How much renters insurance do I need?


The amount of renters insurance you need depends on where you live, how much you can afford, and how much it would cost to replace your personal belongings if they were destroyed in a disaster.

Logan SachonKara McGinley


Logan Sachon

Logan Sachon

Senior Managing Editor, Research

Logan Sachon is the senior managing editor of research at Policygenius, where she oversees our insurance and financial data studies and surveys. Previously, she co-founded The Billfold, a groundbreaking personal finance site for millennials named one of TIME's 25 best blogs of the year.

 & Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

Updated February 20, 2020 | 6 min read

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Key Takeaways

  • The amount of renters insurance you need depends on your budget, where you live, and how much your belongings are worth

  • You should take a home inventory to get a better idea of how valuable your possessions are. When purchasing a renters insurance policy, you should look into adding endorsements for expensive personal property

  • There are a few ways you can lower your renters insurance premium, like installing safety devices and improving your credit score

How much renters insurance you need depends on your own personal circumstances. A landlord may require you to purchase renters insurance, but even if they don’t, it’s a good idea to buy an insurance policy for financial protection in case anything goes wrong.

A renters insurance policy isn’t just a good way to protect your belongings inside and outside your apartment – it also protects your personal liability and additional living expenses if your home becomes uninhabitable.

Before buying renters insurance, you need to factor in your budget, your lifestyle, and how much your personal possessions are worth and then calculate how much renters insurance coverage you want to buy. You should also shop around to compare insurance companies and find the best price for you before settling on an insurance company.

The amount of renters insurance you should get varies from person to person and will affect your premiums, but on average a renters insurance costs just $15 a month and can offer you tens of thousands of dollars worth of protection, making it a smart buy for any renter.

In this article:

Common renters insurance coverage amounts

A typical renters insurance policy is split into different coverage types. Here’s how your policy is typically divided, along with the some common coverage amounts in the U.S.

  • Personal property coverage: $30,000

  • Personal liability coverage: $100,000

  • Loss-of-use coverage: 40% of your personal property coverage

You should also aim for a $500 deductible – the amount you have to pay out of pocket before your insurer will pay out the rest of a covered claim. The lower your deductible, the higher your premiums will be, and the higher you set your deductible, the lower your premiums. But don’t set your deductible too high, because you might actually have to pay it someday.

These prices reflect a basic renters insurance policy. If you need more coverage and add endorsements to your policy, then these numbers could go up.

You can lower your renters insurance premiums by opting for lower coverage amounts, but the difference in price is negligible. For example, the above coverage will cost most shoppers under $15 a month, and changing the personal property damage coverage to $10,000 lowers the premium amount by just $4.

Learn more about the average cost of renters insurance here.

What does renters insurance cover?

A typical renters insurance policy is actually made up of three different types of components that all provide separate types of protection.

  • Personal property coverage: Reimbursement for your personal belongings if they are stolen, damaged, or destroyed by a covered peril.

  • Liability coverage: Financial protection if you cause damage or someone gets hurt on your property and needs medical attention or decides to press charges against you.

  • Loss-of-use coverage: Reimbursement for the cost of a hotel or a new rental if your home becomes unsafe to live in due to a covered peril.

For example, if your personal property is destroyed in a fire, your renters insurance personal property coverage will protect your finances by reimbursing you for the loss. If your home needs to be repaired after the fire, then your loss-of-use coverage will pay for you to temporarily relocate and stay elsewhere. And say while you’re staying at that temporary rental home you damage the TV, your liability coverage could help you pay to repair it.

Common covered perils in a renters insurance policy are:

  • Fire and lighting

  • Vandalism

  • Theft

  • Windstorm and hail

  • Smoke

Learn more about what renters insurance covers and what it does not.

What to consider when calculating how much coverage you need

Rather than just guessing how much coverage you need, use these guidelines to figure out what your belongings are worth (which determines what your limits should be) and how much of a premium you can actually afford.

What do I own?

You’ll want to make sure your personal property damage coverage is enough for all of your possessions.

You should take a home inventory of all your belongings. Your home inventory is when you’ll take stock of what you own and its value so you know how much it would cost to replace or repair anything if it’s stolen or damaged. It will also come in handy if you are filing a claim because you will quickly know how much you are owed.

You don’t need to tally up the exact value of every single item you own, but try and estimate how much it would cost to replace your things if there were a fire in your apartment or if someone stole your valuables. Look around your living room — if your couch, bookshelf, television and area rug were all destroyed, how much money would you need to replace them?

You can also take photos or a video tour of your unit in case you need to file a claim down the road. Take note of any specific valuables as well — if you have a diamond necklace or a very expensive smartphone, you may want to consider adding specific coverage to your policy for those items.

Do I need additional coverage?

While your renters policy has an overall limit for property claims — if yours is $30,000, that means that’s the maximum your insurance company will pay out for a claim, some renters insurance policies have sublimits on expensive categories of items like art, electronics, and jewelry. Before you sign your renters insurance policy, make sure you know its coverage limits and sublimits. You may want to schedule endorsements to get additional coverage for specific valuable items, or you can purchase a separate policy for them, like jewelry insurance.

Renters insurance doesn’t cover all perils, for example, it won’t cover damage from a natural disaster. You can add endorsements to your policy to add coverage for specific events, like an earthquake endorsement or a flood rider.

How much liability can I afford to pay?

If someone injured themselves in your apartment, would you be able to cover legal bills if they decided to sue you? What about covering their medical bills? These can add up fast, and renters insurance liability coverage lets you cover them without dipping into savings like an emergency fund. Liability coverage also covers property damage you’re responsible for, like if you knock over an expensive vase at a relative’s home, or if your teenage child vandalizes their school.

A typical renters insurance policy includes several hundred thousands of dollars worth of liability coverage, which may seem like a lot, but consider how much legal fees or medical expenses can cost. Whatever you do, don’t underestimate your coverage needs. Renters insurance is one of the most affordable types of insurance available, and saving a few dollars a month isn’t worth the thousands it could potentially cost you if you need to make a claim.

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How to buy renters insurance

Renters insurance is affordable and easy to buy. You can usually do the whole thing online and may not even have to pick up the phone. You should complete your home inventory before you shop around. Compare quotes and coverage options from a few different companies before you decide.

If you want to talk to a representative from a renters insurance company, there are a few questions you should discuss before deciding to buy a renters policy through them.

  • What perils are covered?: Some policies are named-perils policies and some are all-risk policies. Named-perils will clearly outline which perils are explicitly covered and all-risk will usually reimburse you for a loss regardless of how it was caused. You should discuss with your insurance representative to decide which policy is best for you.

  • Is all my personal property covered?: You should double check with your insurance company to see which belongings have sublimits and if any personal possessions are excluded from coverage.

  • **Do I have an actual cash value (ACV) or replacement cost value (RCV) policy?: The difference between these two types of policies is how you will be reimbursed for in the event of a covered claim. If you have a replacement cost value policy you will be reimbursed as if the item was new, but if you have an actual cash value policy you will be reimbursed the depreciated value of the item (meaning age and wear and tear are factored into the pay out). Replacement cost value policies pay out more, but they also cost more.

How to lower your renters insurance premium

There are a few things you can do to lower the price of your renters insurance premium and qualify for some discounts:

  • Install safety devices, like smoke alarms or deadbolt locks

  • Pay a higher deductible for a lower premium

  • Improve your credit