Your renters insurance questions answered

What is renters insurance?

Renters insurance can help protect you and your stuff if the unexpected happens. This can include helping to pay for damages caused by things like

• Fire
• Theft
• Weather

Renters insurance can also help if someone is accidentally injured at your rental, including helping pay for things like

• Medical expenses
• Legal fees if you're sued

Is renters insurance worth it?

Yes, people may find that renters insurance is worth it because a standard policy can protect thousands of dollars in personal belongings for as little as $5 a month. Without it, a single theft, fire, or water damage event could leave you paying out of pocket to replace furniture, electronics, clothing, and more.

What does renters insurance cover?

Renters insurance protects more than just your stuff, it also protects you.

For example, it may pay for things like:

• Living expenses if you can't stay in your apartment due to a fire or other disaster
• Injuries to someone hurt in your home
• Damages caused by you accidentally leaving your sink running and overflowing into your neighbor's apartment below

It can also pay for repairs, medical bills, legal costs, and other damages.

What is not covered by renters insurance?

While renters insurance covers a wide range of situations, it doesn't cover everything. Common exclusions include:

• Flood damage (typically requires a separate flood insurance policy)
• Earthquake damage (may require an add-on endorsement)
• Damage caused by a roommate not listed on your policy
• Pest infestations or normal wear and tear

For a full breakdown of exclusions, read our complete guide: What renters insurance doesn't cover.

Is renters insurance required?

Renters insurance is not required by law, but your landlord may require it as a condition of your lease. Many property management companies and individual landlords include a renters insurance requirement to protect both parties. Even when it's not mandated, carrying a renters policy is a smart financial decision since it protects your belongings, shields you from liability claims, and covers temporary housing costs if you're displaced from your home due to a covered event.

How much does renters insurance cost?

Renters policies can be as low $5 a month, a fraction of what it may cost to replace even one of your stolen or damaged items. Although rates vary by state and region and the amount of coverage you choose, renters insurance is generally one of the cheapest types of insurance.

Pro tip: You may be able to save money by bundling your renters insurance with your car insurance or with your pet insurance.

What kind of renters insurance should I get?

Choosing the right renters insurance comes down to understanding your coverage needs and your budget. Two things to consider when looking into renters insurance:

• Your deductible - When you file a claim, the deductible is the amount you pay before your insurance kicks in. Ask yourself how much you could realistically afford out of pocket in an emergency. Typically, a higher deductible means lower monthly premiums — and a lower deductible means higher costs.
• Your coverage level - Coverage level is determined by how much your belongings are worth. This includes everything from your clothing and furniture to TVs and bakeware. This breaks down into actual cash value (ACV) or replacement cost. ACV reimburses you for the depreciated value of your items, while replacement cost covers what it would cost to buy brand-new replacements. Replacement cost coverage is available as an endorsement.

You may also want to consider optional add-ons to your policy, such as:

• Blanket jewelry coverage
• Earthquake coverage
• Personal property coverage
• Identity theft coverage
• Water back up coverage

Actual cash value (ACV) vs replacement cost

ACV and replacement cost are two different ways insurers calculate your claim payout. The option you choose affects both your premium and what you'd receive after a covered loss.

How Actual Cash Value (ACV) works

ACV reimburses you for the current depreciated value of your belongings at the time of a covered loss. Because depreciation is factored into the payout, ACV means a lower monthly premium for renters, but with ACV there may leave a gap between what you receive and what it actually costs to replace your items. ACV may be best for renters on a tighter budget.

How Replacement Cost works

With a Coverage C Replacement Cost endorsement, replacement cost coverage reimburses you for the full cost to replace your belongings with brand-new items of similar kind and quality without factoring in depreciation. You'll receive up to 100% of the replacement price at today's market rates (up to your policy limit). With Replacement cost, monthly premiums are typically a bit higher, but the protection is more complete. Replacement cost is best for renters looking for maximum protection.

Real-world example of ACV vs. Replacement Cost

Let's say a thief breaks into your apartment and steals your laptop. You originally purchased your laptop three years ago for $1,200.

• With ACV coverage, your insurer would factor in three years of depreciation and estimates the laptop's current value is $500. After your $250 deductible, you would receive $250.
• With replacement cost, your insurer would cover the cost of a comparable new laptop at today's price of $1,200. After your $250 deductible, you would receive $950.

Renters insurance with Liberty Mutual

Liberty Mutual makes it easy to get renters insurance coverage that fits your lifestyle and your budget — with options to customize your policy, add endorsements, and bundle for additional savings.

Getting a policy is easy and affordable, start your renters insurance quote now!