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What Is Renters Insurance? Defined And Explained

March 09, 2024 5-minute read

Author: Carla Ayers


As a tenant who is renting property, it’s important to learn how to protect yourself and your belongings in a rental agreement in case something happens. While you might not think you need insurance as a renter, it’s still good to know what options are available to you as a tenant in this type of living situation.

Let’s discuss what renters insurance is, how it works and the coverage that comes along with it.

Renters Insurance: Defined

Renters insurance offers tenants a means to protect themselves and some of their belongings when living in a rental property. Whether it be an accidental injury or various damage to personal belongings, renters insurance could help potentially cover some of those costs for renters.

While sharing some similarities to homeowners insurance, renters insurance is only for people who are renting a property. One key difference between renters and homeowners insurance is that homeowners insurance is mandatory for borrowers who are taking out a mortgage and renters insurance is optional.

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How Does Renters Insurance Work?

If something happens in your rental property and is covered by your renters insurance policy, you as the tenant have the ability to file a claim and possibly receive a check from the insurance company to cover that loss. Of course, the loss has to be covered under your specific policy and the amount you receive from the insurance company can also vary depending on your type of coverage and the size of the loss.

For example, let’s say a fire has destroyed a portion of the apartment you live in. With the right renters insurance policy, you should be able to file a claim to have your living expenses paid for while you wait for your apartment to be cleaned up and repaired. Renters insurance could help pay for your meals, hotel rooms and other various living expenses while you’re not able to live in your apartment.

It’s also important to understand that you will have to pay a deductible before the insurance company can start paying you for any covered losses. The deductible is usually dependent on the policy premium. If you pay a high premium, your deductible amount is usually lower since you’re paying so much upfront.

Understanding Renters Insurance Coverage

There are situations that are covered and situations that aren’t. Let’s go over what renters insurance could cover, along with what it won’t accept as a claim.

What Does Renters Insurance Cover?

The renters insurance coverage you receive depends on what the policy you pay for states, but here’s what is typically covered in most renters insurance plans.

Personal Belongings And Property

What counts as personal property or belongings? This can be anything from clothing to furniture and various electronics. Rental property theft is usually covered by renters insurance. For example, if someone breaks into your apartment and steals your clothes and electronics, your renters insurance would help pay for the loss of those items. Typically, renters insurance policies can even cover personal items stolen from your vehicle or storage unit, not just from your rented residence.


With liability coverage, if you are legally responsible for an injury that occuredon your rental property, your insurance could help cover those costs depending on the specific situation. Renters insurance can also help cover the costs if you accidentally damage someone else’s property.

Medical Costs

Alongside liability coverage is medical coverage. Renters insurance can cover the medical costs of a person who is injured on the rental property. Keep in mind that this is dependent on the situation and doesn’t always apply automatically. You may need to have additional discussions with a representative of your insurer before you receive coverage.

Living Expenses

This refers to the expenses you would have to pay if for some reason you aren’t able to live in your rental property for a certain amount of time. As previously mentioned, renters insurance could help pay for your living expenses like hotel rooms, meals and other items you need while living outside of the rental property.

Legal Fees

If a situation occurs where you as the tenant are being sued by someone because of something that happened on the rental property, renters insurance could help pay for the associated legal fees. This also includes the legal representation you might need as well.

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What Isn’t Covered With Renters Insurance?

There are also some items and situations that aren’t usually covered by renters insurance.

Pest Infestations

Renters insurance will usually not cover any damage caused by pests such as mice or bedbugs. If you start to notice possible damage from pests in your rental property, you should consult with your landlord so they are aware of the issue and can figure out how to best resolve it.

Damage From Earthquakes and Floods

While renters insurance does cover damage from disasters like fires and extreme winds, it doesn’t cover damage caused by earthquakes or floods. If you live in a high-risk flood area, it might be worth it to look into flood insurance to properly protect your rental property. The same goes for earthquake insurance. If you’re living in an area that frequently sees a lot of damage caused by earthquakes, you should consider obtaining earthquake insurance.

Other Tenants Personal Belongings

Your renters insurance policy will not automatically cover your roommate’s personal belongings in the rental property. Your insurance policy is only for you and your covered items. If you live with other people in the same rental property, it’s best to each have your own renters insurance policy if everyone wants coverage.

Expensive Valuables

If you have a lot of expensive valuables like jewelry, artwork or high-end electronics, a basic renters insurance policy might not fully cover those items. In order to make sure they are covered, you should explore additional insurance coverage options for all of your expensive valuables.

Motor Vehicles

Vehicles are also not covered under renters insurance. While the personal items inside your car can be covered, renters insurance doesn’t protect the damage or loss of your vehicle. Auto insurance is going to protect and cover your vehicle – not renters insurance.

Renters Insurance FAQs

Let’s answer some of the most frequently asked questions regarding renters insurance.

How much does renters insurance cost?

The average cost of renters insurance in the U.S. is around $15 per month. However, this cost can vary greatly depending on the kind of policy you’re looking for and whatever additional coverage you wish to obtain. The price you pay is also dependent on where you live.

Is renters insurance required?

Renters insurance isn’t legally required when you rent a property, but landlords can make it mandatory if they wish. If it is required, it should be in your lease agreement as a requirement before you move into the property.

What’s the difference between renters insurance and homeowners insurance?

Renters insurance is not legally required and is meant for people who are renting property. Homeowners insurance is required by mortgage lenders when borrowers are buying a home.

How do I get renters insurance?

If you feel like you need renters insurance, your first step should be to shop around and obtain a number of quotes to find the best one for your specific needs. Comparing quotes can help you decide which insurance company can offer you the best policy at a price you can afford.

The Bottom Line: Renters Insurance Can Provide Protection

Renters insurance can provide protection for you and your belongings in various times of need as you live in a rental property. Through different coverage types and options, finding a renters insurance policy for your situation is a great way to feel secure and safe as a tenant in a property you don’t own.

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Carla Ayers

Carla is Section Editor for Rocket Homes and is a Realtor® with a background in commercial and residential property management, leasing and arts management. She has a Bachelors in Arts Marketing and Masters in Integrated Marketing & Communications from Eastern Michigan University.