Renters insurance is one of the most affordable types of coverage available—yet many renters still end up underinsured, confused about what’s covered, or paying more than necessary. Whether you’re moving into your first apartment or switching policies, avoiding a few common mistakes can save you stress, money, and major financial loss.
Use this guide to learn what not to do when buying renters insurance and how to make sure you’re fully protected.
1. Don’t Assume Renters Insurance Is Optional
Many renters believe their landlord’s insurance covers their belongings or personal liability. It doesn’t. Your landlord’s policy only covers the building—not your personal property or your responsibility for accidental damage or injuries.
Renters insurance protects you from unexpected costs that could easily reach thousands of dollars.
2. Don’t Choose the Cheapest Policy Automatically
Renters insurance is already inexpensive, which makes it tempting to choose the lowest-priced option. But cheaper policies may include:
- Low personal property limits
- High deductibles
- No replacement cost coverage
- Minimal liability protection
Always compare coverage—not just price.
3. Don’t Underestimate How Much Your Belongings Are Worth
Many renters think they don’t own enough to justify insurance, but when you add up the cost of:
- Furniture
- Clothing
- Electronics
- Kitchenware
- Appliances
- Personal items
…the total value can reach $15,000–$30,000 or more.
Underinsuring your belongings can leave you paying out-of-pocket after a loss.
4. Don’t Forget to Choose Replacement Cost Coverage
Renters insurance typically offers two types of personal property coverage:
- Actual cash value: Covers items at their depreciated value
- Replacement cost: Covers the full cost to buy new items
Choosing actual cash value may save a few dollars now, but you’ll receive far less after a claim. Replacement cost coverage is almost always worth the upgrade.
5. Don’t Overlook Liability Coverage
Liability coverage protects you if:
- Someone gets injured in your rental
- You accidentally damage someone else’s property
- Your pet injures someone
- You’re sued for negligence
Many renters choose low liability limits without realizing how much protection they actually need. Increasing liability coverage is inexpensive and offers critical financial security.
6. Don’t Ignore Additional Living Expense Coverage
If your apartment becomes uninhabitable due to a fire, water damage, or another covered event, additional living expense (ALE) coverage pays for:
- Temporary housing
- Food
- Extra transportation costs
- Other essential living expenses
Without ALE, a temporary relocation could become a major financial burden.
7. Don’t Skip Reading What Hazards Are (and Aren’t) Covered
Renters insurance covers many common risks, but not everything. For example:
- Flooding is not covered
- Earthquakes require additional coverage
- Water backup often needs an endorsement
Many renters only discover excluded hazards after they file a claim—when it’s too late to fix the coverage gaps.
8. Don’t Assume Roommates Are Automatically Covered
Most renters policies cover only the named insured. Unless your insurer specifically allows adding roommates, they’ll need their own policy.
Sharing a policy can also complicate claims and payouts, so separate coverage is often the better choice.
9. Don’t Forget to Document Your Belongings
Without documentation, you may struggle to prove what you owned—or its value—after a loss. Take photos, list item values, and keep receipts if possible. A quick digital inventory can make the claims process far smoother.
10. Don’t Choose a Deductible You Can’t Afford
A higher deductible means lower premiums, but choose one that you can comfortably pay at any time. If you can’t afford the deductible, you may not be able to use your insurance when you need it.
11. Don’t Forget to Ask About Discounts
Renters insurance comes with many potential discounts, including:
- Bundling renters and auto insurance
- Having burglar or fire alarms
- Paying the policy annually
- Living in a secured building
- Maintaining a claims-free history
These savings can significantly reduce your premium.
12. Don’t Ignore Pet-Related Coverage Limitations
If you have a dog, especially a breed insurers consider high-risk, your liability coverage may have limitations. Some insurers exclude certain breeds or require additional coverage.
Always confirm how your policy handles pet-related claims.
13. Don’t Assume Your Policy Covers All Types of Water Damage
Renters insurance typically covers sudden and accidental water damage (like a burst pipe), but not:
- Floods
- Gradual leaks
- Sewer or drain backup
Consider adding endorsements if you live in a high-risk area or a lower-level apartment.
14. Don’t Forget to Update Your Policy After Major Life Changes
You should update your policy if you:
- Move to a new apartment
- Purchase expensive new items
- Adopt a pet
- Add security features
- Change your roommate situation
Keeping your policy updated ensures accurate coverage and pricing.
15. Don’t Let Your Policy Auto-Renew Without a Review
Premiums and insurer guidelines change over time. Reviewing your policy annually ensures:
- You still have enough coverage
- You’re not overpaying
- Your belongings are accurately valued
Comparing quotes every 1–2 years can help you maintain affordable, effective coverage.
Final Thoughts
Buying renters insurance doesn’t need to be complicated, but avoiding common mistakes is essential for getting the protection you expect. By understanding your coverage needs, reviewing policy exclusions, choosing the right limits, and documenting your belongings, you can secure a policy that keeps you financially protected—without overspending.
Smart renters don’t just buy insurance—they buy the right insurance.