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If you rent your home, you’re likely concerned about rent increases and inflation. Don’t overlook renters insurance, which is an inexpensive financial backup. It can rescue you from having to pay out of pocket if your belongings are destroyed or stolen. This includes situations like a fire or tornado.
Among the popular renters insurance companies we analyzed, the average cost of renters insurance was only $165 a year for $20,000 in coverage for belongings.
Here are the best renters insurance companies based on price, coverage options and discounts.
What Is Renters Insurance?
Renters insurance is a type of insurance that is specifically designed to meet the needs of tenants.
Renters can’t rely on a landlord’s insurance, which covers the building but not your belongings. Without renters insurance, you’d have to pay to replace all your possessions if a fire, tornado or other disaster rips through the building.
Renters insurance not only covers your personal belongings, but it also includes liability coverage and insurance for additional living expenses. Plus, coverage for guest medical payments can pay out for small injuries to guests (such as up to $1,000) no matter who’s responsible for the injury. While renters often focus on insuring their belongings, these other coverage types can prove just as valuable.
How to Find the Best Renters Insurance For You
Getting renters insurance can be broken down into a simple process:
Understand what renters insurance covers (and doesn’t cover)
Renters insurance covers personal property, such as furniture, clothing, jewelry and electronics. It doesn’t protect the physical apartment, which is covered by your landlord’s insurance.
Renters insurance also often has liability insurance coverage. Liability insurance pays for injuries and damage that you accidentally caused to others. That includes legal defense costs if you get sued because of an accident. You choose the amount of liability coverage and can add umbrella insurance for extra liability insurance.
Determine how much renters insurance you need
Renters insurance allows you to choose the amount of personal belongings coverage. You may only need $15,000 worth of coverage or you could even go with $50,000 coverage. The amount you choose depends on your belongings and how much you have to lose.
You also want to think about how much liability coverage you need. A good rule of thumb is to buy enough liability insurance to cover what could be taken from you in a lawsuit.
Compare renters insurance quotes
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What Does Renters Insurance Cover?
Here are the main types of coverage in a standard renters insurance policy.
Personal property coverage
This coverage type covers your personal property—your furniture, jewelry, rugs, clothing, dishes, pots and pans, electronics and other times. It covers damage from problems such as theft, fire, smoke, vandalism, falling objects, explosions and the weight of snow and ice.
You’ll select a policy limit for personal property, which is the maximum amount your insurance company will pay if your personal belongings are damaged or stolen. For example, you might choose $30,000 in coverage.
You’ll typically have a choice between replacement cost coverage and actual cash value (ACV). Replacement cost coverage is more expensive but it provides better coverage because it doesn’t take depreciation into account. For example, if you bought a laptop for $2,000 three years ago and it’s stolen, replacement cost would pay to replace the laptop at today’s retail prices (minus a deductible). ACV would pay only the depreciated value of the laptop.
Some items have “special limits” or sub-limits for certain types of losses. For example, a policy might limit stolen jewelry coverage to $1,000. That would be insufficient for a ring worth $5,000, for example.
If you need more coverage for high-value items, you can “schedule” them so you get paid what they’re worth if they’re stolen.
Many people think of renters insurance only in terms of coverage for property such as furniture. But renters insurance also gives you important liability protection. Liability insurance kicks in when you’re sued for injuries or property damage to someone else. This coverage also pays for your legal defense.
So if someone falls in your apartment—or your dog bites someone—and you get sued, you can tap your renters liability coverage.
A typical liability coverage amount within a renters insurance policy is $100,000 but for the best renters insurance you can increase that amount.
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Medical payments to others
Medical payments coverage is typically included in a renters insurance policy and pays for smaller medical bills no matter who was at fault. For example, if a guest slips in your home and suffers a small injury, this could pay out regardless of fault. Coverage amounts are small and usually start at $1,000.
Additional living expenses
If you can’t live in your apartment because of a problem covered by the policy, additional living expenses coverage can pay for hotel bills, restaurant meals and other extra costs, like pet boarding fees. Remember to save all your receipts in order to make a claim.
This coverage is also called “loss of use.”
What’s Not Covered by Renters Insurance?
