Do I need renters insurance

I’ve been living in my current apartment for about two years and I’ve managed to make it without renter’s insurance while avoiding any major disasters (knock on wood). Lately, I have been shopping around for renter’s insurance. Often, major financial disasters happen when you are not prepared. So in honor of National Homeownership Month, I have made a list of factors to consider when asking yourself: Do I really need renter’s insurance?

Many apartment complexes require tenants to have renter’s insurance. While the apartment owners cover the cost of the apartment, renter’s insurance covers any lost or damaged personal property in the event of a fire, thief, or natural disaster. Renter’s insurance also covers temporary living expenses in case you are displaced and medical expenses if someone is injured in your home or by something you own – if your satellite dish falls on someone, for example.

Renter’s insurance is relatively inexpensive. It can range anywhere from $10 to $20 a month depending on where you live and the amount of coverage purchase. Some insurance companies require you to pay annually, some will accept monthly payments, and others will allow installment payments if needed. Before buying renter’s insurance consider these things.

Amount of coverage – Make an inventory list of all the items in your home including bed, laptop, appliances, clothes, shoes, etc. If you have more expensive items in your home it’s worth buying a larger coverage amount.

Deductible – As with any insurance, you will have a deductible on your renter’s policy. A deductible is the amount you have to pay before insurance kicks in. Lower insurance premiums will have higher deductibles and vice versa.

Actual Cash Value (ACV) – This is the value of your items at the time of the loss. This means the insurance company will only pay you what the items were worth when they were damaged or stolen. Think about it as a depreciating value. You may have paid $200 for a laptop, but it is only worth $50 when the damage occurred.

Replacement Cost – This is the amount of money you will need to replace your items. The insurance company will pay you the amount needed to replace items despite their current value.

Location – Just like with car insurance, if you live in an area that is more prone to theft you will pay more for renter’s insurance. Also, if you live where hurricanes, tornados, earthquakes, wildfires, or other natural disasters are common, it’s worth getting renter’s insurance. This may also cause premiums to be higher than normal.

Discounts – Many insurance companies will give you a discount if your apartment complex has a security gate, a sprinkler system, fire extinguisher, dead bolts, or if you also have auto insurance with the insurance company.

Animals – Owning pets can add to your premium. Some insurance companies will not cover certain breeds of dogs, or you may have to purchase additional insurance.

After considering all the information on renter’s insurance, the answer for me is, yes, I need renter’s insurance. If you own anything – and do not want to risk losing everything and having to start over – it’s best to be over-prepared than not at all.

Money Management International (MMI), a HUD-certified housing counseling agency, is celebrating National Homeownership Month throughout June by providing potential and existing homeowners with valuable tips and tools. Visit the updated Homeownership and Home Loans section of to learn more. 

Renee McGruder is a former communications coordinator and grant writer at MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
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  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

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