becomes unliveable, and small medical payments for injured guests.
Does my landlord’s insurance cover my belongings?
No. Landlord insurance covers the building and the landlord’s liability. Tenants need their own renters insurance for their belongings and liability.
How much does renters insurance cost?
In the US it typically costs around $15 to $30 per month, depending on your location, coverage limits and deductible.
Does renters insurance cover theft outside my home?
Yes. Most policies cover your belongings against theft anywhere in the world, such as from your car or while travelling, subject to limits.
Does renters insurance cover floods?
No. Floods are excluded from standard renters policies and require separate flood insurance.