How Much Does Renters Insurance Cost?
Protect your belongings and avoid legal liabilities in the case of mishaps at your rental by purchasing renters insurance.
Obtaining renters insurance can prove to be a lifesaver if your apartment gets damaged or wrecked. Renters insurance safeguards your personal belongings in the occurrence of certain perils like fire, explosions, theft, and vandalism. Most renters insurance plans also shield tenants against liability from unintentional harm to guests. So, when you’re planning for the cost of an apartment, make sure you factor in renters insurance premiums. Fortunately, renters insurance is one of the most reasonable kinds of insurance.
Some tenants believe that their landlord’s insurance will cover damage to their personal belongings since they own the building. Though, landlords have their own kind of insurance that usually only covers the physical property and personal property utilized to maintain the building, not your possessions inside. Landlord insurance does contain liability coverage in the event that a tenant was hurt on the property and the landlord was discovered to be at mistake, but it won’t protect your own liability.
In short, your landlord’s insurance will not cover your requirements. To safeguard your stuff and to avoid legal fees and a settlement in the occurrence of an accident at your rental, you’ll require your own renters insurance policy.
The article will explore renters insurance, what does renters insurance cover, how much renters insurance does one need, the cost of renters insurance, and more.
What is Renters Insurance?
Renters insurance is a policy devised to help protect you monetarily if you rent a home, apartment, or condo. It pays to replace or repair your possessions, up to your policy limits, should they be damaged or stolen. Furthermore, renters insurance facilitates pay for repairs if you inadvertently damage others’ property. It also pays for a guest’s medical bills if you are found liable for his or her wounds. And it typically involves additional living expenditures, which helps pay for expenditures such as hotel bills, if your rental becomes dilapidated due to fire or some other disaster.
What does Renters Insurance Cover?
Renters insurance is made up of three different groups of coverage. Each group offers a different kind of protection. Your renters policy will protect you from a range of different covered perils.
Personal Property Coverage
A renters insurance policy will cover expenses to replenish your personal belongings, like your furniture, electronics, computer equipment, your clothes, jewelry, and appliances. Basic renters insurance will compensate you for the loss of property (up to your policy’s coverage limit) if ruined, damaged, lost or stolen in any one of the following 16 different incidents:
- Fire and lightning
- Windstorm and hail
- Damage by aircraft
- Damage by vehicle (not your own)
- Smoke damage
- Volcanic eruption
- Falling objects
- Weight of snow, ice, sleet
- Damage from steam-heating/water-heating appliances/systems
- Leakage or overflow of water or steam
- Freezing of plumbing, heating, air conditioning
- Short-circuit damage caused by electrical appliances
Renters insurance can also cover property when it’s not even in your home, for instance, if your laptop is stolen while you’re on vacation; because it’s considered insured property, it’s still safeguarded whether it’s inside your house or not.
Personal Liability Coverage and Medical Expenditures
A renters insurance policy will also cover costs you may be legally liable for paying if someone is wounded in your apartment. If someone slips, falls and is injured on the premises, or if your overenthusiastic dog or cat bites a visitor and delivers them to the ER, your policy’s personal liability and medical coverage will cover the cost of possible medical bills. If that person chooses to sue you for their damages, your liability coverage will pay for some legal expenditures that you accrue from the lawsuit.
A renters policy can shield property damage to others that you’re considered liable for. If a broken pipe in your apartment flooded your neighbor’s residence below, your insurance policy should cover damages to their property.
If your residence has been made ruined, renters insurance can also cover the cost of a temporary place to reside. It may reimburse you for everything from hotel bills to the expense of food if it surpasses what you’d usually pay for meals. For instance, if there is a fire at your apartment and it requires to be repaired, your loss-of-use coverage will cover the cost of a hotel. If your hotel room doesn’t have a kitchen and you require to go to restaurants more often, your renters insurance can compensate you for the cost of your meals. Your loss-of-use coverage will even cover the cost of gas if you’re driving extra since you are now living further away from work.
Otherwise referred to as extra living expenses, this part of your renters insurance policy can cover you until you’re able to move back in (or find a new apartment).
