- Renters insurance (HO-4) covers your unit's contents, liability, and living expenses if your home is inhabitable.
- Renters insurance is one of the cheapest types of home insurance, costing an average of $170 yearly.
- Many landlords will require you to purchase minimum liability coverage for your unit.
For renters, an unexpected event like a fire or theft can result in significant losses. While your landlord's insurance policy covers the building itself, your possessions in your unit are not covered under their insurance. You'll need to find your own coverage, which is where renters insurance, or HO-4 insurance, comes in.
Renters insurance protects your personal property when damaged by a covered peril or a loss listed in your policy, like fire, smoke, theft, and storms. Though just 51% of U.S. renters are insured, according to data from The Zebra, renters insurance can be a worthwhile investment in safeguarding your property.
What is Renters Insurance (HO-4)?
There are three parts to renters insurance coverage: personal property coverage, personal liability coverage, and "loss of use" coverage, which pays for additional expenses if your unit becomes temporarily unlivable and you have to make alternative living arrangements.
According to the Insurance Information Institute, "standard renters insurance policies provide liability protection against lawsuits for bodily injury or property damage that you or your family members cause to other people." For instance, if your dog bites someone on your property, a renters insurance policy will cover medical or legal fees related to the incident.
How Liability Coverage Works in a Renters Insurance Policy
Renters liability insurance is one part of your insurance policy that protects you or a member of your family from causing injury to another person or damage to someone else's property in your home. This is sometimes referred to as "personal liability insurance."
Imagine your friend is at your house, and you accidentally spill water on their cell phone. Their phone is damaged and needs to be replaced. You can submit a claim to your renters insurance provider, and the insurer will cover the damage to your friend's phone up to your policy limits.
What's the Difference Between Property & Liability Coverage?
Personal property coverage will replace or repair furniture, clothes, sports equipment, and other personal items. The amount you need depends on the value of your belongings. You may need to purchase more coverage if you own jewelry or high-valued electronics that are more expensive to replace.
Many policies will cover your belongings with the actual cash value amount — the cost of your item minus depreciation. However, several providers may offer replacement cost coverage, which covers the amount it would take to repair or replace your item of similar value at an additional cost.
Your landlord's insurance policy should cover any damages to built-in appliances they provide. You will need renters insurance to cover appliances that you bring, such as a blender or a TV, according to Mitchell Stella, former managing director of Goosehead, an insurance comparison platform.
Why Landlords Require Renters Insurance
Many renters are under the misconception that their landlord's renters insurance policy will cover all home-related losses. While your landlord's policy will typically cover the building and the structure, you're responsible for the contents inside the unit.
Several landlords require minimum liability coverage of $100,000, according to Stella. Check your lease agreement to see if your landlord requires renters insurance when moving into a new unit.
Who needs renters insurance?
Renters insurance protects you from financial hardship if the contents in your unit undergo damage or if someone gets injured on your property. Ask yourself these questions to determine if you need renters insurance:
- Can I afford to replace the damages to my personal belongings?
- Can I afford to pay for legal or medical expenses if someone gets injured in my unit?
- Can I afford additional living expenses if my unit is temporarily unlivable?
If the answer to any of these questions is no, consider purchasing renters insurance.
What Does Renters Insurance Cover?
Renters insurance covers your unit's contents, liability expenses, and loss of use expenses if a covered peril causes the damages. Here is a list of named perils in a standard renters insurance policy:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riots
- Aircraft
- Vehicles
- Smoke
- Vandalism
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing, cracking, burning, or bulging
- Freezing
- Sudden and accidental damage due to short-circuiting
- Volcanic eruption
Bodily Injury Protection for Guests
Renters liability insurance covers bodily injury to guests while they're in your home. This may include falls, dog bites, and other unintentional or accidental injuries. Keep in mind that renters liability insurance does not cover you or your family living in the unit.
Property Damage to Others (Neighbor's Property, Common Areas, etc.)
Most renters liability insurance policies cover unintentional damage you cause to another person's belongings.
This also includes damage that begins in your home and affects the homes around yours. For example, if your child accidentally throws a football through your neighbor's window and the window needs to be repaired.
Furthermore, renters liability insurance doesn't typically cover damage or injuries that take place in shared common areas of a complex. Instead, these instances may be covered by your landlord's liability insurance.
Legal Fees & Medical Bills Coverage
Renters liability insurance can help pay for legal fees and medical bills if you are sued or someone incurs medical bills from injuries you caused. It's important to make sure you choose a policy with enough liability insurance to cover potential costs.
