What is Renters Insurance & Why Do I Need It?

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

What is Renters Insurance
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Read our Advertising Disclosure.

There is insurance for many parts of life, like your home, car, and even life. But what if you rent your home or apartment instead of owning? You can get renters insurance, but you should know what it is and the coverage it offers before you do that.

Renters insurance is a type of insurance that protects renters' homes and their belongings. With this insurance, renters will be covered should there be an accident (to them or their guests), theft, or natural disaster that damages their homes or belongings.

This article will explain the types of renters insurance, what it covers, and what it does not cover. You will also learn why you should buy renters insurance and what resources you can use to learn more about renters insurance. Keep reading.

Why I like Lemonade:

Get the best-loved renters insurance in America. Protect your stuff in seconds. Starting from $5/month.

>> Read our full review

Service: Renters Insurance

Price: Starts at $5/mo.

Promotion: Lower rates if you bundle

Types of Renters Insurance Coverage

If something happens in your home to a guest, your personal belongings are damaged, or you cannot live in your home, your renter's insurance will cover you financially. 

There are 3 types of coverage offered with your renter's insurance. They are:

  • Personal property
  • Liability insurance
  • Additional living expenses

Each one covers a different umbrella of events that could affect you financially as a renter.

Personal Property

As the name suggests, personal property coverage is for all of your belongings. 

Here is what personal property coverage generally covers: 

  • Furniture 
  • Electronics 
  • Clothing 
  • Bedding 

There are some exceptions to what personal property will cover.

First, some items have a higher value than what your policy will cover. Say you own a collector's item like a rare artwork piece. A standard policy may not cover rare items like this since it costs much to replace. 

You would need to add on additional coverage.  Other expensive items like high-end electronics or equipment may not be covered, either.

Say you are a photographer and have thousands of dollars worth of camera and editing equipment. Your equipment would not be covered by a standard policy either, so you would need to get special coverage for it or increase your coverage amount if your insurance company would cover it. 

The important part of choosing your personal property is making sure that you can replace all your belongings if necessary. Consider everything you own and estimate how much it would cost to replace it, then add some extra, and that amount should be your minimum coverage amount.

Liability Insurance

The liability part of your renter's insurance policy is basic coverage for any injuries that happen at home. If someone, like a guest, hurts themselves, your liability coverage will take care of their medical expenses, legal fees, and anything else necessary to cover their injuries.

Additionally, your liability coverage may cover damage to your property covered by guests in your home. If you have expensive belongings in your home, you may want to consider a higher liability policy.

Sometimes, there are state or local minimum limits you must have regarding liability coverage. Or, if you live in an apartment or condo building, your building management or association may have the minimum coverage required.

Additional Living Expenses

Suppose your home or apartment is damaged and needs repairs or is otherwise unlivable, then you will need somewhere else to stay. If this happens, your additional living expenses are covered by your renter's insurance. 

This third section of renters insurance coverage includes hotel costs and any other expenses you would not otherwise have, like meals, that you have to pay when you cannot live in your home.

Policy Add-ons

If the renters’ insurance coverages mentioned above do not seem like enough for your needs, most insurance companies will let you add on a few other types of coverage. 

First, replacement cost coverage makes it easier to replace your belongings because they will pay for the actual cost to replace that item. Without this, most renter's insurance policies will pay you based on the actual value of your items, not the new value. 

Suppose you own an iPhone that’s 5 years old. Your insurance company will pay you based on the old phone's depreciated value. However, suppose you have replacement cost coverage.

Your insurance company will pay for you to get a new phone, regardless of your old phone’s value.

Another type of coverage that you can add is for your more expensive or valuable items. Here are some items that you likely need to add separately if you want them covered: 

  • Jewelry 
  • Artwork or other valuable collections 
  • Money (coin collections, checks, gift cards) 
  • Boats and cars 

These items are not covered by standard insurance policies, whether explicitly excluded or too expensive. Suppose something happens to your home and you want these things covered.

You must add them to your policy separately. 

What Does Renters Insurance Cover?

Renters insurance covers various events, like accidents, certain weather damage, such as one caused by lightning, and theft. Some extremely unlikely events are also covered. 

16 specific events are covered by renters insurance. This section will break them down.

Remember that everything in this section is a general overview of what most standard renter's insurance policies cover. If there is something specific you need to be covered or just want to see what is covered by your renter's insurance, you need to check your policy or ask your insurance agent directly. 

You can save money by getting insurance quotes from different agencies if you are still looking for renters insurance, as different agencies offer different options and policies.