Renters insurance also protects against other losses you may not have thought of, including:
- Credit card/bank forgery coverage: Your insurance policy protects against theft, but can also compensate you for losses incurred if a thief steals from your home, steals your credit card or checkbook, and goes on a false spending spree.
- Other people’s property: It’s not just your property renters insurance covers. Suppose you borrowed a friend’s home gym equipment, or they loaned you their tablet, some LP records, or books; if a fire or faucet flood damages them, your policy will cover to replenish your property and theirs.
- Items stored elsewhere: Renters insurance doesn’t just protect property inside the walls of your home. Many rental insurance policies will cover damages to your possessions if they’re hoarded off-site, too. It may also shield personal belongings stolen from your car, or damaged in a storage facility.
- Food: If you’re pondering what would happen to the contents of your fridge if it broke down, not to fret: you may be able to claim your groceries on your insurance policy, even if the fridge works but stopped due to a power outage. (It should ideally fall under the “short-circuit damage” category.)
What does Renters Insurance Not Cover?
There are situations when renters insurance will not cover your personal property, such as if your property is harmed by a peril that is not covered, or the value of your belongings goes beyond your policy’s limits. Renters insurance doesn’t cover your belongings under the following provisions:
- Natural disasters: Damages triggered by flooding, earthquakes, and even sinkholes aren’t covered under renters insurance policies. (However, astonishingly, volcanic eruptions and windstorms are covered.) If you reside in a flood zone, close to a fault line, or in a region susceptible to major storms, contemplate purchasing additional, separate coverage.
- Property damage caused by pests: They’re pesky and apparently resistant to many kinds of extermination, but losses to your property caused by rodents, bugs, pests, and other sorts of vermin aren’t covered under renters insurance.
- Items of high value: High-priced valuables may not be fully covered under your renters insurance policy, like antiques, fine art, jewelry, vintage family heirlooms, a rare autograph collection, premium appliances, etc. An insurance company may restrict the amount of coverage they offer because the value of said items may surpass what they can afford to pay out — coverage sublimit are typically $2,500 for electronic items and $1,500 for jewelry. To incorporate pricier items in your policy, you may need to buy additional coverage, called endorsements, for individual items, or individual policies, like jewelry insurance.
- Damages from terrorism or nuclear war: Prior to 9/11, standard renters insurance policies managed to include protection against terrorism at no cost. But now, you’d require to pay an additional cost to get coverage, and even then, it would only cover losses in your apartment, not to the rest of the building, unless your landlord or property owner paid for independent terrorism coverage.
- Other exclusions: While renters insurance may cover losses to items stolen from your car, it won’t cover your vehicle; that’s what your auto insurance is for. And while it may safeguard items you’ve borrowed from someone else if they become harmed in your apartment, your policy won’t necessarily cover the property of a roommate. They’d require to purchase their own renters insurance to cover their property. Otherwise, roommates can buy a joint renters insurance policy. If you decide to do this, nonetheless, keep in mind that the payout as the result of a claim will be divided between you both. Renters insurance also won’t cover a lost security deposit.
Adding Additional Coverage
If some of your belongings go beyond your policy’s limits or submit, you can add extra coverage to your policy to make sure your valuables are safe. Moreover, you can add coverage for perils that are not covered in your policy, like some natural disasters. This extra coverage is called an endorsement, and you can typically add endorsements to your policy whenever you feel like it — it doesn’t have to be at the time of buying. Below are common endorsements people add to their policies:
- Scheduled property endorsement: Increased coverage limits for particularly valuable items, like a wedding ring
- Earthquake endorsement: Coverage for personal property and loss-of-use triggered by an earthquake
- At-home business endorsement: If you make more than $2,000 a year from an at-home business, your basic renters insurance policy will not cover your business gear. You can add an at-home business endorsement to expand coverage to things like your work laptop.
Average Renters Insurance Cost
According to ValuePenguin, the average renters insurance policy costs $187 a year. This figure is intended to give renters a ballpark on price since there are infinite factors that could cause a policy to be more or less costly than the national average.
