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RENTERS Insurance
RENTERS INSURANCE INSIGHTS

Will renters insurance cover my laptop in my car? How much will renters insurance cost? Can I get a discount? Your questions answered.

Nobody likes to spend extra money unnecessarily. So, it’s natural to ask yourself, “What is renters coverage – and why do I need it?”

In truth, most of the time, you don’t need it. It’s only important when something terrible happens. Unfortunately, bad things are part of life. But the good news is that renters insurance can protect you and your belongings if the unthinkable – or even something less dramatic but still costly -- occurs. 

Many tenants assume a landlord's insurance policy will cover the renter’s belongings after a catastrophe, but that's incorrect. That is why you need tenant insurance. So, what does renters insurance cover? Typically, not only your belongings but your liability in many situations. Plus, it provides things like living expenses if you're homeless after a fire.

If you're a renter, it is time to get renters insurance if you haven't already.

Enter your ZIP code in the calculator below to see carriers that offer rental insurance and bundling in your area.

Here are some common questions about tenant insurance:

What is renters insurance?

It helps to get a thumbnail sketch of what this type of policy is all about, for starters.

Renters insurance is a policy that covers you if your personal property is damaged while you are a tenant. Perhaps more importantly, it also protects you from liability damages, which are damages to another party.

For example, if someone slips and falls in your apartment or your dog bites him or her, that person could sue you for damages. Renters liability insurance would pay for the legal costs to defend yourself and any settlement or judgment costs should you lose the case.

Renters insurance – sometimes known as HO-4 - is easy to get, as many insurance companies sell this type of policy. It is also relatively affordable in most cases.

What does renters insurance cover?

Renters insurance offers three primary coverages:

Personal property coverage

Personal liability is the part of a tenant policy covering your belongings from loss or destruction.

The National Association of Insurance Commissioners notes that renters insurance is available in two types: the broad and comprehensive forms.

The broad form protects your personal belongings against specific events. You might wonder, does a renters insurance policy cover fire damage? The answer is “yes” – under the broad form coverage.

According to the NAIC, the types of events covered under this type of HO-4 policy include:

  • Fire
  • Lightning
  • Explosion
  • Smoke
  • Vandalism
  • Theft
  • Water-related damage from property utilities

The broad form is the most commonly purchased type and covers 16 perils.

By contrast, the comprehensive form covers you in the wake of any event that is not specifically excluded by the policy. Because this type of coverage is more sweeping than the coverage in a broad form policy, comprehensive form insurance typically costs more.

In some cases, renters may own costly possessions, such as fine art or jewelry. You would need to purchase an endorsement or rider to your renter's insurance to make sure these items are covered in such cases.

Tenant insurance covers your personal property even if it's in transit, like in a moving van, or just parked outside the gym.

The catch is that the limit for loss outside the home is typically 10% of the total personal property limit. So, if you have $2,500 in coverage, you'll only be reimbursed up to $250 for items stolen from your car.

That still beats what your auto insurer would pay: nothing. Car insurance covers only vehicle components -- a built-in GPS or CD player --, not a bike or laptop you've put inside.

Additional living expenses coverage

Many policies will also cover additional living expenses (ALE). That means that your policy will provide you with the funds to live day to day if your apartment is damaged or destroyed and is at least temporarily inhabitable. 

"Additional living expense on an HO-4 would cover costs associated with hotels, meals, laundry, and other expenses that the tenant incurred while their apartment was being repaired. says Travis Biggert, chief sales officer with Hub International, an insurance brokerage.

He adds that ALE coverage could also cover costs associated with moving should the apartment not be habitable for an extended period.

These policies typically reimburse you for the difference between your ALE's and your normal living expenses.

Personal liability coverage

Personal liability insurance for renters covers the damages you cause to other people and their property. For example, if someone is injured while visiting your apartment or your dog chews up someone's handbag, liability coverage would pick up the tab to reimburse you for any damages you owe.

The financial ramifications of a lawsuit by an injured party can be devastating. Luckily, the liability portion of your policy will protect you (and your assets) from bodily injury and property damage claims, as well as damages you or your family members accidentally do to others.