What Renters Insurance Doesn't Cover
Pet bites are typically covered under your policy's personal liability coverage. However, some renters insurance companies will not offer coverage for certain dog breeds and exotic pets. If your pet bites someone, you should notify your renters insurance company immediately. Some states have laws that if a pet bites, the owner is strictly liable.
Pet liability coverage (which is not pet insurance) covers damage or injury your pet causes to someone, but not damage to you or your personal property. The limit to this standard personal liability coverage depends on your policy and insurance carrier, but is usually around $100,000.
You may also consider an umbrella policy for additional liability coverage available as an add-on rider to your renters insurance that kicks in after you have used up your personal liability coverage limit. If you have a restricted dog breed and cannot get an umbrella policy to cover your pet, you might consider canine liability insurance. Canine liability insurance, a separate policy, offers coverage if your dog bites or attacks someone.
How Much Renters Insurance Coverage Do You Need?
Minimum Liability Coverage Requirements
Minimum renters insurance liability coverage amounts typically have a $100,000 limit. However, experts at the III recommend having at least $300,000 worth of liability protection.
Liability coverage does not pay medical bills for your own family or pet.
How to Calculate the Right Renters Insurance Amount
While renters insurance may seem straightforward, many individuals are underinsured, according to Stella. For instance, liability is an essential aspect of coverage. Allowing yourself more coverage doesn't always result in significant premium increases, but many renters opt for the cheaper option.
It is worth getting more coverage as you need so that you aren't underinsured. Consult a professional like your insurance provider or an independent agent before purchasing a policy to determine how much coverage is enough.
When to Consider Additional Umbrella Insurance
It's a good time to consider umbrella insurance when the liability insurance offered by your insurer doesn't meet your coverage needs. Umbrella liability insurance provides an additional layer of protection from expensive claims or lawsuits.
This extra liability coverage usually begins when your existing renters liability insurance policy has reached its maximum limits. However, be aware that an umbrella policy will also come with its own limits.
How Much Does Renters Insurance Cost?
Average Renters Insurance Costs
In the U.S., the average renters insurance policy cost $170 yearly or just over $14 monthly, according to the most recent data from the National Association of Insurance Commissioners. It's relatively inexpensive compared to other types of home insurance.
Mississippi has the most expensive renters insurance at $252, and North Dakota has the cheapest at $115, according to the III.
Factors that determine your premium are the amount of coverage you need, where you live, if you own a pet, and if you have a good credit score.
If you rent in disaster-prone areas — flood zones, hurricanes, tornadoes, wildfires, mudslides, hail, and earthquakes — you may need to purchase additional coverage, which may increase your rates.
Factors That Affect Liability Insurance Premiums
Several factors can influence how much your renters insurance with liability coverage will cost. These factors often include:
- Location
- Coverage amounts
- Your deductible
- Your credit score
- Your claims history
How to Save Money on Renters Insurance with Liability Coverage
Renters insurance providers have significantly fewer discounts and saving opportunities than homeowners insurance because coverage is already affordable. However, there are still little-known ways to reduce your premiums without lowering your coverage.
- Shop around annually: Shop and compare quotes annually to see if you can get a better deal elsewhere at the same coverage. Note that some insurers may charge you a fee for early cancellation.
- Increase your deductible: Your deductible can impact how much you'll pay for your insurance premiums. The higher the deductible, the lower your monthly rate. Be aware that deductibles can be subtracted from your total coverage amount.
- Take advantage of discounts: Get savings on your insurance premiums by bundling multiple products like your auto insurance policies. Discounts can also largely curtail your premiums. " Since auto insurance can be a more costly policy, the discounts one receives on this policy can help offset your overall household cost of (renters) insurance," says Stella.
- Have good credit: Insurance providers use credit-based insurance scores when determining how much you will pay for insurance. These scores calculate your risk and your likelihood of filing a claim. A good credit score (above 700) could qualify you for lower premiums.
How to Purchase Renters Insurance
When it comes to buying renters insurance, it is important to shop around for a provider that'll give you the most value for your buck. Here are four steps to purchase renters insurance.
Step 1: Get a copy of your landlord's renters insurance policy
Your landlord's insurance policy will typically cover only the structure of your unit. You're responsible for ensuring your personal belongings and having liability and loss of use coverage. Your landlord's policy may not cover certain damages, such as wear and tear of appliances. Be sure to speak to your landlord and get a copy of their renters insurance policy to determine what your landlord's policy covers.