Renters insurance doesn’t cover the physical building you’re living in. The landlord’s insurance covers the building structure and common areas such as hallways.
Renters insurance also typically won’t cover incidents that happen in common spaces. For example, if a guest slips on an icy sidewalk, that would fall under the landlord’s liability insurance.
A standard renters insurance policy won’t cover your roommate’s possessions, vehicle damage or car theft, or damage caused by insects or pets.
Coverage for floods, earthquakes and mudslides is usually excluded but can be purchased through additional policies.
Extra Insurance for Renters
You can often add other coverage types to get even better renters insurance, such as:
- Flood insurance. Disastrous floods are on the increase and can wipe away what you own. Whether it’s a flood from a hurricane or torrential rain, renters across the country can be affected by flooding. Flood insurance for renters is available from FEMA and can start at $100 a year.
- Earthquake damage. Earthquake insurance for renters will cover damage to personal property in the event of an earthquake.
- Personal cyber insurance. Personal cyber insurance pays for expenses if you are the victim of a cyber attack or identity theft.
How Much Does Renters Insurance Cost?
Renters insurance is an expensive way to protect your belongings and get valuable liability insurance. Prices among renters insurance companies are often very similar. Here’s a look at average renters insurance costs among popular insurers.
Is Renters Insurance Worth It?
Renters insurance is an affordable way to cover personal belongings, and don’t forget about its liability insurance and coverage for additional living expenses.
Here are common scenarios that renters insurance can cover:
- Your personal belongings are destroyed. In a worst case scenario, like a fire, renters insurance will pay to replace your stuff. It’s a good idea to buy “replacement cost coverage” with your renters policy, so you’re reimbursed for buying new items, not the depreciated value of what you lost.
- Your personal belongings are stolen. Renters insurance covers items stolen inside and outside your home. For example, if someone steals your luggage from a hotel room, that’s covered.
- You own high-value items. If you own expensive items such as jewelry, art or musical instruments, renters insurance can pay to replace them if they are stolen or damaged by a problem covered by your policy. You may need to “schedule” certain types of items if your policy has sub-limits. For example, a renters insurance policy might have a $1,000 limit for stolen jewelry.
- Someone gets hurt while visiting your home. Accidents happen. If someone gets hurt in your home and you’re legally liable, renters insurance will cover medical bills, legal costs and judgments.
- You have a dog. If your dog bites someone—whether inside your apartment or away from home—you could suffer a major financial setback without renters insurance. Liability coverage within renters insurance can cover lawsuits like this.
- You need money to live elsewhere if your apartment is being repaired. Coverage for additional living expenses pays extra costs such as hotel bills and restaurant meals if you can’t live at home because of a problem covered by the policy. For example, if you have to live in a hotel after a fire, you can get reimbursed.
How to Get a Renters Insurance Quote Online
It’s simple to get renters insurance online. You can even do it from your couch and without talking to a human. Insurance company websites generally offer free quotes online.
You may want to have basic information handy, such as how much coverage you want for your belongings, and how much liability insurance you need.
When shopping for renters insurance, don’t make decisions based solely on price. Instead, use additional metrics like customer service and consumer reviews.
Do I Need Renters Insurance?
Renters insurance isn’t legally required, but a landlord might require it. Even if your landlord doesn’t mandate coverage, renters insurance can be a wise financial decision.
Average monthly renters insurance only costs about $10 for $15,000 worth of personal belongings cover. For that $10 a month, you get your personal belongings, such as furniture, clothing and electronics, covered if they’re damaged, such as in a fire.
Renters insurance also offered liability coverage and temporary living expenses if you’re not able to live in your apartment because of damage caused by a covered problem.
Can a Landlord Require Renters Insurance?
Some landlords are requiring that tenants purchase renters insurance in order to avoid potential liability claims from renters due to damaged property from problems such as fire. Theft is another reason a landlord may require renters insurance for tenants.
If your personal belongings are stolen, renters insurance typically covers this loss. Without renters insurance to recoup losses, a renter might decide to sue the landlord failing to protect the property.
Landlords who require renters insurance often do so by including a clause in the lease. For example, a lease might state that the renter must provide proof of renters insurance within 14 days of the first day of the lease.
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