It's up to you to choose your liability limit on your policy. Liability limits for renters usually start at about $100,000 and can go up to $500,000. Experts recommend at least $300,000 in liability coverage. If you have many assets, you may want to buy an additional umbrella policy of at least $1 million. 

It's important to stress that liability coverage protects you for damages you cause to others or their property. It does not cover your property.

The liability portion of your insurance policy also offers no-fault medical coverage. This coverage kicks in if someone is hurt in the place you rent and needs medical care.

"If someone gets hurt in your home, he or she can submit medical bills directly to your insurance company,” says Angi Orbann, vice president of property, personal insurance property at Travelers. “This way, expenses can be paid without a liability claim being filed against the renter. It should be noted that this coverage does not pay the medical bills for the renter's own family."

Typically, coverage amounts are between $1,000 and $5,000, says the Insurance Information Institute. Again, this medical coverage applies to the treatments of others, not yourself.

Other considerations

It's important to remember that rental insurance never covers flooding or earthquake damage. You will be on the hook for the cost to replace all of your possessions if a flood or earthquake destroys them.

You will need a separate policy if you live in an area prone to flooding or earthquakes. Flood insurance is available from the National Flood Insurance Program , and earthquake coverage can usually be added as a rider to your policy. Or, you can purchase a separate earthquake policy.

What isn’t covered by renters insurance?

Does a renters insurance policy cover earthquakes? Will it cover me if my pitbull bites someone?

Probably not. There are plenty of things renters insurance won’t cover.  Most of these items usually aren’t covered by a standard policy, but you can almost always buy an endorsement to make sure they are covered. Typical exclusions include:

  • Roommates, unless they're named on the policy. Family and guests are covered, but people you're in a business relationship with -- someone who sublets, an Airbnb guest -- are not.
  • Expensive jewelry, antiques, collectibles, furs or other high-ticket items are likely to be subject to an individual limit. A few bucks more can buy you additional coverage.
  • Business equipment and inventory. Typically, you need a separate policy to cover most business expenses inside your home.
  • Certain dogs. Some insurers exclude entire breeds. Others may only include liability for a dog that's passed a behavioral test.
  • Floods, in most areas. Standard policies cover accidental water damage in the building -- a broken water line or overflowing tub -- but not the result of heavy rain and flooding. Check about buying a flood endorsement.
  • Criminal behavior. Although insurance covers negligent acts that may result in criminal fines, insurance does not cover intentional criminal acts.
  • Your medical bills. Renters insurance medical coverage does not insure your own injuries. Instead, liability protection pays other people's medical bills. Trip over your own rug, and it's your health insurance that'll pay to stitch up your head, not your renters insurance.
  • The difference between what your stuff was worth and the cost to buy a new version, unless you ponied up a bit extra for "replacement cost" insurance. Otherwise, you'll be reimbursed only for the depreciated "actual cost value" -- what that 10-year-old, used leather jacket would have fetched on the market today.
  • Back rent. You will not be reimbursed for any rent you may owe the landlord.

It is also important to remember that damages are not covered until you pay your deductible. When you buy rental insurance, you determine the deductible you are willing to pay -- $500 and $1,000 are common deductibles.

If you choose a $1,000 deductible and you suffer insured damages of $2,000, you will be on the hook out of pocket to pay the $1,000 before your insurance coverage kicks in.

Why would you take a higher deductible? Because doing so lowers your premium costs. If you go for an extended period without making an insurance claim, you can save a lot of money overall by raising your deductible and lowering your premium costs.

How does renters insurance work?

Once you suffer a loss, your insurance policy coverage will kick in. Here are some scenarios that show how renters insurance works.

Personal property

The apartment building where you rent catches fire, damaging your apartment and expensive computer equipment, furniture and other belongings. After you file a claim and the insurance company investigates and approves it, renters insurance will reimburse you for the damages, minus any deductible.

You will only be covered for damages up to the limit of your policy. You decide how high to place this limit when you purchase the policy.

Liability

You have a party at your apartment and a guest slips and falls in the kitchen, suffering significant injury. The guest sues you. The liability portion of your rental insurance policy covers the cost of any bodily injury or property damage claims against you, including the cost of hiring legal representation.

