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How Much Renters Insurance Do I Need?

Last updated 03/19/2024 by

Lacey Stark

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Fact checked by

How much renters insurance you need primarily depends on what it would cost to repair or replace your personal property if it was stolen, damaged, or destroyed in a covered event. Your personal property coverage will include items such as furniture, clothing, and electronics. If you have a lot of newer and more expensive personal belongings, you may need higher coverage limits than someone with less pricey personal property. You may also need additional insurance coverage if a standard renters insurance policy doesn’t cover the loss of all your items.
Like other types of insurance coverage, a renters insurance policy is meant to protect you in the event of a covered disaster. Many renters may think they don’t need to buy renters insurance because they’ll be covered by their landlord’s insurance. But the reality is that a landlord’s policy typically only covers the building itself, not a tenant’s personal property.
Below we’ll discuss what renters insurance policies cover (and what they don’t), how much it’s going to cost you, and how to calculate how much renters insurance you really need.

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How much renters insurance do you need?

Most people aren’t aware of the total cost of their belongings. So when you rent an apartment, it’s common to wonder about how much renters insurance you need and how you figure it out.
One of the best ways to determine how much renters insurance you need is to make an inventory of your personal property, says Adie Kriegstein, a licensed real estate salesperson and founder of the NYC Experience Team at Compass Real Estate.
“You can then select a coverage limit that will provide enough protection to replace all of your belongings in the event they are stolen, damaged, or destroyed due to a covered event such as fire, theft, or water damage,” Kriegstein says.
This will protect you from struggling to pay out-of-pocket costs to replace all of your personal possessions. That could be very expensive even if you don’t have many expensive belongings like computers, televisions, or other high-cost items.

Personal property coverage

Gordon Nishimoto, an insurance agent with State Farm, says policies start at a $10,000 personal property coverage limit. He generally only recommends that amount for, perhaps, a single person, just out of college and getting their first apartment.
Couples or individuals who are more established (and, in general, have more stuff) will probably want significantly more renters insurance coverage than $10,000, says Nishimoto. Any expenses beyond your personal property limit will have to be paid out of pocket if you don’t have enough renters insurance.

Inventory list

When cataloging your personal possessions, you may want to consider taking photos or video of your belongings. One way to do this is to take pictures or videos of each room in your home. You may also want to keep a file of (pretty much) everything you own, including any paperwork. Be sure to include the following:
  • Descriptions of your personal property, including clothes, computer, etc.
  • The value of each belonging or group of items (for example, estimate the total cost of your clothing)
  • The age of items, especially high-end electronics
  • Hold onto receipts or scan and store them in a secure file

What renters insurance covers

As mentioned above, a landlord’s insurance covers the structure itself (and liability coverage for the building owner), but it doesn’t cover a tenant’s personal property within the rental space. That means if there is a fire or other disaster, you will need your own policy to cover any items you own.
In general, there are three parts of insurance coverage to a standard renters insurance policy: personal property coverage, liability insurance, and loss of use coverage.

Personal property coverage

Personal property coverage is arguably the most important part of renters insurance coverage because it includes pretty much everything you own. This is where your inventory list comes in handy because you’ll need it if you have to make an insurance claim. The following is a list of some of the events in which your renters insurance should cover your personal property.
  • Theft
  • Vandalism
  • Fire and smoke
  • Wind and hailstorms
  • Lightening strikes
  • Water damage (such as from burst pipes)
  • Explosions
  • Snow and ice collapses
Keep in mind, that your renters insurance policy will only cover up to the limits of your insurance policy, minus your deductible. So if you discover you have a property loss of $30,000, but only have $20,000 in personal property coverage, $20,000 is the maximum you can claim.

Pro Tip

It’s also important to be aware of coverage limits for certain items under a typical renters insurance policy. For example, if you have a lot of expensive jewelry, artwork, or firearms, the full cost may not be covered by renters insurance policies. If you think you may have special insurance needs, talk to your insurance company about extra coverage or additional, separate insurance policies.

Personal liability coverage

Renters liability insurance covers the repair or replacement cost if you accidentally damage someone else’s property. It can also help you out if someone is injured at your home and you need to help cover medical bills.
“The other big benefit of a renters insurance policy is its personal liability and medical payments coverage,” says Angel Conlin, chief insurance officer at Kin Insurance. “If you’ve ever had several guests over at your place, chances are you’ve seen the potential for accidents.”
She goes on to say, “Perhaps your friend is a really enthusiastic dancer and slips and falls in your kitchen while getting down to Lizzo. Maybe you accidentally knock your guest’s phone off your counter and it shatters. Accidents happen all the time, and when they happen in your place, you can be held responsible for the financial aftermath. Fortunately, personal liability insurance can help pay for incidents like your friend’s medical costs or broken phone.”
Personal liability renters insurance, in addition to medical payments coverage, should also help cover legal fees plus any settlement costs. Standard liability coverage limits for renters insurance are usually set at $100,000.

