Skip to Content

Is renters insurance worth it?

Many people believe the benefits of renters insurance outweigh the costs. Here's how to decide if it's right for you.

Article:

Updated: Published:

Reviewed by: Editorial contributors

Are you on the fence about renters insurance?

If so, you're not alone. Many people have concerns about the costs versus benefits of renters insurance, and whether it's really worth paying for.

Some people believe it's too expensive and their belongings aren't valuable enough to justify the cost. In reality, your stuff may be worth more — and renters insurance probably costs less — than you think.

Then there are those who think their landlord's policy covers all property damage, or they should only be worried about their personal possessions. Unfortunately, these misconceptions can result in expensive mistakes.

When it comes to renters insurance, it helps to know who needs it, how it works, how much it costs and what factors can influence your premiums. With all the right information, you'll be better equipped to decide whether it's right for you.

Who needs renters insurance?

If you rent the home or apartment you live in, you may need renters insurance — whether it's required or not.

For parents of young adults, first-time renters insurance can cover your child after they move out of your home, into a college dorm or their first apartment.

It may also protect your child's property while their possessions are being moved or in storage, and even when they're traveling abroad.

For military renters, this type of policy can help protect your belongings when you're deployed, at home or living on or off a military installation. Renters insurance may also cover military uniforms, equipment and gear. Plus, you can easily transfer your policy if you move. Remember, basic allowance for housing (BAH) no longer covers renters insurance.

One more thing. Don't make the mistake of confusing renters insurance with rental property insurance. Rental property insurance, which also may be called landlord's insurance, covers the property owner's damages in the event of a loss or damage. It will not cover your personal possessions.

How does renters insurance work?

Like other types of insurance, the purpose of renters insurance is to protect against financial loss due to theft or damage in a variety of situations. While every policy is different, renters insurance typically covers events such as:

  • Theft and vandalism.
  • Smoke or fire damage.
  • Certain types of water damage.
  • Accidents or injuries in your home.

Standard USAA Renters Insurance includes earthquake and flood coverage, while other renters policies may not. It's important to check what your things are — and are not — covered for.

Types of renters insurance

Renters insurance generally includes two main types of coverage: personal property and liability. You may choose to get just one or the other depending on your landlord's requirements and your needs. Here's what each type of coverage is for.

Personal property coverage

Renters insurance may cover your personal belongings, such as furniture, clothing, jewelry, household goods, bicycles, cameras, musical instruments, sports equipment, guns, antiques and electronics.

If your property is stolen or damaged, your renters policy may cover the cost of repairing or replacing the item.

Liability coverage

If you're held legally responsible for property damage or another person's injuries, renters liability coverage can help protect your finances. This includes current assets and future income.

Certain living situations — like having a pet or living with roommates — could increase your risk of being held liable. You could also be held responsible if an incident in your home damages a neighbor's apartment.

It's a good idea to maintain liability coverage equal to at least your net worth — everything you own minus everything you owe money on.

How much does renters insurance cost?

Renters insurance can be budget friendly, especially when compared with homeowners insurance. USAA offers a renters insurance policy for as little as $10 a month.‍ ‍ See note 1 That's about the price of a pizza, or just 33 cents per day.

Your premium depends on how much coverage you choose and your deductible. If you choose a higher deductible, you may pay more out of pocket if you file a claim, but you'll likely have a lower premium. If you have a lower deductible, you'll pay a bit more each month but won't have higher out-of-pocket costs when you file a claim.

Other things to consider

When you purchase a renters insurance policy, there are many factors that may make it more likely for you to file a claim. These things may also impact your monthly premium.

  • Property type. Do you live in an apartment or a single-family home? How big is it? Larger square footage and more personal property typically come with higher insurance costs.
  • Location. If you live in an area with a higher risk of loss or damage — whether from severe weather or crime — you'll likely pay more for renters insurance. But you may also pay less if your neighborhood is closer to a fire or police station.
  • Amount of coverage. The more coverage you need, the more you'll pay in premiums. If you own valuable property, like collectibles or antiques you want to protect, you may want to carry a separate policy for those things.
  • Liabilities. As previously mentioned, some circumstances may increase your liability, such as living with roommates or owning a dog.

3 ways to decrease renters insurance costs

Although renters insurance rates are low for most people, consider these three ways to save on the cost of your policy.

  1. Are you eligible for discounts?
    You may get a discount on your policy if you add devices like an alarm system, smoke detectors or deadbolt locks. Make sure to check with the property owner for permission before you add things to the home. These measures can help you stay claims-free and keep your premium low. With USAA, military renters also receive a discount of up to 28% when living on base or post.‍ ‍ See note 2
  2. Can you bundle it with other policies?
    When you bundle renters and auto insurance, you can often get a discount or save on your premium.
  3. Are you comfortable with a higher deductible?
    If you want to lower your monthly premium, you can choose a higher deductible. But keep in mind if you have to file a claim, you'll have to pay more out of pocket, before your insurance kicks in. Make sure you have an emergency fund that can cover your deductible.

In most situations, the advantages of being covered when renting are worth the expense. Proactively protecting your assets is a smart move — and can help you save in the long term.

Help protect your possessions.

Renters insurance helps protect you, your belongings and your finances — all at a surprisingly low cost.