Step 2: Determine what needs coverage
Create an inventory that details all the contents of your home, from your furniture to your clothing. A home inventory will make filing a claim much easier and allow you to determine how much coverage you'll need to replace those items if damaged.
High-valued items like expensive jewelry and electronics are targets of theft and are often susceptible to damage by other perils. Expensive items usually have sub-limits between $1,000 to $2,000 in your renters insurance policy, according to Stella. Protect your investments by purchasing a special personal property floater for belongings that need significant coverage.
You'll also want to consider your lifestyle. You might need more liability coverage under particular circumstances, like having a pet or being in a household with teenage drivers. In that case, consider umbrella insurance, which offers more liability coverage.
Your lifestyle budget will also determine how much you might need for loss-of-use coverage. You'll probably need more coverage than you usually spend every month. Consider keeping a record via bank statements or receipts of your normal living expenses before a loss occurs. Your insurance provider will usually have you fill out an application detailing your average monthly spending on essential expenses if you need to file a claim.
You'll also want to consider any additional riders you may need for your circumstance. For example, if you live near a body of water, you may want to consider adding flood coverage to your policy, which may cost extra.
Step 3: Gather quotes from at least three insurance companies
The III recommends gathering quotes from at least three different companies. Consider asking your friends and relatives for insurance recommendations to begin your search. Alternatively, you could use an independent agent or online brokerage to pull multiple quotes at once.
It is important to know what's going into your policy to make the best apples-to-apples comparison. Ensure coverage types, deductibles, and coverage limits are the same across all policy estimates. You don't want to be underinsured if you need to replace your belongings or get sued for accidents on your property.
You can start your search by checking out our picks for best renters insurance companies in 2025.
Step 4: Choose an insurance company and apply for coverage
Before you purchase a policy, research the trustworthiness of the company you choose. An insurer's financial strength, rated by independent agencies, can help you determine if it can compensate you for a claim when you need it. AM Best assigns insurance companies to letter grades from A+ to F. If a company is rated anything below a B, it is not financially stable and cannot pay claims reliably at any given time.
You can also check a company's trustworthiness by looking at customer satisfaction. The JD Power's home insurance customer satisfaction survey ranks major insurance companies on a 1,000-point scale.
You'll need a few pieces of basic information to complete a renters insurance application.
- Name
- Date of birth
- Email address
- People living in your apartment
- Address/location of the insured property
You may also need to provide a list of the safety features in your rental, how close your unit is to a fire station, and your insurance history.
After filling out an application, you'll get a quote estimate. Ensure all your information is correct, and adjust your coverage as needed. You can either pay your premiums in monthly increments or upfront.
Renters Insurance vs. Additional Coverage Options
When to Add Personal Property or Flood Insurance to Your Renters Policy
Unlike a standard homeowner insurance policy, renters insurance will not cover dwellings. Your landlord's insurance policy should cover that instead.
Renters insurance does not cover floods, earthquakes, wear and tear, or any peril not listed in your policy. Unlisted perils will require separate coverage or a floater. Roommates are also not covered under your policy, so each roommate should get their own renters insurance.
How to Increase Your Liability Coverage Limits
You can increase your liability coverage limits by contacting your renters insurance provider directly. If your current insurer doesn't provide as much coverage as you need, you can look into purchasing umbrella insurance.
Umbrella insurance provides you with additional liability coverage beyond what your standard renters insurance policy offers.
How Bundling Renters & Auto Insurance Can Save You Money
Many major insurers offer discounts to customers who purchase multiple policies. This is usually referred to as a multi-policy discount.
You can contact your current insurer to ask about bundling insurance options or request quotes for bundled insurance policies from new insurance providers. This is also a good time to ask about other discounts the insurer offers.
Compare Renters Insurance Options
FAQs
What is renters insurance?
Renters insurance is the part of a renters insurance policy that covers bodily injury and property damage that you or your family cause to others while renting your home or apartment.
How much liability coverage should I get with my renters insurance?
Most renters liability insurance policies start at $100,000. However, most experts recommend opting for at least $300,000 to $500,000 for better protection.
Does renters insurance cover my roommate?
No, renters insurance doesn't typically include roommates unless they are explicitly named in your policy. Each roommate should have their own renters insurance policy for full coverage protection.
How much does renters insurance cost?
The average cost of renters insurance, including liability coverage, in the U.S. is $170 yearly or around $14 monthly. Prices vary depending on coverage and location.
Where can I find renters insurance with liability coverage?
Most standard renters insurance policies include liability coverage. Popular insurance providers, such as Allstate and State Farm, offer renters insurance with the option to customize liability limits.