In most cases, your policy will cover costs related to legal representation due to a lawsuit as well as any damages that are awarded, up to your policy limits.

Additional living expenses

A tornado whips through town and significantly damages the apartment you rent. Additional living expenses coverage typically will help pay for additional living expenses you incur due to having to find a new temporary home.

"Additional living expense on an HO-4 would cover costs associated with hotels, meals, laundry, and other expenses that the tenant incurred while their apartment was being repaired. It could also cover costs associated with moving, should the apartment not be inhabitable for an extended period," Biggert says.

Renters insurance replacement cost vs. actual cash value

How much does renters insurance cover? To answer this question, you must know whether you have purchased “replacement” coverage or “actual cash value” coverage.

Replacement cost:

Replacement cost coverage reimburses you for the actual cost of replacing your possessions. As an example, if your TV is destroyed, your insurer would replace it with a brand-new TV of a similar size and quality, regardless of the age and current value of your original, aging TV when it was destroyed. These policies ensure that you will receive the full cost to replace your possessions, rather than the depreciated value of your old TV.

According to III, replacement policies tend to be more expensive than actual cash value by about 10%. But they offer the peace of mind that your possessions will be replaced.

Actual cash value:

With this type of coverage, insurers take depreciation into account when calculating the value of your possessions. Your insurer will only pay out the equivalent of the belongings' value at the time of the loss. This means that if you have a ten-year-old TV, the payout amount will be for the value of a TV that is ten years old. In most cases, it will not be enough to cover the cost of a new TV.

These policies are less expensive, but remember that you will have to cover the difference between your policy pays and the cost to replace your possessions with new ones.

Whether you purchase replacement or actual cash value coverage, it’s important to note that coverage may be capped on some very expensive items. High-value items, such as jewelry, artwork, furs, firearms and other collectibles, can be subject to a value cap. The cap amount can vary, but it might be around $1,500, according to the III. If you have items that fall into these categories and the value is more than $1,500, you can purchase a policy rider to increase coverage levels.

Do I need renters insurance?

Yes. Because bad days happen. Sometimes they're your fault. Sometimes they just come at you.

Renters insurance is much like homeowners insurance. It pays for your personal property that's damaged or stolen. And it provides liability protection for any damage or injuries caused by you, your household family members or your pets, either in or outside the apartment.

Sometimes called apartment insurance, it will also help pay hotel expenses if your unit is temporarily unlivable due to fire or water damage.

It differs from homeowners insurance in that it does not cover structural damage. This is also why it's much cheaper.

"Everything that you brought into the structure is your responsibility," says Mike Barry of the Insurance Information Institute (III). "The landlord's responsibility, when it comes to insurance, is limited primarily to the structure."

How much does renters insurance cost?

How much does a renters policy cost per month for an apartment? Surprisingly, not much – it’s less than $30 a month

Rates vary based on coverage amounts, the renter’s credit history, and where he or she lives. Based on a 2020 Insurance.com rate analysis, the national average yearly cost for a policy with coverage levels of $40,000 for personal property, a $1,000 deductible and $100,000 of liability protection is $326, or about $27 a month.

Jersey, Tennessee and Utah are about average for that coverage level. Mississippi, Louisiana and Oklahoma are the highest, at between $540 and $580 a year. Vermont and Wyoming are the lowest, at about $160 a year.

To boost your liability limits to the recommended amount of $300,000, it costs just a dollar more a month -- the yearly average cost is $341, or $28 monthly.

You may need to pay extra to add flood or earthquake coverage or add expensive items that exceed individual limits, such as jewelry or antiques. These endorsements typically add a few dollars per month.

Of course, there are ways to trim those costs. For example, raising your deductible can reduce your premium costs.

An insurance provider also might charge you less if you have an existing relationship and have purchased other insurance from the company – such as auto insurance, for example. This process is known as “bundling” your coverage and it can save you cash.

The Insurance Information Institute also notes that you might qualify for discounts that many insurers offer. These include having:

  • A security system in your rental
  • Smoke detectors and deadbolt locks in the rental
  • A good credit score
  • Finally, if you are older than 55, some insurers will offer you a break on your premium.