Factors That Could Increase Your Renters Insurance Cost
There are several reasons you may pay extra for renter’s insurance:
- The area of the country in which you live – Living in an area with a high-level crime or many natural catastrophes will cause you to pay more for renter’s insurance.
- Amount of personal property protection – If you want extra coverage for personal property, your policy will cost more.
- Amount of liability protection – If you want improved liability protection, you will pay more for renter’s insurance.
- Additional riders –There are numerous riders you can buy in addition to a basic renter’s insurance policy. you can add earthquake coverage, jewelry coverage for high-value items, extra liability protection, coverage to restore identity, or coverage to insure the additional business property.
- Lower deductible – If you opted for a policy with a lower deductible, your monthly premiums will be higher.
- Multiple claims – If you have had several insurance claims or there have been multiple insurance claims at the property where you reside, your premium may be higher.
- Bad credit – If you have a poor credit history, you will be expected to pay more for an insurance policy.
- Replacement cost policy – This type of policy compensates you for an item that is comparable to the item that was lost. this policy is normally more expensive than an actual cost policy since you will be compensated closer to the original price you paid for the item.
Factors That Could Decrease Your Renters Insurance Cost
There are numerous factors that could decrease your renter’s insurance rate:
- Higher deductible – If you opted for a policy with a higher deductible, say $1000 instead of $500, your monthly premiums will be lower.
- Actual cost policy – This kind of policy reimburses you for what the item would be worth now, not when you bought it. Hence, they are usually less costly than replacement cost policies.
- Burglar alarms or additional safety features – Safety elements such as a security system, deadbolts, and smoke and carbon monoxide detectors can assist to lower your rate.
- Good credit – Having a solid credit history can get you a better rate on your insurance policy for the reason that you are perceived as less of a risk.
- Living in lower crime areas – Lower crime areas have decreased risks of break-ins and theft, so your premium will be lower compared to if you lived in a higher crime area.
- Living in an area with fewer natural disasters – You can get hold of better rates for renter’s insurance if you live in an area that does not experience such extreme weather conditions.
- Discounts for members – You may be able to get a lower rate by being a member of an organization such as Triple-A or a wholesale club, such as Costco.
- Discounts for multiple policies – If you already have an insurance policy with a carrier, such as a car insurance, they may be able to give you a better rate when you buy a second insurance policy through them.
What to do Before Buying Renters Insurance?
Take an inventory of everything you own and add it all up. The average renter owns $20,000 worth of personal property, but many apartment dwellers miscalculate the value of their stuff. Itemizing your possessions will give you an impression of how much insurance you require.
And like any other insurance coverage, be it life, auto, health, or otherwise, know the kind of coverage you’re looking for. Explore around, compare different plans and insurance companies, and evaluate your deductible versus your premium to find out where you can get hold of the best coverage at the lowest price.
You should also ask insurance companies about the discounts they offer — many will offer discounts for safety elements like smoke alarms or deadbolt locks. But then on the other hand, if you own some pets or breeds of dogs that raise your risk of property damage, your rates could be higher. Based on the breed, you could even be refused insurance coverage. Take into account these factors when you’re exploring around.
Replacement Cost Vs. Actual Cash Value There are two kinds of renters insurance policies you can select from, and which you select will decide how you will be paid out in the occurrence of a claim.
- A replacement cost policy covers the price of replacing your items. If your laptop is stolen, your payout covers the cost of an equally priced computer. Between the two, this policy costs more, but then again pays out more.
- An actual cash value policy replaces items at their depreciated value. Therefore, if your laptop was a decade old, your policy would pay you out corresponding to its current value. If that’s not sufficient for a new laptop, you’d need to pay the difference at your own expense.
Named Perils Vs. All Risk
In addition to deciding between an actual cash value or replacement cost policy, there are also two kinds of policies when it comes to covered perils.
- Named perils policies, only cover damage or theft stemming from particular circumstances named in the policy.
- All risk policies cover every kind of peril with the exception of any exceptions named in the policy, like earthquake damage.
