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Is Renters Insurance Worth It?

Even if your property manager doesn’t require renters insurance, you may want to purchase a policy to protect yourself from unforeseen events that could cause hundreds of dollars worth of damage. Read our guide to learn about the benefits of renters insurance.

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Even though renters insurance isn’t required by law, you can get peace of mind that you’ll be able to afford damage caused by unexpected events. With a policy, you’ll receive liability, personal property, loss of use, and medical payments to others coverage for about $15 per month.

To learn why you should invest in renters insurance and how to find the best renters insurance policy for you, keep reading our guide.

What Is Renters Insurance?

Renters insurance protects the belongings you own in your rental. It also protects you from liability claims if you’re found to be responsible for an event that causes bodily injury to your neighbor or property damage to their belongings.

Similar to homeowners insurance, standard renters insurance has the same personal property and liability coverage, but it doesn’t protect the building from structural damage—this is your landlord’s responsibility.

What Does Renters Insurance Cover?

In any renters insurance policy, you can expect four types of coverage along with endorsements or floaters that allow you to add on more coverage if needed. Here’s an overview of each type of coverage:

  • Personal property—This is the part of the policy that protects your personal belongings. Take inventory of all of your belongings and add up their value to determine how much coverage you’ll need for your items. Keep in mind that expensive items, like jewelry and antiques, aren’t usually protected under the personal property clause, so you’ll have to purchase an endorsement for them.
  • Loss of use/additional living expenses—If a fire or similar event causes damage to your home and makes it uninhabitable, your policy will pay for living expenses during repairs. Living expenses may include the cost of a hotel room or the cost of meals.
  • Liability—If you’re responsible for damaging your neighbor’s property or for injuring them, your insurance will cover repairs, replacements, and medical bills up to the amount of coverage you purchased.
  • Medical payments to others—If a guest in your home is injured, your policy will pay for medical expenses up to a certain amount.
  • Endorsements/floaters—Most renters insurance providers offer additional coverage options to extend your protection to areas not covered under the base policy. Common endorsements include identity theft protection, jewelry, earthquakes, and water backup. Talk to your provider about what their options are and how much more per month your policy will cost with the endorsement.

Here’s a list of events that are typically covered under a renters insurance policy:

  • Fire
  • Lightning
  • Weight of snow, sleet, or ice
  • Theft
  • Vandalism
  • Water damage not from flooding
  • Damage from vehicle
  • Explosions
  • Riots
  • Falling object
  • Smoke damage

What Doesn’t Renters Insurance Cover?

There are certain items or events that aren’t covered in most base policies. Unless you purchase an endorsement, you won’t get coverage for:

  • Natural disasters
  • Personal injury
  • Roommate property
  • Pest damage
  • Valuable items
  • Car damage

How Much Does Renters Insurance Cost?

The cost of renters insurance will vary based on where you live, the coverage amounts you choose, and the endorsements you add to a base policy. Here’s an example of what a policy could look like:

Renters Insurance Cost Breakdown

Area of Coverage Coverage Amount
Area of Coverage Coverage Amount
Personal property $25,000
Additional living expenses $5,000
Personal liability $100,000
Medical payments to others $1,000 per person
Deductible $500

You premium may be higher or lower depending on the following factors:

  • Age of building
  • Cost of living
  • Susceptibility to natural disasters
  • Renting history
  • Claims history
  • Pets
  • Safety features
  • Credit score
  • Amount of belongings
Renters Insurances Adobe Licensed

How Does Renters Insurance Work?

When you purchase a renters insurance policy, you can set your start date for as early as the following day. Unlike home warranties, there’s no waiting period on renters insurance, so your protection will begin on that start date.

When a covered event occurs, file a claim with your insurance company immediately. If you don’t have all of the information following an event, file a claim with the information you do have. You can always contact your insurance agent later to give them more information. Most providers have a 24/7 claims line, a mobile app, a customer portal, or any combination of the three so that you don’t have to wait until the next business day to file a claim.

If your claim is approved, you pay your deductible, and a company representative will walk you through the rest of the claims process.

4 Reasons Why Renters Insurance Is Worth It

While renters insurance isn’t required by law, here a few reasons why you should consider a policy:

  1. Low insurance premiums—A renters insurance policy only costs a few dollars every month. In exchange for those few dollars, you could receive thousands of dollars worth of protection.
  2. Lack of funds—Most renters don’t have extra money to pay for a covered loss. Instead of worrying about paying for damage caused by unexpected events, purchase a cheap policy and get peace of mind.
  3. Protection away from home—Not only does renters insurance protect you in your apartment, it protects you away from home. If you go on a trip and your belongings are damaged, you can use your policy to cover the replacement costs.
  4. Customizable coverage—With a renters insurance policy, you get to decide the exact amount of insurance coverage you want. This means you won’t pay for protection you don’t need and you know the coverage limits going in.

How to Find the Best Renters Insurance

Here are some tips to help you save on your renters insurance policy:

  • Start with your car insurance provider—If you’re happy with your auto insurance policy, start by getting a quote from that provider. Not only will you get coverage from a company you trust, you could get a discount for bundling insurance policies.
  • Look for discounts—In addition to the multi-policy discount, you can get other discounts for having safety features in your home or using auto pay. If you’re looking for a company with multiple discounts, consider Allstate or American Family.
  • Consider ACV vs. RCV policies—Personal property coverage is either actual cash value (ACV) or replacement cash value (RCV). ACV policies will replace your items based on their current value, which takes depreciation into account. RCV policies replace your items as if they are new. An RCV policy is more expensive, but a person with an ACV policy will have to use some of their own money to pay for a new item.
  • Choose a high deductible—With any insurance policy, you can lower your premium by choosing a higher deductible. Renters insurance policies usually allow you to choose between $250, $500, $1,000, and $2,500.
  • Compare quotes—Request quotes from at least three insurance companies to compare coverage and pricing and help you find the right policy for your home.

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