Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 11, 2021

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A new survey from InsuranceQuotes.com revealed that six out of 10 U.S. adults who rent don’t have renters insurance.

This includes both those who rent apartments and those who rent single-family homes.

In both cases, these tenants are simply letting their possessions ride in the event of a burglary or another covered event. Personal belongings, liability, extra costs when you have to move out of your home temporarily, and many other things come into play. Renters insurance can pay for all those things. Ironically, renters insurance is one of the cheapest policies money can buy, yet is often overlooked.

Why don’t people buy renters insurance?

You’re probably wondering why most Americans forego renters insurance. Well, there are a number of reasons, and price wasn’t the most common answer.

The most common reason was that renters felt their apartment complex or rental home was adequately protected without talking to an insurance company. Many times, they assumed the property owner’s insurance would offer personal property coverage for them. Others simply did not think renters insurance would provide significant value.

Indeed, 57 percent of respondents felt their security was enough to protect them in the event of an insurable event. Whether your home is damaged by fire, tornado, water damage, or something else, homeowners policies do not cover renters. This means that while your landlord cannot charge you rent if your home is temporarily uninhabitable, you’re missing out on additional living expenses that would help supplement the higher cost of a short-term rental. The cost to replace your personal belongings will also fall entirely on you. 

The next biggest excuse for not buying renters insurance was price, cited by roughly 52 percent of those surveyed. They believed renters insurance companies would charge them large premiums not justified by the small payouts they could expect. In reality, it’s the other way around.

As noted earlier, price shouldn’t hinder renters from buying coverage, as the average policy only costs $185 annually, per data from the National Association of Insurance Commissioners. It varies by state, but states with high averages are still around $200 per year. A base renters policy often comes with $10,000 in personal property replacement as well as liability coverage, additional living expenses, and more. All of that is available for $200 or less per year ($17 or less per month).

Meanwhile, 48 percent of respondents just assumed that their landlord’s insurance policy would cover them. While landlords can get extra coverage for their property when renting to others, the property damage, liability coverage, and other coverages will never cover a renter.

A landlord policy only covers the structure, including walls, floors, cabinets, and so on. Typically, when they rent out and do not occupy the premises, many property owners do not carry personal property coverage.

It doesn’t protect your personal belongings, nor does it cover you for personal liability if someone happens to get hurt in your apartment or home. The average cost of a policy with renters insurance companies is miniscule next to the things the cost of renters insurance will cover after a claim.

Some renters policies also offer coverage for things like security deposits if you meet their criteria. You can find all this in your renters insurance quotes.

Believe it or not, that big screen TV, computer, iPhone, iPad, couch, California King bed, expensive sheets, closet full of designer clothing, and jewelry all add up.

And again, your liability is very important as well if something goes wrong.

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What can you do to protect your interests as a renter?

It’s pretty simple really – buy a renters insurance policy if you don’t already have one. If you’re afraid you’re not getting the best deal, get at least three quotes and compare your options. You can start with the company you use for auto insurance or you can go online and enter your zip code into a calculator to get several quotes at once.

Most insurance companies sell all types of insurance, even if it’s through an agency (like Geico Home Insurance).

In any case, you could actually receive a discount for bundling home and auto, which would lower your overall premium on both policies. In some cases, this could mean added flexibility to add more coverage for medical expenses, expensive items like computers, and other additional coverages.

So that $185 in average costs could drop below $150, or about $10 a month to protect your belongings and protect you from liability. It could also increase while adding coverage for computers, expensive jewelry, or to increase your liability and personal property coverage in general. It’s up to you to decide what you need from it.

But always take the time to shop around to ensure you get the best price on the right coverage. It may not be from your auto insurance provider, even if it’s more convenient.

Read more: Is renters insurance required?