A renters insurance deductible is the amount your insurer deducts from your payout for an insurance claim. Similar to home insurance, your deductible represents your portion of the shared cost between you and your insurer.1
Deductibles are a standard part of most insurance policies and can be either a fixed cost or a percentage of your total coverage amount.
Here’s a look at how renters insurance deductibles work and which deductible you should choose.
Renter insurance protects your belongings and provides coverage when renting an apartment, condo, or house. It provides personal property coverage, liability coverage, and additional living expenses coverage.2
For example, renters insurance covers damages if a fire destroys your personal possessions. If your home needs repairs and you’re forced to temporarily relocate, your coverage should pay for any additional living expenses, like hotel charges or food.
And if a guest falls and is injured, renters insurance should cover their medical expenses and provide coverage if they sue you for damages. It’ll also provide coverage if you or a family member damages another person’s personal property.
Your landlord likely has a landlord insurance policy, but it’s not the same thing as renters insurance. This policy provides dwelling coverage to the structure if a fire, storm, or other covered peril damages or destroys it.
If you have to file a renters claim with your insurance company, your insurer will subtract your deductible amount from the final payout.
For example, let’s say someone breaks into your apartment and steals $1,500 worth of valuables. If you have a $500 deductible, your insurer will pay $1,000 toward your claim after subtracting the $500 deductible.
A deductible is how you share risk with your insurer, so the higher your deductible, the lower your premiums because you’re taking on more up-front risk yourself. That’s why most renters insurance policies require a deductible. You may be able to avoid a deductible on certain types of coverage, but personal property coverage always comes with a deductible.
Renters insurance deductible amounts can range from $250 to $2,500 on personal property claims. The most common deductible amount is $500, but $250, $1,000, and $1,500 are also common options.
If you’re applying for an online quote and aren’t happy with the deductible amounts offered, you might try working with an insurance agent instead to secure a higher deductible amount.
Here are four popular insurers and the different deductible amounts they offer:
When you sign up for renters insurance, different types of coverage within your policy may have different deductible amounts. For example, personal property coverage may come with a different deductible from your earthquake, flood, or jewelry coverage.
The deductible you choose can have a big effect on your insurance rates. Since a deductible is how you share the risk with your insurer, a higher deductible leads to lower monthly rates and vice versa.
If you choose a high deductible, you’ll receive lower monthly rates, but you’ll have to pay more out of pocket when filing a claim. If you choose a low deductible, your monthly rates will be higher, but you’ll pay less out of pocket.
Here’s an example: Let’s say you have a renters insurance policy with a $1,000 deductible and a low monthly rate of $20. If you experience $3,000 in property damages, your insurer will pay you only $2,000 after deducting the $1,000 deductible.
In comparison, let’s say you have a $250 deductible and pay a higher monthly rate of $40. If you file the same claim, your insurer will pay you $2,750 after subtracting $250. But if you rarely file claims, you could end up saving more in premiums over time with the higher-deductible policy.
Choosing the right deductible for you directly affects your monthly premiums and how much you pay after filing a claim. Here are a few things to consider when choosing your deductible amount:
When you understand how deductibles work, you’ll be able to make the best choice for your situation. Here are the answers to some commonly asked questions about deductibles you may find helpful.
That depends on your goals. A $1,000 deductible is a better option if you want a lower monthly premium. A $500 deductible is a better option if you want to pay less money out of pocket after filing a claim.
As the tenant, you’re responsible for paying your renters insurance deductible. Once your insurer approves your claim, it’ll deduct the amount when paying out the claim.
Whether you have to pay your renters insurance deductible depends on the circumstances and the type of coverage you have. If someone else damages your rental home or apartment and you file a claim, you may have to pay for the initial repairs and get a payout from your insurer. But your insurance company can seek reimbursement from the at-fault party’s insurer.
A good deductible amount is one that you can afford to pay if you had to file a claim. Some people choose a slightly higher deductible to save on their monthly premiums, but make sure you have that money set aside in savings.
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