Why You Need Renters Insurance

Adam Morgan
Adam Morgan

Do I need renters insurance?

Yes, you do. If you’re among the 35% of Americans who rent a home, there’s something you should know — your landlord’s insurance only covers the building you live in. As a renter, the only way to protect your personal belongings in the event of a disaster (or theft) is by purchasing renters insurance. Some landlords require renters insurance as part of their lease agreement, but even if they don’t, it’s still an absolutely crucial investment that could save you thousands if disaster strikes.

The case for renters insurance

If your home was destroyed tomorrow, imagine how much it would cost to replace your belongings from scratch. Anywhere from $5,000 to $50,000 — or even more, right? Luckily, renters insurance is much cheaper. In fact, the average American only spends $188 per year on renters insurance, meaning it will probably cost around $15 a month to protect your belongings from fire, storms, vandalism, theft, and other disasters (except for earthquakes, floods, landslides, and mudslides).

Plus, renters insurance covers more than just lost valuables. It also pays for living expenses if the disaster renders your home uninhabitable. If a visitor is injured in your home, it covers their medical expenses. If your dog bites a neighbor, some policies will cover that, too. If the injured visitor or neighbor sues you for negligence, renters insurance will help cover your legal fees. It even covers things in your home that don’t belong to you, like that futon on loan from your brother.

Your landlord’s property insurance definitely won’t do any of those things, but for some reason, only 2 out of 5 American renters purchased their own renters insurance in 2015. If you don’t like the idea of paying out-of-pocket for the situations described above, find a renters insurance policy to eliminate your risk and put your mind (and wallet) at ease.

Average Annual Insurance Premiums

What’s next?

  • We’ve already researched the best renters insurance providers, so take a look at our top picks and get a few quotes.

  • Here are a few ways to make your renters insurance premium even cheaper — bundle it with your auto insurance at the same company, install home security devices like deadbolts and smoke detectors, or raise your deductible (just make sure it’s not more than you could afford to pay out-of-pocket).

  • If you live somewhere prone to floods, earthquakes, landslides, or mudslides, consider adding standalone policies for those events, since most renters insurance policies won’t cover them.