Do you need renters insurance?

Renters insurance pays to replace your belongings after a fire or theft, covers you if someone is hurt in your home, and helps with costs if you have to move out while repairs happen. Your landlord's policy covers the building, not your things.

Three kinds of protection

Personal property covers your belongings. Liability covers injuries to others and damage you cause. Loss of use, also called additional living expenses, helps pay for a place to stay if a covered event makes your home unlivable.

Replacement cost or actual cash value

Replacement cost pays what it costs to buy a similar item new. Actual cash value pays what the item was worth after age and wear. Replacement cost usually costs a bit more and pays much more.

The deductible comes off each claim

The insurer subtracts your deductible from what it owes on a property claim. A $500 deductible on a $700 loss leaves a $200 payout.

Floods are usually not covered

Most renters policies exclude flood damage. Renters can buy flood coverage for their belongings through the National Flood Insurance Program.

What renters insurance covers

Personal property coverage pays to repair or replace your things after a covered event, like a fire, smoke, a burst pipe or theft. Many policies cover your things away from home too, such as a laptop stolen from your car, though limits can differ.

Liability coverage pays if you are responsible for someone else's injury or property damage, like a guest who slips in your kitchen or a bathtub that overflows into the unit below. It can also pay for a lawyer if you are sued. Loss of use pays extra costs, like a hotel and meals, while your place is being repaired after a covered loss.

Why it often costs less than people expect

A renters policy does not insure the building, only your belongings and your liability. That is a much smaller amount than the cost of rebuilding a home, so the price is usually lower than homeowners insurance.

Prices still vary by where you live, how much coverage you pick, your deductible and your claim history. Get quotes from two or three insurers with the same limits and deductible so you compare like with like. Some insurers lower the price if you bundle it with car insurance.

Choosing your coverage amount

Add up what it would cost to replace everything you own: furniture, clothes, electronics, kitchen gear, bedding and books. The total is often larger than people guess, because small things add up.

For liability, many policies offer a choice of limits. A higher limit usually costs only a little more and protects more of your savings and future income if something serious happens.

How to make a home inventory

A home inventory is a list of what you own, with rough values and proof. It makes a claim faster and helps you choose the right coverage amount.

Record a video of each room. Open closets, drawers and cabinets. Take close photos of serial numbers on electronics. Save receipts or order confirmations when you can. Store the files in cloud storage or email them to yourself, so they survive a fire or theft. Update it once a year.