What Is Renters Insurance & Do You Need It In 2022?
If you’re renting a home or apartment and you don’t have renters insurance, then you are incredibly vulnerable for tragedy..
You could lose your possessions in a fire, burglary, a burst pipe, or other disasters.
Many renters believe that their landlord’s insurance will cover them for damages, but, this isn’t the case.
It’s not your landlord’s responsibility to provide you with temporary housing if a fire destroys your home; so rental insurance acts as a safety net against many “worst-case scenarios.”
In this post today, you’ll learn everything about renters insurance such as what it covers and how much coverage you should get.
What Is Renters Insurance and Why Do I Need It?
“In Plain English,” a renters insurance policy is protection against the loss of personal property while living in a rental home or apartment.
A renters insurance policy not only protects your belongings, but it can also help cover your medical bills and personal liability.
For just a few dollars a month, you can have peace of mind that everything in your home is protected.
Plus, your belongings are also covered when you travel.
So, if your car gets broken into, your luggage gets stolen overseas, or someone at a café spills coffee on your laptop, then your items are all covered by renters insurance.
The insurance company refers to these threats as “perils.”
Just as homeowners purchase home insurance, renters should carry renters insurance.
Renters insurance also covers personal liability, in case you accidentally hurt someone else or damage their belongings, whether they are in your apartment at the time or not.
Finally, most renters insurance policies pay for alternative housing arrangements if needed after you file a claim.
That’s what renters insurance is used for, in a nutshell and below I will go into more detail about what it covers.
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What Does Renters Insurance Cover?
Renters insurance serves to protect your personal belongings – such as your furniture, television, laptop, bicycle, and anything else you own.
16 different events qualify for renters insurance coverage, including fire, theft, vandalism, smoke damage, falling objects, and leaking from overflowing water.
Most people think of renters insurance covering only your personal property, but a policy also affords you other types of coverage as well.
Personal Property
Anything that you own is eligible for coverage, from your furniture to your shoe collection.
With the exception of expensive jewelry and valuable collectibles, a basic renters insurance policy will cover the following:
Personal Liability & Medical Bills
Accidents happen, and if someone is injured at your home (or you inadvertently injure someone when you’re out on the town), you could be held liable for damages and medical expenses.
Your renter’s insurance would cover you for these instances, but keep in mind that if you’re injured, you won’t get any benefits. Your injuries would default to your medical insurance.
Loss of Use
If your home is uninhabitable as a result of a covered incident, the “loss of use” clause in your policy pays for temporary housing arrangements, including a hotel or a short-term rental.
In some instances, you may receive a per-diem to cover food costs, especially if they exceed your typical grocery bill spend.
Other Types of Coverage
Renters insurance can be truly comprehensive and cover circumstances that you might not have thought of:
Other people’s property: If you borrow an item for a friend or neighbor and it gets damaged in a covered event, then your policy would pay for the item to be replaced.
Your property in other locations: Your policy will cover your belongings, even if they’re not inside the walls of your home. This includes your car, your storage unit, or anywhere you travel.
Food: A power outage can ruin all the food in your refrigerator, but thankfully, your renter’s insurance would cover the replacement cost of the groceries that spoil.
Credit card and bank forgery: Though banking companies have stepped up and increased their protection for fraudulent charges, you’ll have peace of mind knowing that your renter’s insurance will also protect you if someone steals your credit card or checkbook.
RENTERS INSURANCE WHERE YOU LIVE
Renters insurance by state.
As a home renter, there are insurance policies available for you regardless of where you live.
With quality Renters Insurance, you can protect your home and everything inside it. For more information, click on your state.
What Isn’t Covered by Renters Insurance?
Despite how useful and valuable renters insurance is, it doesn’t cover absolutely everything.
Before you get surprised by an uncovered event, it pays to know what renters insurance won’t cover:
Property damage caused by pests
Rodents, termites, and other pests and vermin can cause significant damage, but unfortunately, these damages aren’t eligible for reimbursement with renters insurance.
Natural disasters
Floods, earthquakes, and sinkholes won’t be covered, but some natural disasters are still eligible, including volcanoes and windstorms.
If you live in an area prone to natural disasters, consider purchasing a separate policy.
High-value items
Basic policies have restrictive limits that might not provide enough coverage for expensive items like antiques, precious jewels, and art.
To protect these valuables, you’ll likely need a separate policy.
Nuclear war and terrorist activities
Since 9/11, terrorist activities are no longer included in most policies.
Your roommate’s property
Even though other people’s property can be covered if you damage it, people that live in your home need their own policy if they want to be covered.
You can potentially get a discount by purchasing a joint policy with your roommate.
Things you can’t prove ownership of
Renters insurance won’t cover anything you can’t prove you own. It’s a good idea to perform a home inventory.
Go room-by-room and write down the name of each item you own, take a photo of it, and document how much you paid for it.
It’s even better if you can show receipts for your items.
Download an app like Shoe boxed to help you store all your receipts easily in the Cloud by taking a picture with your phone.
How Much Renters Insurance Coverage Do I Need?
Most renters insurance policies cover up to $30,000 in personal belongings. If your most expensive possessions are a 32-inch TV and a netbook, a basic policy should fit your needs.
If you have expensive collections, pricey electronics like a home theater system or listening room, or lots of expensive jewelry, you’ll want to add a rider to your policy to cover these items.
Most policies also include $100,000 in personal liability coverage. That means your policy will pay up to $100,000 in medical bills if someone is injured on your property.