You should talk to your insurance company to determine which policy does best for your condition. After you take your home inventory, you should have a good idea about how much your belongings cost and what you can afford to pay to replace out of pocket. Named peril policies are significantly less expensive than all-risk policies, so think about this prior to making a decision, particularly if you live in an area of the country that doesn’t experience extreme weather.
How Much Renters Insurance Do I Need?
Renters insurance is relatively cheap. According to the Independent Insurance Agents and Brokers of America, Inc. (IIABA), the average renters policy costs just $12 a month for up to $30,000 in personal property coverage. That’s strong coverage for less than the cost of a few cups of coffee a week. Here are some tips to assist you to ascertain your insurance needs.
- Complete an inventory of your possessions. Personal property coverage is perhaps the main reason most buy a renters policy. The coverage will compensate you for covered damage, loss, or theft of your personal possessions up to a certain dollar amount, so you’ll want to make sure you get that amount correct. Completing a home inventory is a great way to decide how much property coverage you need. This inventory makes a list of your personal possessions, along with details about their age, purchase price or current value, and other identifying information.
- Check with your insurance agent about bundling choices. Many insurers offer noteworthy discounts if you purchase more than one policy with their company. For renters, this usually implies bundling auto insurance with a renters policy, but life, business, and other plans may also be eligible.
- Select the right deductible. A deductible is the amount of a covered loss or liability that you incur. In other words, it’s the amount “deducted” from any payout by your insurer. For instance, if a fire causes $1,500 in insured damage to your personal property and your deductible is $500, then your insurer will pay you $1,000.
Your renters insurance premiums will show the deductibles you agree to pay. Lower deductibles imply higher premiums; higher deductibles represent lower premiums. Bear in mind that an insurer will not compensate you for a loss amount that is lower than the deductible. This entails if your deductible is $2,000 and you endure $1,750 in losses, then you are completely responsible for those costs, even if the reason for the loss is covered by your policy.
When selecting a deductible, think thoroughly about the out-of-pocket costs that you are willing and able, to pay. A disciplined saver may be able to balance the greater risk of a high deductible with cash reserves. Others, though, will have to balance the benefit of a higher deductible against the risk of greater out-of-pocket expenses.
Evaluate your liability. Your renters policy’s liability coverage may shield you if someone injures themselves in your home. It may also protect you in situations you or a family member causes harm to others’ property. Some policies will pay for the defense and court expenses in addition to settlement costs. The average renters insurance policy offers $100,000 in liability coverage. For renters, this amount is often enough. Though, if you entertain company often at your home or if your assets go beyond that amount, you should consider an amount of insurance equal to at least the total value of your assets.
Supplement coverage if required. Bear in mind that your policy will exclude some perils (such as earthquake and flood losses), limit coverage on some items (such as computers, firearms, and silverware), and might not cover a business in your home. If you have special insurance needs, speak to your agent about expanding limits or adding separate policies.
And at the end of the day, remember where your apartment is situated will play a crucial role in deciding your renters insurance rates. Prices will change based on your state, city, and neighborhood. Safer locations might mean lower rates, so renting in a low-crime area near a fire station might save you money. Your rates will also reflect the security of the rental property itself. For instance, an older, unrenovated building might have a greater risk of electrical and plumbing issues, and that can mean higher rates. Luckily, measures as simple as installing smoke detectors and fire extinguishers in your apartment may mean real savings, even if you do rent an older property.
The five Cheapest Renters Insurance Companies of 2020 are:
Best Overall: State Farm
- Discounts for bundling policies
- Get hold of an online quote in seconds
- Ability to customize coverage
- Discounts not accessible in all states
- Fewer discounts relative to other insurers
State Farm offers renters insurance all over the U.S. with standard policies that cover a variety of losses, such as jewelry, collectibles, and, if the property is ruined, a loss of use. The company also offers a host of customizable extra policies, such as riders for pet medical insurance, earthquake damage, identity restoration, and additional liability coverage. There also are discounts offered for installing a home security system and having several policies with State Farm.