Loss of use

Loss of use coverage, also known as additional living expenses, is meant to cover expenses when the dwelling you rent is deemed uninhabitable for living due to a covered event such as fire or water damage. In that case, you may need to live in a hotel, pay for restaurant meals, or incur other costs. Loss of use coverage pays for those additional living expenses and may be a set amount or a percentage of your personal property coverage limit.

Do you really need renters insurance?

Unlike auto insurance, which is required in almost all states, or homeowners insurance, which is required if you carry a mortgage, renters insurance is not mandatory. However, individual landlords may stipulate in your lease that you need to carry a minimum amount of renters insurance including personal liability coverage.
Even if it’s not a requirement of your rental agreement, it’s a good idea to have the insurance. Unless you have enough money in your emergency fund to replace all of your personal belongings, renters insurance is the only thing standing between you and significant losses.

Pro Tip

“Overall, renters insurance is important because it provides financial protection and peace of mind in case the unexpected happens. Remember It’s a good idea to review your renters insurance coverage periodically to ensure that it still meets your needs and adequately protects you in the event of a loss” – Adie Kriegstein.

How much does renters insurance cost?

The good news is, renters insurance coverage is much less expensive than homeowners insurance. This is mainly because with renters insurance you only need to insure your personal belongings and carry liability coverage, whereas homeowners coverage has to include whole property coverage.
According to the 2022 Renters Insurance Industry Report by, the average cost of a renters insurance policy is $211 a year (or $18 a month). By contrast, homeowners insurance costs an average of $1,584 per year (or $132 a month).
Nishimoto says his firm’s minimum renters insurance policy goes for only $85 a year (about $7 a month) for a minimum of $10,000 in personal property coverage. That may or may not be enough coverage for your needs, but it gives you a starting point.
He adds that renters insurance coverage may also be cheaper depending on where you live. For example, if you live in a very safe area, that same $85 renters insurance premium could get you as much as $20,000 in personal property coverage. Compare your options for renters insurance below.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Does renters insurance cover floods?

Renters insurance, like homeowners insurance, does not provide coverage in the event of a flood. If you live in an area where flooding is a concern, you may want to purchase flood insurance separately. If you are a renter, you can buy a policy from the National Flood Insurance Program (NFIP) which will cover the contents of your apartment for up to $100,000.

What if my insurance claim is less than my deductible?

If your property damage is less than your deductible, your insurance won’t pay out any money because deductibles are, by definition, out-of-pocket costs. For instance, if someone breaks into your house and steals your laptop, which is worth $1,000, but your deductible is $1,500, you can’t file a claim for that loss. On the other hand, if your computer is worth $2,000, you can make a claim, but you’ll only get $500 from insurance.
It’s important to keep in mind that if you have a higher deductible, you can lower your insurance premium. But that’s not always the best move if you don’t have the cash reserves on hand to cover smaller losses. Going by the above example, you may want to stick with the standard $500 deductible and pay slightly higher insurance premiums to ensure you’re covered when you need it.

Is it worth it to shop around for renters insurance?

It’s never a bad idea to shop multiple companies for the best renters insurance coverage for the lowest price. However, if you already have an insurance company — for your auto insurance, for example — that’s the best place to start.
Many insurance companies (if not most), will usually give you a deal on your renters insurance because you already have an existing policy with them. This is known as bundling your insurance and is typically more convenient and less expensive. Having said that, it can’t hurt to get additional renters insurance quotes which may give you some bargaining power to get the best price from your existing insurance company.

Key takeaways

  • Renters insurance provides a financial safety net for renters if their personal property is stolen, damaged, or destroyed in a covered event.
  • How much renters insurance you need primarily depends on the cost to repair or replace your personal property in the event of fire, theft, or other covered event. You can create an inventory of your belongings to help calculate this number.
  • Renters insurance typically includes personal property coverage, personal liability coverage, and additional living expenses coverage.
  • You can often save money on renters insurance by buying it from the same insurance agent that sold you car insurance or other insurance policies (bundling policies).

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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