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Who needs renters insurance?

The short answer is, if you pay rent, you need renters insurance.

Renters insurance protects your stuff if it’s damaged, stolen or destroyed by a covered event, and it protects your liability if you accidentally hurt someone or they accidentally get hurt at your home and sue you.

It’s an essential way to protect yourself and your personal belongings. But very few landlords require it, and just 40% of renters have it. So do you need renters insurance? Probably — and the 60% of renters who don’t have it very likely need it, too.

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What renters insurance covers

Renters insurance is made up of several types of coverage in one affordable policy:

Personal property coverage: Provides protection for your personal possessions. Policies either provide the replacement cost value or the actual cash value of your belongings after a loss. Replacement cost value is the cost to replace the item. Actual cash value is the replacement cost value minus depreciation. Replacement cost value policies are more robust, but actual cash value policies are much cheaper. Liability coverage and medical payments: Liability insurance provides protection if you accidentally hurt someone or they get hurt at your home. Loss of use coverage: Also called additional living expenses. Provides coverage and living expenses if you need to stay somewhere else because your home is unlivable due to a covered peril.

Your renters insurance property damage protection kicks in after you experience a covered event or peril. These are listed in your policy and usually include fire, wind storms, broken pipes, and more. Exclusions include floods (you need flood insurance and earthquakes (you need a separate earthquake rider or endorsement.

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Who needs renters insurance: People who rent

If you rent your apartment or home, you need renters insurance. But just because you need it doesn't mean it’s required — unless it is.

Though there are no states that require renters insurance, it is legal in all states for landlords to require their tenants to have renters insurance. They write it into their leases, and it’s totally legal.

If your landlord requires you buy renters insurance, you may need to list them as an additional interest, meaning they’ll get a notice if your policy lapses or is canceled.

But renters whose landlords require it aren’t the only renters who need renters insurance. Read on for more specific situations and whether you need your own policy or could be covered by someone else’s.

Who needs renters insurance: Partners and spouses

When you buy a renters insurance policy, you’re the “named insured,” and the policy covers you, your spouse, and any other relatives (by blood or adoption) who live in your home with you. So if you’re legally married, your spouse is covered by your policy (or you can be covered by theirs).

If you’re not legally married, however, your partner is not automatically covered by your policy. The good news is, many renters insurance companies will let you add your partner to your policy either as an additional named insured — the cost shouldn’t be more than a few dollars extra per month. When you add a partner to your policy, check to make sure your coverage amounts are still high enough — two times the people can mean two times the stuff, which may mean you need to increase your coverage.

Who needs renters insurance: Roommates

If you live in a shared house and your roommate has renters insurance, you are only covered by their policy if your roommate adds you as a named insured.

But it’s worth it to purchase your own policy instead. If you are added to your roommate’s policy, you’d also have to navigate the claims process together and your own claims could effect your roommates insurance rates in the future.

Read more about renters insurance and roommates.

Who needs renters insurance: Non-leaseholders

A lease isn’t required to buy renters insurance, so whether you are living somewhere in an official capacity with a signed lease or you’re subletting from a friend with a handshake agreement, you still need your own renters insurance policy to protect your stuff and your liability. Read more about renters insurance without a lease.

Who needs renters insurance: Subletters

Subletters need renters insurance. Even if the person whose apartment you’re staying in has their own renters insurance policy, you need your own to cover your stuff — you won’t be covered by their policy, even if the lease is in their name.

Who needs renters insurance: Landlords

If you’re a landlord, you need landlord insurance, which protects your property and your business. Renters insurance is for your tenants. And it’s a good idea to require them to get their own renters insurance policies so that their belongings are covered. It will keep both of you protected in case something goes wrong.

Read more about buying landlord insurance.

Who needs renters insurance: People with home offices

If you are a renter, you need renters insurance. If you are a renter and also work from home, you may need renters insurance plus additional coverage.

Renters insurance policies have coverage caps on property you use for commercial or business reasons — usually just $2,000 or less. If your business property value exceeds your renters insurance policy coverage limits, you may need to look into either adding a commercial renters insurance rider or purchasing a seperate business or commercial insurance policy.

Who needs renters insurance: Dog owners

If you rent an apartment or home, you need renters insurance, but if you rent an apartment or home and have a dog you need renters insurance. Check carefully to see what your policy covers: some policies will cover your stuff if your dog damages it, others won’t. It’s very important to ask if your liability covers dog bites. If not, you may have to purchase animal liability coverage.

Read more about renters insurance and pets.

Who needs renters insurance: College students

If you are under 25 and your parents have homeowners insurance or renters insurance, your stuff may be covered if you’re a student living in an on-campus dorm — ask your parents to check their policy.

If you’re not covered, or if the coverage limits wouldn’t go far in replacing your MacBook and TI-83 calculator if your stuff is stolen, it may make sense to purchase your own renters insurance policy.

Read more about renters insurance for college students.

Who needs renters insurance: People who live with their parents

Most renters insurance policies cover blood relatives who live in the same home, so you should be covered by your parents policy. But there are several reasons to buy your own policy: the ability to make your own claims, the ability to protect your parents’ insurability, and the ability to ensure your stuff is protected.

Read more about renters insurance if you live with your parents.

Who needs renters insurance: Airbnb hosts

If you are a renter, you need renters insurance. If you a renter who rents your apartment out to other people, you need renters insurance and likely some further coverage as well.

According to the Insurance Information Institute, your renters policy may cover you during a one-time Airbnb rental if your lease allows it and you let the renters insurance company know beforehand.

If you rent out your apartment, or even part of it, more than once a year, most insurers will require a commercial policy or rider on top of your renters insurance policy. Talk to your insurance company. The good news is: with that rider, some companies may even pay you for lost rental income if your apartment should become uninhabitable.

Read more about short-term rental insurance.

Who needs renters insurance: Airbnb guests

When you stay in an Airbnb or other short-term rental, your personal renters (or homeowners) insurance will cover your stuff no matter where are you are — a hotel, a friend’s house, and yes, even an Airbnb. Check your policy about your coverage limits; many policies only offer 10% of your total coverage amount away from home.

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Disclaimer: Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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