This guide is general information, not insurance or legal advice. Coverage, prices and rules vary by insurer and by state, so read your policy documents and check with your insurer, a licensed agent or your state’s department of insurance before you decide.
Key facts
- A landlord’s policy covers the building, not your belongings or your living costs after a disaster.
- A basic policy costs about $300 a year for around $50,000 of property protection, according to the New York Department of Financial Services.
- Standard policies cover fire, theft, windstorm and certain water damage, but not floods or earthquakes.
- General guidance does not spell out how one policy treats a non-family roommate, so ask the insurer before assuming a shared apartment is covered.
- Landlords can make a renters policy a condition of the lease, though they are not required to do so.
Renters insurance usually costs less than people expect, and it is widely misunderstood. Beliefs about landlord coverage, price and who a policy protects lead many renters to go without, then discover the gap only after a fire or a burglary. Here are six common beliefs, checked against how these policies actually work.
Myth: My Landlord’s Insurance Covers My Belongings
This is the most widespread misconception, and the New York Department of Financial Services says many uninsured renters hold it. A landlord’s policy covers the building. If a fire or water damage ruins your sofa, clothes or electronics, the landlord’s insurer pays to repair the structure, not to replace anything you own.
The same gap applies to living expenses. Triple-I, an insurance industry information group, notes that a landlord’s policy will not pay for your living costs while the building is being repaired. If you cannot stay in the apartment, you carry that cost yourself unless you have your own policy. The Department of Financial Services notes one narrow exception: a landlord who knew about a hazardous condition, failed to fix it in a reasonable time, and whose inaction damaged your property may face responsibility. That is a negligence dispute, not a substitute for coverage.
Myth: Renters Insurance Costs Too Much to Be Worth It
The New York Department of Financial Services puts the price of a basic policy at about $300 a year for roughly $50,000 of property protection. You may also qualify for savings, so ask your insurer or a broker what discounts could apply before you settle on a price.
The reason the price is low is that the policy covers only contents and liability, not the structure. That is the landlord’s expense, not yours.
Myth: It Only Covers Theft From My Apartment
Theft is only one piece. Standard renters policies cover damage from fire, smoke, lightning, vandalism, explosion, windstorm and certain types of water damage, such as a burst pipe or the tenant upstairs overflowing a bathtub into your apartment. Floods and earthquakes are generally excluded, though flood coverage is available from the National Flood Insurance Program and earthquake coverage can be added by endorsement depending on where you live.
The policy also follows you. The New York department notes that renters insurance often protects belongings even when you are away from home, so a laptop stolen from a car may still fall within the policy, subject to its limits and exclusions.
Myth: My Roommate Is Automatically Covered Too
The general guidance does not settle who counts as covered under a single policy, so the reliable answer comes from the insurer. If you share an apartment with someone who is not a family member, do not assume that one policy protects you both. Ask the insurer directly how the policy handles another person living at the same address, and whether that person can be added. If it cannot, the roommate can buy a policy of their own.
Myth: Landlords Are Not Allowed to Require It
A landlord cannot be forced to require renters insurance, but the reverse is also true: nothing stops a landlord from requiring it. Travelers, an insurer, notes that a landlord may make a renters policy a condition of the lease. Landlords do this because a typical landlord policy repairs the building after a covered loss but does not cover a tenant’s belongings, and because a tenant’s liability coverage can help when tenant negligence, such as a kitchen fire, damages the property.
If your lease requires a policy, it says nothing about how much coverage to carry. Your own inventory does that.
Myth: Damage I Cause Accidentally Is Never Covered
Liability coverage exists for exactly this. A standard policy protects you against lawsuits for bodily injury or property damage you or your family members cause to other people, and it pays for damage your pets cause. If your dog ruins a neighbor’s expensive rug, the policy responds. Damage to your own property does not.
Liability limits generally start at about $100,000, and some experts recommend at least $300,000. The liability portion pays both court defense costs and awards, up to the limit. Policies also include no-fault medical coverage, generally $1,000 to $5,000, for a guest injured in your home. It does not pay medical bills for your own family or your pet.
Smart tip
Take a home inventory before you choose a limit. A detailed list of your belongings with estimated values tells you how much coverage to buy, and it makes filing a claim faster.
How to Check the Facts Before You Buy a Policy
A few steps cut through the noise:
- List what you own and what it would cost to replace, from furniture to kitchen utensils and bedding.
- Choose between actual cash value, which deducts depreciation, and replacement cost, which pays more but covers the cost of new items.
- Check the deductible on the declarations page. With a $500 deductible and $5,000 in fire damage, you pay the first $500 and the insurer pays the rest.
- Read the covered perils and exclusions, especially for water damage, floods and earthquakes.
- Ask the insurer how roommates, pets and belongings away from home are treated.
Our guide to insurance shopping terms explains the vocabulary you will see in quotes, so you can compare offers on the same footing. The value question also comes up in replacement cost versus actual cash value coverage, and the same logic applies to renters policies.
If you rent a unit inside a building you or your family are buying into, the picture changes. Our walkthrough of what homeowners insurance covers, and what it doesn’t is a useful next read, as is our guide to condo insurance for first-time unit owners.
Questions we hear
Does my landlord’s insurance cover my stuff?
No. The landlord’s policy covers the building structure and the landlord’s liability. Your belongings are only protected if you buy a renters policy.
Are floods and earthquakes covered by renters insurance?
Generally not. Flood coverage is available through the National Flood Insurance Program and a few private insurers, and earthquake coverage can be bought separately or added as an endorsement, depending on where you live.
Can my landlord force me to buy renters insurance?
Yes, a landlord can make a renters policy a condition of the lease. It is not mandatory for a landlord to require it, but it is permitted.
What is the difference between replacement cost and actual cash value?
Actual cash value policies deduct depreciation, so an older item pays out at its used value. Replacement cost coverage costs more but pays what it takes to buy a new one.