Renters insurance covers three things: your belongings, your liability if you hurt someone or damage their property, and the extra cost of living somewhere else if a fire or other covered loss makes your home unlivable. In 2023, the average renters policy cost $173 a year, about $14.40 a month, according to the National Association of Insurance Commissioners’ latest report, published in July 2026. Your landlord’s insurance covers the building. It does not cover your things.
What a renters policy covers
A standard renters policy has four parts:
- Your belongings. Furniture, clothes, electronics and the rest, against the causes of loss listed in the policy. The Insurance Information Institute’s list starts with fire, smoke, lightning, vandalism, theft, explosion, windstorm and some kinds of water damage.
- Liability. If you are responsible for someone’s injury or for damage to their property, including damage caused by your pet, this pays their claim and your legal defense. Limits generally start at about $100,000.
- Additional living expenses. Hotel bills, a temporary rental and the extra cost of eating out while your home is repaired after a covered loss.
- Medical payments to others. Small medical bills for a guest hurt in your home, whoever was at fault.
What it leaves out
- The building. Walls, floors, the roof and the landlord’s appliances are the landlord’s to insure and to fix.
- Floods and earthquakes. Both need separate coverage. The National Flood Insurance Program sells renters contents coverage of up to $100,000, and a new flood policy usually takes 30 days to start.
- Valuables above the limit. Theft of jewelry and similar items is often capped, commonly at about $1,500 in total. A scheduled item, sometimes called a floater, covers a ring or a camera for its full value.
- Your roommate’s things, unless they are named on your policy.
- Wear and tear, pests and mold that build up over time. Insurance is for sudden, accidental losses.
What it costs
The NAIC’s report breaks the average yearly premium down by the amount of property coverage:
| Property coverage | Average yearly premium, 2023 |
|---|---|
| $10,000 to $14,999 | $140 |
| $15,000 to $19,999 | $148 |
| $20,000 to $24,999 | $156 |
| $25,000 to $29,999 | $164 |
| $30,000 to $34,999 | $185 |
| $50,000 to $59,999 | $205 |
| All renters policies | $173 |
These are national averages. Your price depends on your state and ZIP code, the coverage amount, the deductible and your claims history. When you budget for a move, count it with the rent: the rent-to-income calculator shows the most rent your income supports, and $15 a month of insurance comes out of the same paycheck.
How much coverage to buy
Walk your home room by room and add up what it would cost to replace everything today.
A one-bedroom: furniture $6,500, electronics $3,800, clothes and shoes $4,500, kitchen $1,700, everything else $2,000. Total: $18,500.
A $20,000 policy covers it with a little room to spare. In the NAIC’s figures, that band averaged $156 a year.
Then pick how claims are paid. Actual cash value pays what a used item was worth, after depreciation. Replacement cost pays what a new one costs. The Insurance Information Institute puts replacement cost at about 10% more.
An example: a laptop bought three years ago for $1,400 is stolen. A comparable new one costs $1,200, and the deductible is $500.
If the insurer values the old one at $560 after depreciation, actual cash value pays $560 − $500 = $60. Replacement cost pays $1,200 − $500 = $700.
A higher deductible lowers the premium but makes small claims pointless. Pick one you could pay tomorrow without borrowing.
Questions to ask before you buy
Get two or three quotes for the same coverage and the same deductible, then ask each insurer:
- Does it pay replacement cost or actual cash value?
- What is the liability limit, and can it go higher?
- Which kinds of water damage are covered, and which are not?
- What are the limits for jewelry, electronics and bikes?
- Can my landlord be listed as an interested party?
When a lease can require it
The Insurance Information Institute notes that many landlords require renters insurance before signing a lease, and in most private rentals, that is allowed. The requirement usually sits in the lease or a lease addendum and asks for:
- A minimum liability limit, often $100,000.
- The landlord listed as an interested party, so the insurer tells them if the policy lapses. That gives the landlord notice, not coverage.
- Proof at signing, usually the declarations page.
Two limits on the requirement. First, it should apply to every tenant in the same way. Second, rules can differ in subsidized and public housing, and state or local law can add its own; check yours before you sign or, as a landlord, before you require it.
What a requirement cannot do is move the landlord’s duties onto you. The warranty of habitability still makes the landlord fix a burst pipe, a broken furnace or a leaking roof. Your policy pays for your ruined couch; it does not pay for their repair.
Two claims, step by step
A fire next door. On Saturday, January 16, 2027, a fire in the next unit fills yours with smoke. You stay in a hotel for three weeks while the building is cleaned. Your policy pays to clean or replace your belongings, less the deductible, and the extra cost of the hotel and meals above your normal spending. The landlord’s policy pays for the building. Whether rent is owed while you cannot live there depends on your lease and your state’s law.
A fire you started. A pan catches fire and $8,000 of cabinets burn. The landlord’s insurer may pay for the repair and then seek the money from you. Your liability coverage answers that claim.
Your deposit is not insurance
Your security deposit protects the landlord, not you. It covers unpaid rent and damage beyond normal wear and tear, and many states cap it at one or two months’ rent. It never pays for your things.
This is general information, not legal or insurance advice. Read your policy’s declarations page and exclusions, and ask the insurer about anything that matters to you before a loss, not after.
Questions people ask
How much does renters insurance cost?
The average renters policy cost $173 a year in 2023, about $14.40 a month, according to the National Association of Insurance Commissioners’ report published in July 2026. Policies with $15,000 to $19,999 of property coverage averaged $148; $50,000 to $59,999 averaged $205.
Can my landlord require renters insurance?
In most private rentals, yes: the lease or an addendum can make it a condition, often with a minimum liability limit and the landlord listed so they hear if it lapses. Subsidized housing and some state or local rules can differ. The requirement should apply to every tenant alike.
Does renters insurance cover my roommate’s things?
Usually not, unless your roommate is named on your policy. Separate policies are the simpler choice: each person picks their own coverage, and one person’s claim stays off the other’s policy. Check who is covered on the first page of the policy, called the declarations page.
Written by LoomLease editors. Published September 30, 2026. Plain English, not legal, tax or financial advice: your lease, your state’s law and a professional who knows your situation decide what applies.