Whether you’re in a modern high-rise or a house in the suburbs, renters insurance can be critical after a disaster or robbery. A policy can pay to repair or replace your belongings and cover the expense of a hotel and food if you’re forced to relocate.
It also covers liability if someone is injured while in your home or if you damage their property.
While renters insurance isn’t required by any state law, a growing number of landlords are requiring tenants to purchase a policy as part of the terms of their lease. The landlord’s insurance, after all, only covers the physical structure of the building, not the tenants’ belongings.
The good news is, in comparison to homeowners insurance, renters insurance is still quite affordable.
Here’s how much renters insurance costs and how to get it at the best rate.
How much is renters insurance?
The average renters insurance policy costs about $14 per month (or $170 per year,) according to the Insurance Information Institute.
Not everyone pays the same price, of course. Your premiums are impacted by:
- Your ZIP code and state
- The type of property you’re renting and its square footage. (A single-family home will cost more to insure than a studio apartment, for example.)
- Your credit-based insurance score
- Any pets, and what kind
- The amount of coverage you’re getting and the value of your belongings
- Your deductible
- Your claims history
What does renters insurance cover?
Renters insurance protects you if something unexpected happens in your rented home. It pays to repair or replace belongings, including electronics, clothes and furniture.
Policies also include liability coverage, which covers legal fees and other costs if someone sues you for damages due to injuries suffered in your rental or damage you cause to their property.
Lastly, renters insurance pays for additional living expenses if you have to move while your home is being repaired. That can often include lodging, food, laundry and more.
Unlike homeowners insurance, renters insurance doesn’t cover the structure of your rented home — your landlord’s policy would cover that.
Renters insurance does have some limitations, however. While it would pay out in the event of a fire, theft or damage from a burst pipe, it doesn’t cover neglect, normal wear and tear, or pest damage.
And unless they’re listed on your policy, your roommate’s belongings are not covered by your policy.
How to get renters insurance
To get renters insurance, here are the steps you’ll want to follow:
- Make an inventory of your belongings: List all the things you’ll keep in your rental unit, including their values. Add up the values on this list to determine how much personal property coverage you need.
- Look at your net worth: Add up all assets you own (like retirement accounts, savings accounts and other financial assets). Then, subtract everything you owe, including student loans, car loans and credit card debt. This will help you determine how much liability coverage you need.
- Get several quotes: Provide information on yourself, including your date of birth, your rental unit’s address, and even your Social Security number. Choose the amount of coverage you need based on the calculations you’ve made above. Repeat this with several companies you trust.
- Compare quotes: Choose the same coverage limits and deductibles with each brand, allowing you to compare the quotes you get side-by-side. With the same coverage, you can look for the lowest premium to find the best premium for you.
- Buy a policy: Once you’ve chosen the policy you want, follow the steps to buy it. You’ll need to pay for the policy — many brands allow you to either pay with a credit card or a bank ACH transfer. Keep in mind that you might get a discount or avoid fees if you pay for the whole year rather than month-to-month.
- Save your documents: Once you pay for the policy, you’ll receive some documents on the policy. Download or save these for your records. Forward a copy to your landlord if they’ve asked for it.
How to save on renters insurance
To get the best price on renters insurance, take the following steps:
Bundle with your auto insurance. If you also own a car, getting your auto insurance and renters insurance from the same company can make both policies cheaper.
Choose a higher deductible. The higher your deductible, the lower your premium. Choosing a higher amount could help you pay less each month for coverage.
Raise your credit score. Like many other types of insurance, your credit score can be a part of your insurance score in most states. Give your credit score a boost by paying bills on time, paying off debt or adding your rent to your credit report, and enjoy lower insurance premiums.
Comparison shop. Not all companies consider your information the same way. Comparison shopping can help you find the lowest price for your unique situation.
Renters insurance FAQs
Do I have to have renters insurance?
While renters insurance isn’t required by law in any part of the U.S., it can be required by your lease or landlord. Even if your landlord doesn’t require it, though, it could be a good idea to have, as you’d be on your own to replace your belongings after a fire, theft or other event without it.
Does renters insurance cover bed bugs?
Renters insurance doesn’t typically cover bed bug infestations.
Does renters insurance cover belongings lost or stolen outside my home?
Renters insurance can cover items that are stolen even outside your home. This can apply to items stolen from inside a car or stolen while abroad on vacation. However, renters insurance doesn’t cover items that are simply lost — you’ll usually need to provide a police report on the event when you file a claim.
How much is renters insurance?
The national average for a renters insurance policy is about $170 a year, or just over $14 a month. Your premiums will vary depending on where you live, the value of your belongings, your credit history and other factors.
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