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Having renters insurance is a good way to protect both a renter and their landlord. In this article, explore a few of the questions you may want to ask to learn if it’s required, if it’s worth it, and how much you need.

A couple catches leaking water in buckets while on the phone calling about their renters insurance.

Renters insurance helps provide financial protection for renters whereas a landlord’s insurance policy most likely won’t. But does that mean renters insurance is required? The quick answer is no, it is not required.

So, if you’re a renter, you may be thinking, “not the owner, not my responsibility,” when it comes to any damage to the property that you live in. While that may generally be true, that doesn’t mean your landlord is responsible for your personal belongings if there’s an emergency such as a fire, flood, or theft; or financially liable if someone is hurt inside the property as a result of your negligence. These are moments when renters insurance may come in handy.

My Landlord Doesn't Require Renters Insurance. Is it Worth it?

Some landlords may require renters insurance to live in their property. But even if they don’t, it still may be worth considering. It all depends on your financial situation, how much value you own, your ability to replace any lost or damaged property out of pocket, and generally your comfort in going without that safety net.

Renters insurance typically covers:

  • Personal property in your rental residence
  • Loss of use (aka helping pay for living expenses if you can’t live in your rental, either temporarily or permanently)
  • Liability for injuries
  • Medical payments resulting from someone being injured in your home

So, could you afford to replace your computer, TV, entire wardrobe, and furniture if your apartment were to catch on fire? What about the cost of a hotel room to stay in while your rental undergoes repairs following a flood? If you can cover costs like that out of pocket no problem, then renters insurance may not be needed. But if not? Perhaps some coverage is for you. While renters insurance will not prevent emergencies from happening, it can at least help you avoid racking up huge amounts of debt and provide you the peace of mind of a safety net in case something does happen.

How Much Renters Insurance Do I Need?

How much renters insurance you need depends on how much you want to cover. In other words, how much money would you need to replace your stuff, for any liability issues, or for additional living expenses?

For your personal property, consider taking and maintaining an inventory of all your belongings—including item descriptions, estimated values, dates purchased, model and serial numbers, receipts, and photos—and then add it all up. You’d want enough renters insurance to cover that total amount.

When it comes to liability coverage, one suggested guideline is to add up your net worth—your bank accounts, the value of your car, etc.—and choose a policy that at least covers the total. Doing so will at least reduce the chances of a lawsuit wiping out your assets.

The Bottom Line

While renters insurance is not required, it’s definitely something worth considering if you’re a renter. You never know when an emergency out of your control may occur and you need help to replace your belongings, pay for a temporary living space, or protect yourself from paying out of pocket in a liability suit.

About the author:

Marc Klein

With his eyes set on becoming the next great ad man (at least until his comedy writing career took off), Marc earned his journalism degree and went straight into advertising for various gaming and tourism clients. He later expanded his credentials to include public affairs and communications work for several environmental science organizations before returning to his marketing roots. A lifelong scholar with recent studies in strategic communication, Marc enjoys tying humor into his writing and simplifying complex financial subjects into engaging and easy-to-digest content for a wide variety of audiences.

This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.