Who Needs Renters Insurance? The Answer May Surprise You

You may not think your possessions are prized enough to merit renters insurance, but the reality is that the choice may not be up to you. Yes, that’s right — renters insurance can be a requirement for tenancy.

Renters insurance is a policy purchased by a tenant to protect their personal belongings in a rental in the event of theft, vandalism, or damages caused by unexpected circumstances such as fire or sewage backup. Renters insurance can also protect you from personal liability if someone sustains an injury in your apartment.

Much to many renters’ surprise, the answer to this question is yes. In most states, property managers and landlords can require tenants not only to get renters insurance but also to provide proof of renters insurance.

On the most basic level, renters insurance covers what you own and keep within the walls of your rental unit. The amount of coverage you can claim depends on how much renters insurance you purchase.

While a landlord’s insurance covers the building, it doesn’t extend to a renter’s personal belongings within the interior of an individual unit. For example, while water damage to the ceiling of an apartment unit caused by a burst pipe would be covered by a landlord’s insurance policy, water damage to a tenant’s personal belongings caused by the same burst pipe would not be covered by a landlord’s insurance policy.

In some cases, the amount of coverage you need will be determined by the terms of your lease. If your landlord or property manager requires a renters insurance policy, refer to your lease agreement for the minimum amount needed. If you’re considering renters insurance and the amount of coverage is not mandated by your landlord, you’ll want to take inventory of your personal belongings to arrive at a rough estimate of replacement cost and go from there.

Whether renters insurance is required for tenancy or not, it’s worth considering. It may be more affordable than you think, and, in the event of the unexpected, not having renters insurance could cost you. While renters insurance rates vary from one insurance company to the next and we recommend getting a quote from several insurance companies, the average cost of renters insurance in 2022 according to MoneyGeek “is about $13 per month, or $159 per year, for $20,000 of personal property coverage, $100,000 of liability coverage and a $500 deductible.” Even if you don’t have many valuables, replacing damaged personal belongings will most certainly add up.