)
Renters insurance is an affordable protection that can provide peace of mind. It insures your belongings, protects you from financial liability, and pays for additional expenses if a covered event makes your rental home temporarily unlivable.
Since you’re not insuring a building structure, a renters policy is pretty cheap for the protection it provides. The national average cost of HO-4 renters insurance is $20 per month, or around $240 per year, according to Insurify’s analysis of Quadrant data.
Do you need renters insurance?
Everyone who rents their home should have renters insurance. Many rental agreements require tenants to buy their own insurance coverage. Your landlord’s insurance policy doesn’t protect your personal items. So if you don’t have renters insurance, you’d be responsible for paying out of pocket to replace your belongings.
For example, imagine a fire in your building destroys most of your personal items. Your landlord’s policy covers the structural damage but not the items in your unit. Without renters insurance, you have to replace all your belongings using your own money.
With renters insurance, you file a claim with your insurance company for reimbursement or replacement for your damaged items. After investigating the incident, your insurer provides a settlement that you can use to replace the damaged items with new ones.
The loss of use coverage in your renters policy also pays for temporary housing if the fire leaves your home uninhabitable.
What renters insurance covers
Renters insurance covers many different losses you might face as a tenant. It covers damage from disasters like fires and windstorms. It also covers falling objects, hail, theft, vandalism, power surges, and sudden or accidental water discharge from a burst pipe or overflowing bathtub in an apartment.
Most renters policies cover personal property, liability, medical expenses, and loss of use. Here’s what each coverage does.
What renters insurance doesn’t cover
Like home insurance, renters insurance has some common coverage gaps. Here’s what your policy never covers:
Flood damage: You can buy flood insurance from the National Flood Insurance Program or a private insurer. This could be a good additional protection if you live in a ground-floor apartment or a storm-prone area. Renters insurance does cover water damage from events like a pipe bursting or an upstairs tenant leaving the water running and causing an overflow into your apartment.
Earthquake damage: You can get coverage for earthquake damage from state-backed or private insurers. This will reimburse you if an earthquake damages your belongings.
Vehicle damage: Renters insurance doesn’t cover damage to your vehicle. You need collision or comprehensive auto insurance for that protection. Your policy may reimburse you for belongings someone stole from your car, up to a limit.
Consider customizing your coverage if you have expensive valuables or want extra protection. For example, you can increase your liability coverage limit or add an umbrella liability policy.
You can also add an “endorsement” or a “floater” to get more coverage for valuables like jewelry, collectible items, and special or expensive sports equipment. Renters policies typically have a lower personal property limit for valuables, so it’s good to assess whether you need extra protection.
How to get a renters insurance quote
Renters insurance helps protect your possessions, cover your liability, and reimburse you for additional living expenses if your apartment isn’t livable. Here’s how you can get a renters insurance quote.
1. Gather personal information
First, gather all your personal information, including your name, date of birth, email, phone number, and current address (the unit the policy covers). You may also need to provide your last address and Social Security number. Some insurers also ask what kind of building you live in, like a two-family home or a high-rise.
If you want to add a roommate to the policy, be sure to collect their information as well.
2. Consider how much coverage you need
This is probably the most important step. You want enough coverage to protect yourself but don’t want to pay for what you don’t need.
The best way to do this is to make even an incomplete home inventory checklist. (You can always add to it over time.) Walk through each room and take photos of things like furniture, clothing, electronics, tools, and hobby materials. Store any receipts you have, and keep that information safe.
To select your liability limits, consider your net worth. This coverage protects you if someone gets injured in your home and files for damages. Medical expenses coverage pays for bills if someone else is injured in your home. Limits are usually relatively low.
Loss of use coverage will also have a smaller range. A higher limit means more coverage if your unit is unlivable and it costs more to stay elsewhere.
Note if the insurer offers any optional coverages. For example, you might be able to add extra protection for personal electronics or disaster insurance like earthquake coverage.
Lastly, decide on a deductible. That’s what your insurance deducts from your payout after a claim. A higher deductible means a lower monthly payment. But you’ll get a smaller payout when you file a claim. Think about what works for your budget and cash flow.
3. Look for discounts
Discounts can help lower your premium costs. Here are some examples of things that can earn you a discount:
Bundling with auto insurance
Paying your premium in full
Paying online
Shopping for a policy before a current policy ends
Being claims-free
Having an in-building security system
4. Compare quotes
Shopping around and comparing quotes is the best way to save money on insurance. It also helps you find the best fit.
The Insurance Information Institute recommends getting quotes from at least three different insurance companies. Once you identify your coverage needs, you’re ready to compare quotes and find the best deal on what you need.
Average cost of renters insurance
Renters insurance is a relatively affordable protection. The national average cost of renters insurance is $20 per month for $30,000 of personal property coverage and $100,000 of liability coverage, according to Insurify analysis of Quadrant data.
Renters insurance quotes vary between insurance companies and around the country. Insurers calculate premiums differently, and your location, pets, credit history, coverage amount, deductible, and other factors also affect premiums.
Here’s the average monthly cost of renters insurance by state.
Renters insurance with roommates
You can get renters insurance if you live with roommates. But it’s important to know that your renters insurance policy won’t automatically cover the other people you live with (and vice versa). Depending on your state and insurance company, you might be able to add a roommate to your renters insurance policy so you both have coverage.
But sharing a renters insurance policy with roommates has downsides. For one thing, you’d have to adjust your renters policy every time you change roommates.
Plus, a claim anyone makes on the policy will affect your insurance history and could result in higher rates. And, while no one wants to think about it, a falling out between you and your roommates could seriously complicate the claims process (and even lead to legal action).