How Many Renters Have Renters Insurance?

Renters insurance protects individuals who rent their homes. It provides coverage for personal belongings and offers liability protection against unexpected events.

Prevalence of Renters Insurance

In the United States, approximately 55% to 57% of renters have renters insurance, translating to about 61 million individuals or nearly 25 million households. This marks a notable increase from 36% in 2014, yet a significant portion of the renting population still lacks this financial protection.

Key Influences on Adoption Rates

Landlord requirements play a key role in the adoption of renters insurance. Many landlords mandate policies as a lease condition, with about 75% of insured renters having coverage due to such requirements. Landlords often specify minimum coverage amounts, commonly between $100,000 and $300,000 for liability and around $20,000 for personal property.

Demographic trends also influence adoption rates. Younger generations, including Gen Z and Millennials, form the largest segment of renters, with nearly 65% of adults under 35 renting. Despite this, these groups are often less likely to purchase renters insurance. Conversely, older renters, such as downsizing Baby Boomers, often possess higher-value personal property, increasing their need for coverage.

Misunderstandings About Renters Insurance

A common misunderstanding is the belief that a landlord’s insurance policy covers a tenant’s personal belongings. This is incorrect; a landlord’s policy solely protects the building structure, not the tenant’s possessions. Therefore, events like fire or theft would not cover the tenant’s personal property.

Another misconception is underestimating the value of personal property. Many renters believe they lack enough valuable items for insurance, but replacing everyday items like furniture, electronics, and clothing can quickly cost thousands. The average renter owns between $20,000 and $30,000 in belongings, an amount often underestimated. Some renters also perceive the cost as prohibitively expensive. In reality, renters insurance is affordable, with average premiums from $12.75 to $19 per month, or $153 to $211 annually.

What Renters Insurance Typically Protects

Renters insurance policies offer three main categories of coverage. Personal property coverage protects the tenant’s belongings, such as furniture, electronics, and clothing, against specified perils like fire, theft, vandalism, and certain types of water damage. This coverage can extend to possessions even when they are away from the rental unit, such as items stolen from a car or damaged during travel.

Liability coverage offers protection if the renter is found legally responsible for injury to another person or damage to someone else’s property. This can cover associated medical expenses and legal fees if a claim or lawsuit arises.

Additional living expenses coverage, also known as loss of use, provides financial assistance for temporary housing and other increased living costs. This applies if the rental unit becomes uninhabitable due to a covered loss, such as extensive damage from a fire or severe water leak.