What is renters insurance?

Although it is widely available and affordable, many renters do not understand the importance of renters insurance and are inadequately protected. As a landlord or rental agent, a better-protected renter is better for you as well, ensuring that a loss or financial reversal won’t leave your tenant unable to pay the rent. How can you answer when your tenants ask “What is renters insurance and why is it important?”

October 13, 2021

4 min read


In the U.S., less than half of all renters carry renters insurance. Yet surprisingly, landlords don't always recognize or communicate the significance of renters insurance to their tenants. This leads both renters and landlords to ask the question—What is renters insurance?

An agent explaining the benefits of renters insurance is a crucial way to add value to the service you provide to your clients.

What is renters insurance?

Renters insurance is a product that protects a tenant's personal property and offers liability protection if one of their guests or workers is injured while on the property. Renters insurance policies are configured in a variety of ways to customize coverage for each individual. Renters insurance can also cover expenses incurred if the property becomes uninhabitable due to damage or loss.

What is the difference between renters insurance and landlord insurance?

Renters insurance coverage protects tenants and their personal property, while landlord insurance protects landlords and their rental property. Landlord insurance covers not only the property itself, like a homeowners insurance policy, but also covers additional liability and risks associated with the rental. Other policy add-ons may include coverage for repair and renovation, or to protect the property during vacancy.

Why should landlords care about renters insurance?

What's suitable for tenants is generally good for the landlord. When tenants are protected from liability and financial hardship, landlords enjoy additional peace of mind. Additionally, adequate coverage for tenants helps keep the landlord from being sued in the event of an accident or loss.

Can landlords require renters insurance?

Only 41% of American renters carry renters insurance. This disparity is not because landlords can't require renters insurance. In fact, within every state except Oklahoma, landlords have the option to require renters insurance. Therefore, if your landlord clients decide to require renters insurance, they should include the requirement in their standard lease agreement.


Do roommates need separate renters insurance policies?

In almost all cases, roommates should have separate renters insurance policies. For example, roommates have different amounts of personal property, requiring extra coverage. Another reason to separate policies for each roommate are claims against a renters insurance policy that may affect the price of auto and home insurance for years.


Is renters insurance an unnecessary financial burden to place on renters?

Renters insurance is one of the most affordable types of coverage in the insurance market. On average, renters insurance costs less than $20 each month. Renters who cannot afford an extra $20 may be too financially insecure to pay rent consistently.

How do renters insurance coverage limits vary?

Coverage limits may vary depending on the amount of personal property a renter has. Renters with the following may need more property coverage:

  • an elaborate home office computer setup
  • valuable electronic equipment
  • a collection of designer shoes or handbags
  • exclusive artwork
  • expensive jewelry

One way to ensure that tenants have adequate personal property coverage is by encouraging them to conduct an inventory of their property, ideally upon move-in. By gathering information on their items, including warranty information, identification numbers, and current value, renters can ensure they are adequately protected. It is easy to underestimate how much it would cost to replace everything in a catastrophic loss.Liability coverage may be higher for renters who choose additional coverage for their pets or other add-on coverage. Certain limits apply to liability coverage, and renters should be aware of these.

Do renters insurance policies cover pets?

Some coverage is usually provided for damage or liability related to pets. However, renters may have to purchase additional coverage or may have trouble finding liability coverage in some instances. This may include owners of exotic animals, aggressive dog breeds, or pets with a history of aggression.


Renters who cannot obtain coverage for their pets may want to purchase additional personal liability umbrella coverage to fill the gap. Please work with your client to ensure that their pet policy adequately spells out its limitations.

How can landlords communicate a renters insurance requirement to their tenants?

While your landlord client will want to include the renters insurance requirement in the lease agreement, they may also want to include it in their marketing materials. Again, transparency is important. Being upfront with potential renters gives them time to prepare for the decision throughout the application process.


How can a landlord ensure tenants keep their renters insurance coverage active?

Landlords can require tenants to provide proof of coverage at the beginning of the lease and on an ongoing basis each time they renew. Clients may be listed on the policy as an interested party, ensuring that they are notified if the policy is canceled or altered.

How can RentSpree help facilitate renters insurance coverage?

RentSpree has partnered with Sure, the industry's fastest-growing company dedicated to insurance technology. Together, they are creating a streamlined landlord and tenant-friendly process for notifying tenants about renters insurance, helping them purchase insurance, and assisting landlords to monitor their ongoing coverage. Your landlord clients can do it all from the RentSpree dashboard, allowing them to ensure compliance and maintain a positive tenant relationship.


Get thoughts, news, and tips sent straight to your inbox.
By subscribing, you confirm that you agree with our Terms and Conditions.