Natural Events

Below are examples of natural event damage coverages offered by renters insurance covers:

  • Fire or lightning: Suppose lightning strikes your house, or your house catches fire. Whether you are at fault or not, renters insurance will cover you.
  • Windstorm or hail: Renters insurance can also usually cover you if strong winds have damaged your home or belongings. Your renters' insurance, however, may not cover damages caused by tornados or hail.
  • Smoke: You can also get coverage for damages caused by smoke, whether it is from a fire in your house or nearby. 
  • Volcanic eruption: You can also get coverage for your home or belongings for damages caused by volcanic eruptions.
  • The weight of ice, snow, or sleet: Suppose your home or belongings have been affected by heavy snow or ice storm. Your insurance will get you covered. 

Human-created Events

Renters coverage also protects renters’ homes, or belongings should human-created events occur:

  • Explosion: Renters insurance offers protection for any type of explosion.
  • Riot or civil commotion: Damage caused by civil unrest or similar events is covered. 
  • Damage caused by aircraft: Renters are covered if an aircraft lands on or otherwise damages your home, destroying your belongings. 
  • Damage caused by vehicles: Similar to above, but the damage is caused by cars, trucks, or other land vehicles. 
  • Vandalism or malicious mischief: Suppose you face losses from someone pranking your home or other mischievous events. Your insurance company will cover you for such a situation.
  • Theft: You are covered if someone breaks into your place and steals your belongings. Most renter's insurance policies also cover you if your belongings are stolen outside of your home. For example, if you are at school and your laptop is stolen.
  • A falling object: This refers to an object that falls on your home, whether natural or not. You would even be covered if there was a meteor shower. 

Household Events

  • Accidental discharge of water or steam from within certain household systems or appliances. 
  • Sudden and accidental tearing apart, cracking, burning or bulging of certain household systems. 
  • Freezing of certain household systems or appliances. 
  • Certain sudden, accidental damage from artificially generated electric currents. 

This category refers to any damage from your home or appliances. Whether a pipe bursts, your oven explodes, or there is an electric fire, your renter insurance will cover whatever damages regarding your possessions.

What Does Renters Insurance Not Cover?

The previous section covered the situations in which renters insurance provides coverage. However, not all your belongings will be covered by renters insurance. So what does renters insurance not cover? 

Renters insurance does not cover damages to your home itself, damages and losses from natural disasters, or any injuries your pets may face after an incident involving renters insurance. 

Landlord Insurance Coverages

Your landlord should also hold insurance, which covers damages to the home or apartment they own. Say your roof is damaged in a fire. You are not responsible for covering that. Your landlord is.

If they have landlord insurance, the fire damage should be covered by that. 

Natural Disasters

Natural disasters are rarely covered by standard insurance plans, including renters insurance. Events like hurricanes, tornados, earthquakes, or flooding are not too common, but they can cause significant damage if they do occur. 

Insurance companies cannot predict how often natural disasters can occur, how much damage they cause, and how much it costs to replace whatever was damaged.

Therefore, they do not cover the unpredictability of natural events unless you are willing to pay a higher premium. 

If you want to protect your belongings from a natural disaster, you need to add special coverage to your policy. Sometimes this is possible through your renter's insurance agent, but sometimes you need to go through an insurance brokerage for extra coverage like this. 


While your liability will cover any medical costs for you or any guests injured in your home, your pets are not covered by this. If you want your pets to be covered, you need to get separate insurance for them.

Not only does pet insurance cover any accidents like renters insurance covers, but you can also get coverage for their normal medical checkups or other health issues.

Why You Need Renters Insurance

Think about how much stuff you have in your house and how much it would cost you if you suddenly had to replace everything. It would probably be more than you would initially expect. 

Without renters insurance, you would need to pay for all of your belongings unexpectedly if an accident or fire destroyed them or they got stolen. But if you have renters insurance, you do not have to worry about paying for your loss or damaged belongings. 

Renters insurance typically covers between $10,000 to $100,000 of belongings, which can be a huge help if you need to replace all your belongings, especially furniture and electronics. 

Furthermore, renters insurance is cheap relative to other insurance policies like:

According to NerdWallet, the national average cost of renters insurance is $14 per month or $168 per year. 

The coverage limits above are the standard coverage amount of 30,000 in personal property and 100,000 in liability with a $500 deductible. These coverage options are the minimum recommended by companies.

You can always add more coverage for an extra cost if you feel it is necessary. 

Is Renters Insurance Worth It?

Renters insurance is important for any renter to have. There are various events like weather damage, theft, and many accidents that can cost you financially. 

With renters insurance, you have protection for your possessions and any medical accidents your guests may face if something happens in your home. If you do not have renters insurance, you can face thousands of dollars in personal property replacement or medical and legal fees for events you are liable for.

Lemonade Renters Insurance

Lemonade is America's top-rated insurance company that protects your family and your belongings—at home, and everywhere else.

Lemonade Insurance icon

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

More Posts

You May Also Like

what is insurance


What is Insurance and How It Works?

PolicyMe review


PolicyMe Review

best life insurance companies


Best Life Insurance Companies

LeapLife Insurance


LeapLife Insurance Review