Here are average rental insurance costs by state, so you can have an idea of what you'll pay. Enter your state in the search field to get your results. Rates are for common coverage levels of $20,000, $40,000 and $60,000 in personal property coverage, with liability limits of $100,000 and $300,000, all with a $1,000 deductible.

State$20,000/ $100,00040,000/ $100,000$40,000/ $300,000$60,000/ $300,000
Vermont$121$160$169$218
Wyoming$136$165$183$218
North Dakota$133$190$207$258
Alaska$142$195$218$266
Hawaii$148$198$220$281
Washington$158$206$223$281
South Dakota$144$214$231$305
Utah$245$330$244$296
New Hampshire$154$227$247$324
Iowa$224$322$249$321
Oregon$174$232$249$314
Wisconsin$176$252$268$349
Maryland$179$252$269$351
Montana$180$259$280$367
California$205$260$281$338
Pennsylvania$179$261$286$380
Colorado$203$272$292$358
North Carolina$157$288$297$419
DC$209$283$300$395
Idaho$214$287$307$404
Nebraska$214$293$307$399
Florida$192$295$313$410
Maine$191$299$316$429
Virginia$202$302$321$428
Indiana$221$306$324$415
Minnesota$349$312$324$421
New York$209$304$328$430
West Virginia$227$314$328$406
Illinois$230$313$330$417
Arizona$229$308$336$428
New Jersey$223$322$350$451
Tennessee$219$325$350$465
Nevada$242$338$355$449
Connecticut$222$334$359$486
New Mexico$243$338$359$458
South Carolina$245$359$381$495
Delaware$252$371$383$496
Missouri$263$369$386$484
Kentucky$274$367$388$473
Rhode Island$248$377$392$515
Texas$237$379$396$545
Kansas$262$391$404$543
Ohio$262$384$405$522
Arkansas$295$410$428$544
Massachusetts$255$425$443$613
Michigan$334$506$525$678
Georgia$330$511$536$706
Alabama$359$523$542$693
Oklahoma$361$543$561$632
Louisiana$388$571$600$672
Mississippi$374$579$600$800
National average$228$326$341$438

How much renters insurance should I carry?

The answer can be complicated and varies from person to person. There is no minimum coverage amount that is right for everyone. If you have a lot of assets, you'll probably want enough liability coverage to protect them in case you are sued. Many insurers offer policies with liability coverage as low as $100,000. However, the III notes that some experts urge renters to purchase at least $300,000 worth of protection and more for renters with many assets to protect.

If you have many valuables, you need enough personal belonging coverage to make you whole if those valuables are destroyed in a fire or stolen.

The Insurance Information Institute says creating a home inventory -- a detailed list of your belongings and their estimated value -- can help you zero in on how much coverage you need for your personal property.

So, on a sheet of paper or on a computer, list your most valuable possessions and how much they would cost to replace.

Once you know how much you need -- in property and liability -- you can compare policies. Be careful to consider what each cover. Don't just go by the base rate. Some companies advertise policies for as little as $50 a year with a multiple-policy discount, but they provide low medical limits.

Your current car insurance provider is an excellent place to start, as most of them also sell policies for renters and offer some kind of a bundling discount.

How to get a renters insurance policy

The absolute best way to save money on your renter's insurance is to shop your policy at least every three years. Fortunately, it is easy to find online. To do so, you need to compare renters insurance quotes. It's important that you are comparing apples to apples when shopping policies. Here are a few items you should check when looking for a new policy:

All renter policies have coverage levels for both personal property and liability coverage. It's essential that all of the policies you are considering offer the same amount of coverage.

A policy that caps liability coverage at $100,000 will almost certainly be cheaper than a policy offering $300,000 of coverage. You could still end up on the hook for some significant expenses if someone is seriously injured in your apartment and their expenses quickly exceed $100,000.

Renters insurance companies

When it comes to shopping for a policy, you have no shortage of options and it will be easy to get a renters insurance quote. A vast number of insurance companies sell these policies. They include:

  • Allstate
  • American Family
  • Eire
  • Farmers
  • Lemonade
  • Liberty Mutual
  • Met Life
  • Nationwide
  • State Farm
  • USAA

Will renters insurance get me a discount on my car insurance?

