It can be easy to write renters insurance off as something you don’t need as a renter. You already have enough bills to pay, why add on one more? Plus, your landlord has insurance, right? In fact, according to the Insurance Information Institute, 63% percent of renters don’t have renters insurance, maybe because they think it’s too expensive, or unnecessary, or they believe they’re covered by a landlord or roommate’s insurance policy.
You may hear plenty of reasons why you don’t need renters insurance, but most of them are actually wrong or based on misunderstandings of how renters insurance actually works. Here’s why.
Key takeaways
Renters insurance protects your personal property, liability, and covers additional living expenses if you are temporarily displaced from your home
Renters insurance is relatively inexpensive, costing an average of $16 a month
You are not covered by your roommate’s renters insurance policy. However you can get a renters insurance policy even if you aren’t on the lease, like if you are subletting
You can usually purchase renters insurance entirely online
1. Renters insurance isn’t worth it
This is a common renters insurance myth. It’s easy to dismiss renters insurance because you don’t want to add another bill to your current stack. But renters insurance is relatively cheap, and it actually covers more than you probably realize. It also includes more coverage than just personal property damage, too. There are three components of a typical renters insurance policy:
Personal property coverage: Coverage for your personal belongings, meaning your furniture, books, electronics — basically everything you brought into your home. Policies reimburse you for either the replacement cost value value or the actual cost value of your items after a loss.
Liability coverage: Renters insurance will also protect your personal liability, meaning injury or property damage that you are responsible for. So say someone gets hurt in your apartment then your policy can help pay for any medical expenses they need.
Loss-of-use coverage: If your rental becomes unsafe for you to live in, your renters insurance policy can pay for you to stay at a nearby hotel while your home is being repaired. Your renters policy can also reimburse you for any additional living expenses, like if you’re eating at restaurants more often because your hotel doesn’t have a kitchen.
2. Renters insurance doesn’t cover that much
This also isn’t true — renters insurance can protect all of your belongings if they are stolen, damaged, or destroyed by a covered peril. Say you have an apartment fire and everything in your living room is ruined. Renters insurance can pay for all of those losses, from your couch to your television to your bookshelf and all of its contents.
Some common perils covered by most renters insurance policies:
Fire and lightning
Windstorm and hail
Damage by aircraft
Damage by vehicle (not your own)
Theft
Smoke damage
Leakage or overflow of water or steam
Short-circuit damage caused by electrical appliances
Your personal property is covered outside of your home, too. So if any of these covered perils take place when your belongings are somewhere else, like say your bag and cellphone are stolen at the airport, then your renters insurance will still reimburse you for them. This is also true if you damage someone else’s property. For example, if you accidentally light your friend’s furniture on fire — your renters insurance policy can help pay them back for the damage you caused.
Read to learn more about what renters insurance does and does not cover.
3. Your landlord will cover any damage
Wrong. Your landlord has separate landlord insurance, which just covers the physical building. So if you live in an apartment, landlord insurance protects the physical apartment and the whole apartment complex — meaning your walls, floor and ceiling as well as the roof and structure of the entire building. However, your landlord and their landlord insurance do not cover you and your belongings. If your personal property is destroyed, you’re going to be left footing the bill yourself.
That also means that if there is a fire and you have to leave your apartment while it’s being repaired, then you’re on your own. But, if you have renters insurance, your renters policy will reimburse you the cost of any ruined belongings and pay for you to stay at a nearby hotel while your home is being repaired.
4. You roommate's renters insurance policy will cover you
This is also not true. Your roommate’s renters insurance policy only covers them and their stuff. That means if your apartment gets broken into and your roommate has a renters policy, the insurance company will only reimburse them for their covered losses — not you.
You can be added to your roommate’s renters policy as a named insured, but that will raise the cost of their premiums since the policy will now factor in your belongings as well. Be sure to weigh the costs in case it’s cheaper to just take a separate policy out in your own name.
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5. You’re not on the lease so you can’t get a renters insurance policy
Even if you’re not on the lease, you can still get an insurance policy to protect your personal property and liability. The coverage applies whether or not you have a lease, and your insurance company may not even require you to show them your lease. Most insurance providers only want to know your address, the value of your personal property, and maybe a bank statement to prove you pay rent.
6. Your personal property isn’t that expensive
It’s easy to think most the stuff in your apartment isn’t that expensive, especially since, as a renter, most home appliances are your landlord’s property. However, you’d be surprised how quickly things add up. All of your clothing, furniture, and tech could get damaged or stolen in one instance, and then you’d be left with having to fork over all the money to replace items that you actually do need on a day to day basis.
Also, renters insurance covers your stuff both on and off your property. So if your laptop gets damaged by a covered peril, in someone else’s apartment, then your renters insurance will reimburse you for the cost of it up to your policy’s limit.
7. Renters insurance is too expensive
It’s a common myth that renters insurance is expensive, and as a renter you’re probably already paying for your rent, utilities bill, and internet or cable. Renters insurance is actually one of the least expensive insurance policies you can buy, costing an average of just $15 a month.
When you purchase your renters insurance policy, you will choose how high you want your deductible to be, but the typical renters insurance deductible is either $500 or $1,000. The higher your deductible is the lower your premiums will be. Most renters insurance companies will give you the option of paying your renters insurance premiums monthly, bi-annually, or annually.
Learn more about how much renters insurance costs in your state.
8. It takes too long to get renters insurance
This is another common renters insurance myth. It’s actually quite easy to purchase a renters insurance policy, and you might be able to do it entirely online. Unlike other types of insurance, almost every renter is eligible to get coverage. Once you make a home inventory and determine how much coverage you want, you can easily go online to get quotes or you can talk to a representative over the phone.
