A renters insurance policy costs about $170 a year nationally — roughly $14 a month — for personal property, liability, and additional living expenses coverage, per the most recent published National Association of Insurance Commissioners (NAIC) survey data available at the time of writing (check NAIC's site for a more recent survey if one has since been published). No federal or state law requires a tenant to carry it, but in most states a landlord can require it as a lease condition, and many leases now do.
Here is what it actually covers, what it costs where you live, and how to tell whether your lease's requirement (or your own decision to skip it) makes sense.
What Renters Insurance Actually Covers
A standard policy (insurers call it an HO-4) bundles three separate protections into one premium:
- Personal property — reimburses you if your belongings are damaged, destroyed, or stolen, up to the coverage limit you choose. This is the part most renters think of first.
- Liability — covers you if someone is injured inside your rental and sues, or if you accidentally damage someone else's property (a bathtub overflow that ruins the unit below, for instance).
- Additional living expenses (loss of use) — pays for a hotel and reasonable food costs if your unit becomes temporarily unlivable after a covered event, most commonly a fire.
Coverage is typically named-peril: the policy lists the specific events it covers rather than covering everything by default. Fire, theft, vandalism, and water damage from a burst pipe are standard across nearly every policy. Flooding generally is not — that requires separate flood insurance, the same as it does for homeowners.
Your Landlord's Policy Does Not Cover Your Belongings
This is the single most common misunderstanding. A landlord's own insurance policy covers the building — the structure itself, shared areas, and any fixtures or appliances they own. It has no obligation to reimburse a tenant for damaged or stolen personal property, full stop, regardless of what caused the damage or whose fault it was. If a fire that started in a neighboring unit destroys your furniture and electronics, the landlord's insurer pays to repair the building; your losses are yours to cover unless you carried your own policy.
Average Cost by State (NAIC Survey Data)
The NAIC's most recent published survey available at the time of writing puts the national average renters insurance premium at $170 per year. State averages vary considerably — more than double between the highest- and lowest-cost states:
| State | Average annual premium |
|---|---|
| Mississippi (highest) | $258 |
| Louisiana | $243 |
| Oklahoma | $221 |
| National average | $170 |
| Wisconsin | $127 |
| South Dakota | $117 |
| North Dakota (lowest) | $114 |
States with more frequent severe weather (hurricanes, tornadoes) and higher property-crime rates tend to sit toward the top of that range; the coverage limit and deductible you choose move your own premium up or down from your state's average more than almost anything else.
Can a Landlord Require Renters Insurance?
In most states, yes — but a few states place limits on this, so verify your own state's law before assuming your lease clause is enforceable as written. There is no federal or state law that mandates renters insurance the way auto liability insurance is mandated for drivers in nearly all states — but a landlord is generally free to write a renters insurance requirement into the lease itself, the same way they can require a security deposit or set a pet policy. Where this is allowed, the landlord can typically also specify a minimum liability coverage amount and require proof of coverage before move-in.
A few states place limits on how or when a landlord can impose this requirement, and public, subsidized, or rent-controlled housing sometimes has its own rules that override a standard lease clause. If your lease requires renters insurance and you are unsure whether that requirement is enforceable in your situation, check your specific state's landlord-tenant statute — particularly any sections on lease requirements or protected housing programs — or your local housing authority rather than assuming either way — this varies enough by jurisdiction that a general rule isn't a substitute for checking.
Is It Worth It If Your Lease Doesn't Require It?
For most renters, the math is straightforward: at roughly $12–$25 a month for a typical policy, the premium is small relative to the cost of replacing a stolen laptop, a burst-pipe wardrobe, or a liability claim from a guest's injury — any one of which can easily exceed a full year of premiums. The exception is a renter with very few possessions of real replacement value and no material liability exposure, where the math is closer, though even then the liability coverage alone is often worth the premium on its own.
If you're weighing renters insurance against the rest of a move-in budget, it helps to see it alongside your other numbers — see the rent-to-income ratio guide for how it fits your overall budget, and the first apartment checklist for the full list of what else to line up before and during your first week. If you're still searching for a place, browse current listings on EMLAKIE to see what's available in your market.