When you buy more than one type of insurance policy from an insurer, you often will get a price break on your premium costs. This is known as “bundling” your coverage.

"Insurers know that a customer who has multiple policies with them is less likely to leave to go to a competing insurer," says Chris Hackett, director of personal lines policy for the Property Casualty Insurers Association of America. The multiple-policy discount is a prevalent means to "reward customers for being loyal, and to try to retain them."

Insurers may give you as much as 10% to 20% off your insurance by bundling policies. 

"If your premium on auto was substantial," Hackett says, "that companion policy discount could be pretty substantial."

Based on a survey of rates from six major carriers in every state, commissioned by Insurance.com, the average discount for bundling a renters policy with auto coverage was:

StateDiscount
Alabama4.4%
Montana2.8%
Alaska6.6%
Nebraska2.9%
Arizona5.4%
Nevada4.5%
Arkansas3.4%
New Hampshire4.1%
California6.9%
New Jersey3.6%
Colorado4.3%
New Mexico4.6%
Connecticut5.5%
New York6.5%
Delaware4.5%
North Carolina2.9%
District of Columbia2.7%
North Dakota7.6%
Florida6.6%
Ohio4.2%
Georgia7.1%
Oklahoma3.5%
Hawaii1.2%
Oregon6.1%
Idaho4.2%
Pennsylvania4.1%
Illinois4.3%
Rhode Island1.6%
Indiana6.5%
South Carolina3.2%
Iowa10.2%
South Dakota3.9%
Kansas5.9%
Tennessee6.9%
Kentucky5.9%
Texas3.3%
Louisiana3.9%
Utah5.4%
Maine6.5%
Vermont8.8%
Maryland5.0%
Virginia4.8%
Massachusetts4.7%
Washington5.5%
Michigan4.0%
West Virginia3.7%
Minnesota7.7%
Wisconsin5.2%
Mississippi5.2%
Wyoming2.8%
Missouri5.9%

A renters policy is a necessary part of renting. Make sure you shop around and find the right level of protection for the right price.

Frequently asked questions about renters insurance

Should I share a renters policy with my roommate?

Most experts don't recommend sharing renters insurance with roommates. Although you can split the cost, the savings are not much since you can often buy renters insurance for less than $30 a month.

The cons can be substantial. All of your roommate's claims will end up on your insurance record, and if your roommate's possessions have a higher value than yours, a 50/50 split on the bill may not be fair.

Renters insurance for college students

Almost all homeowners policies will extend coverage to college students living in a dorm or campus housing.

"Most homeowners policies include coverage for a college student's personal belongings while they are living on campus. Typically, the student's property is covered up to 10% of the amount on the parent's policy for personal property," explains Orbann.

For example, if the parent's homeowners policy offers $300,000 in coverage for personal property, your student would be eligible for $30,000 in coverage. While 10% is fairly standard, the percentage does vary by policy, so verify coverage levels before assuming you are protected.

What isn’t covered by renters insurance?

Renters insurance does not cover structural damage to your rental unit. This is why it's much cheaper than homeowners insurance

It also does not cover a host of other things, from expensive jewelry and business equipment to flooding damage and your own medical bills.

Will renters insurance cover my laptop?

Yes. Tenant insurance covers your personal property even if it's in transit, like in a moving van, or just parked outside the gym.

The catch is that the limit for loss outside the home is typically 10% of the total personal property limit. So, if you have $2,500 in personal property coverage, you'll only be reimbursed up to $250 for items stolen from your car.

Does renters insurance cover fire?

A renters policy will protect you from both fire and smoke damage. The policy reimburses you for damage to your possessions, while the landlord's policy will reimburse damages to the rental unit itself.

Does renters insurance cover earthquakes?

A homeowners or renters policy typically does not cover you from earthquake damages. However, earthquake coverage can usually be added as a rider to your renters insurance policy. Or, you can purchase a separate earthquake policy.

How much personal property coverage do I need for renters insurance?

The Insurance Information Institute recommends creating a detailed list of your belongings and their estimated value – also known as a “home inventory” – to help you figure out much personal property coverage you need. Simply list your most valuable possessions and how much it would cost to replace them.