You can opt to register for renters insurance in person with one of State Farm’s more than 19,000 independent agents, or you can apply online and get a quote within seconds. Similar to other insurers, State Farm’s standard policy doesn’t cover damage from earthquakes, deterioration, animal activity, landslides, settling, and flooding. Policyholders can file a claim 24/7 online, by calling 800-732-5246, contacting their agent, or through State Farm’s mobile app for Android devices.
Best for Discounts: Liberty Mutual
- Various discount opportunities
- Offers one of the best claims services in the country
- Reasonably priced policies starting at $5 a month
- Different discounts based on location
- No water damage coverage in a standard policy
- Coverage not accessible for property worth more than $20,000
Liberty Mutual’s standard policy coverage is applicable to your personal property (or ones you’re accountable for), liability, and extra living expenditures in the incident the property is uninhabitable. There also are extra coverage alternatives, such as earthquake insurance, replacement cost coverage, and blanket jewelry protection.
The insurer also offers many chances to obtain discounts. These include discounts for safety and security devices, having numerous policies, being claims free, automatic payments, going paperless, getting a quote before a current one expires, and buying online. Liberty Mutual offers 24/7 claims filing service online or through its mobile app accessible for Android devices.
Best for Policy Bundling: Erie Insurance
- Substantial savings for bundling policies
- Highly rated customer service
- Competitively priced
- Restricted add-on coverage options
- Accessible in only 12 states
- Must contact an agent to get a quote
Although Erie Insurance is offered in only 12 states, it offers a decent discount if you bundle its policies in one of those states. The company claims that in some situations the discount you obtain on an auto insurance policy may be able to pay for all the premiums for your renters policy. There are discounts for properties with alarm and sprinkler systems.
The insurer’s standard policy contains coverage for any individual stolen item as well as a little bit of security for cash and metals. It also offers liability and personal property coverage when a policyholder is traveling and coverage for living expenditures after a fire or other kind of property loss.
If you need extra coverage, Erie offers riders for things not covered in the main policy. You can file a claim by calling 800-367-3743 at any time or by contacting your agent.
Best for Customizable Options: Nationwide
- Ability to register for a quote online
- Various discount options
- Add-on coverage for collectibles and new items
- Higher premiums than competitors
- Lower-than-average ratings for customer satisfaction
- Not available in Alaska and Louisiana
What stands out about Nationwide is that its basic coverage extends credit card coverage—your policy will pay for unauthorized charges that were made on your card. The standard coverage also involves loss of use if the property is considered uninhabitable, medical payment for others, personal liability, and theft and loss of belongings.
Nationwide’s additional coverage also provides what the company calls its “Brand New Belonging” alternatives—for qualifying damaged or stolen items, you’ll either obtain a brand new one replaced or get the difference between the cost to repair the item and its depreciated value. Other coverages you can add comprise riders for water backup, earthquakes, and high-value items, such as antiques. You also can get hold of protection for items in your trailer, motor vehicle, or watercraft.
Likewise many other insurers, Nationwide offers discounts if you bundle your policies, haven’t filed renters insurance claims in the past, or have a protective device installed. Policyholders can file a claim online 24/7 or by calling 800-421-3535.
Best Deductible Options: Farmers
- Deductible options varying from as low as $50 to as much as $10,000
- Numerous discount options available
- Offered nationwide
- No online quotes in some states
- Average customer satisfaction scores
Farmers’ basic coverage contains personal property, liability, medical payments, and additional expenditures. Plus, you can choose for replacement cost coverage (it’ll replace your belongings without factoring in depreciation) and extra coverage for high-value items such as electronics and jewelry.
Its choices for deductibles are not stated upfront on its website, but when you receive an online quote, you can select from more than a dozen combinations of deductibles, with choices for all perils ranging from $50 to $10,000 and extra options to add a $250 deductible on theft-related claims or options to add a deductible ranging from $500 to $2,500 on wind- and hail-related claims.
The company’s discount choices aren’t that much dissimilar from other insurers and contain getting rewarded for bundling policies with Farmers, having a security or fire alarm installed, and being a nonsmoker. You can file a claim online 24/7, by calling 800-435-7764, through the app available on Android devices.