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SAVING Is Renters Insurance Worth It? (Yes, and Here's Why) 2026-02-27 · 4 min read · renters insurance · insurance basics · personal finance

Is Renters Insurance Worth It? (Yes, and Here's Why)

saving 2026-02-27 · 4 min read renters insurance insurance basics personal finance protect your money renter tips

Renters insurance costs the average person $15–$30 per month. For that, you get protection against theft, fire, water damage, and personal liability — for everything you own. Despite this, only about 55% of renters have it.

If you're among the 45% who don't, here's why you should reconsider.

What Renters Insurance Actually Covers

Personal property — Your stuff: electronics, furniture, clothing, appliances, jewelry, and more. If your apartment is burglarized, catches fire, or is damaged by a burst pipe, renters insurance pays to replace your belongings (up to your coverage limit).

Common covered perils include:

Personal liability — If someone is injured in your apartment or you accidentally damage someone else's property, liability coverage pays for legal defense and settlements. Standard policies include $100,000–$300,000 in liability coverage.

Example: A guest trips on your stairs and breaks their wrist. Medical bills and potential legal costs could easily exceed $10,000. Liability coverage handles this.

Additional living expenses (ALE) — If your apartment becomes uninhabitable due to a covered event (fire, major water damage), ALE covers temporary housing, meals, and other costs while repairs happen.

What Renters Insurance Doesn't Cover

Your landlord's structure — Your landlord's building insurance covers the building. Renters insurance covers your stuff inside it.

Floods and earthquakes — These typically require separate policies. If you're in a flood zone or earthquake region, check whether you need additional coverage.

Vehicle damage — Car insurance covers your car. Renters insurance covers what's in it (some policies cover property stolen from a car up to a limit).

High-value items above sublimits — Many policies cap coverage for categories like jewelry ($1,500), electronics ($1,000–$2,000), or cash ($200). If you have significant valuables, ask about scheduling them separately.

Roommate's belongings — Standard policies only cover the named insured and immediate family members. Roommates need their own policies.

What Does It Cost?

The national average for renters insurance is about $15–$25/month, depending on:

A basic policy with $30,000 of personal property coverage and $100,000 liability typically runs $10–$20/month in most markets.

Actual vs. Cash Value Coverage

One important choice: replacement cost vs. actual cash value.

Actual cash value (ACV) pays what your belongings are worth today, factoring in depreciation. A 4-year-old laptop that cost $1,200 might be worth $300 by ACV. This is what most cheap policies offer.

Replacement cost value (RCV) pays what it costs to replace the item with a new equivalent. That same laptop would get you $1,000–$1,200 to buy a new one.

RCV costs slightly more per month but is almost always worth it. With ACV, you'll often receive far less than you expect when you actually file a claim.

How Much Coverage Do You Need?

Take a rough inventory of your belongings:

Most people are surprised how quickly it adds up. A laptop ($1,000), TV ($500), iPhone ($800), bedroom furniture ($1,500), and clothes ($3,000) is already $7,000. Most renters have $15,000–$50,000 in belongings when they actually count.

Match your coverage limit to your actual inventory.

The Liability Protection Is Underrated

Personal property gets most of the attention, but liability protection may be more valuable.

A lawsuit from an injured guest, accidentally flooding your neighbor's apartment, or a dog bite could result in tens of thousands in legal costs and settlements. Most renters don't have $50,000+ sitting around to cover an unexpected liability event.

$100,000 in liability coverage for $2–5/month (the incremental cost vs. basic policies) is remarkable value.

How to Get Renters Insurance

Bundle with auto — If you have car insurance, ask your insurer about adding renters insurance. Bundling typically saves 5–15% on both policies.

Compare quotes — Lemonade, Progressive, State Farm, Allstate, and many regional insurers all offer renters policies. Getting 3 quotes takes 20 minutes and can save $5–$10/month.

Increase your deductible — Raising your deductible from $250 to $1,000 lowers premiums meaningfully. If you have emergency savings to cover the deductible, this is a smart trade.

Look for discounts — Ask about discounts for:

What to Do If You Need to File a Claim

  1. Document everything before you file — photos and video of damage, a list of lost/damaged items with approximate values
  2. File a police report if the loss involves theft
  3. Contact your insurer promptly — most have 24/7 claim lines and apps
  4. Keep receipts for any temporary expenses if ALE coverage applies

The Bottom Line

If you don't have renters insurance, you're one fire, break-in, or lawsuit away from losing everything you own with no protection. The math doesn't support going without it.

$15–$20/month is less than most people spend on coffee. It's a remarkable amount of protection for the cost, and it's one of those financial moves that's objectively correct for almost everyone who rents.

Get quotes from 2–3 insurers this week. You can usually have coverage in force within an hour.