If you frequently entertain, you may want to increase this coverage, since the likelihood of someone getting hurt on your property increases the more frequently people visit.
Do determine the level of coverage you need, add up the total value of your belongings. You’ll need this inventory information, anyway, if you ever have to file a claim.
Who Is Covered by Renters Insurance?
Your renters insurance policy covers you, your personal belongings, and the personal belongings of anyone in your family, including a spouse or children, parents, or brothers or sisters who are living with you.
However, if you have a roommate who is not related, their belongings aren’t covered. They will need their own renters insurance policy.
Do I Actually Need Renters Insurance Coverage?
Unlike home insurance, which your bank will require if you have a mortgage on your house, renters insurance isn’t required by law.
However, your landlord may request that you take out a renters insurance policy as a condition of your lease. Even if your landlord doesn’t require renters insurance, it’s a good idea to have it.
If your apartment has a fire or your roof is leaking and you can’t live there, your landlord’s insurance policy will pay for the apartment repairs. But it won’t cover your belongings. It also won’t provide you with a place to live while the apartment is fixed.
Most importantly, the liability aspect of your renters insurance policy can protect you from going bankrupt due to medical bills and legal costs.
For the cost – which is much less than most other insurance you can buy – renters insurance is a smart investment to save you a lot of headaches.
Can I Update My Coverage After I Buy a Policy?
What if you purchased a renters insurance policy with coverage of $30,000 for your personal belongings. But you just used your tax refund to buy a pricey new computer, a carbon fiber racing bike, and a bigger TV.
You also updated your living room furniture, finally replacing that set from the thrift store with a new sleeper-sofa. Or maybe you got engaged and you’re sporting a diamond on your finger worth more than you paid for your first car.
Circumstances change and you may wish to update your renters insurance coverage after your purchase your policy. To do so, you’ll want to check your coverage levels. Look at your renters insurance declaration page to see how much coverage you have.
Then get in touch with your insurance agent and ask to make a change. Depending on the additions to the policy, your agent may recommend putting certain items – such as that diamond ring – on a rider.
Or it might make sense to increase coverage levels across the board, insuring your personal belongings for $50,000, $100,000 or more.
Renters Insurance made easy!
Agents not required.
Get quotes and sign up online without talking to an agent. But, we are here if you need us.
Unbiased, expert advice.
Get unbiased insurance education from licensed agents and also avoid dodgy sales calls.
Coverage in minutes.
You can get renters insurance coverage within minutes of getting your quotes and applying.
How Much Is Renters Insurance?
The national average cost of renters insurance sits around $180 a year, or $15 a month and dollar for dollar, renters insurance represents a solid investment to protect your belongings and to protect yourself against a lawsuit if anyone is hurt due to your actions or within your apartment.
And though I wouldn’t recommend it, you can also reduce your renters insurance premiums by increasing your deductible. Your deductible is the amount of money you must pay out-of-pocket before the insurance company pays the rest of your claim.
So, if your $1200 laptop is stolen from your car and your renters insurance policy has a $500 deductible, you’ll need to pay $500 and will receive $700 from the insurance company to cover the laptop.
It’s a good idea to make sure you have enough money in your savings account at any time to cover the deductible, otherwise the insurance company won’t pay out your claim. You may also secure a lower rate if you bundle your auto and renters insurance policies with the same insurance company.
Rental Insurance Myths
There are several myths about rental insurance that we should clear up before we start discussing what it will actually cover or not cover:
A Renter’s Insurance Policy Is Too Expensive
This myth couldn’t be the furthest from the truth, the average renter’s insurance policy nationally runs at around $12.00 per month or $144.00 per year.
These policies usually have $10,000 in personal property coverage, about $100,000 of renters liability insurance and a $250.00 deductible.
If you take the above information into consideration, you can easily see you are able to get renters insurance for cheap without losing a large amount of the benefits.
You’re Covered By Your Landlord
Anyone that owns your property, a landlord or even a property manager is only responsible for any damage or loss to the actual apartment complex itself.
They are not responsible for your personal property.
So:
If your neighbor’s water heater explodes or the building is on fire, the property owner’s insurance will cover the damage to the walls or structure of the apartment.
The landlord’s insurance company will not pay for any damages or loss that you incur from either of those situations.
That is where your renters insurance will kick in and cover your loss.
Most apartment complexes are requiring renters insurance coverage before you can move into your unit.
You Won’t Need Cash While Waiting For A Claim
Outside of your normal job there are tons of side jobs or gigs you can do to make $400 Dollars or more really fast.
The worst position you can put yourself into is needing to file a claim but not having the available cash to take care of yourself and your family until help arrives.
It is always a good idea to keep a side stash of cash for situations just like this.
RENTERS INSURANCE WHERE YOU LIVE
Renters insurance by state.
As a home renter, there are insurance policies available for you regardless of where you live.
With quality Renters Insurance, you can protect your home and everything inside it. For more information, click on your state.
How to Get Renters Insurance
If we’ve answered most of your questions about renters insurance, you may still be wondering how to get renters insurance.
Figure Out How Much You Need
The first thing you need to do is figure out how much coverage you need. This should be fairly simple for you to do since you have read this article. Essentially, figure out what you need to protect and get enough coverage to protect it.
Once you know how much coverage you need it’s time to do some comparison shopping and to get some quotes. Your goal is to get instant quotes that don’t require personal information. Once you have a few quotes it’s time to read some reviews.
At this point you should have one or two insurance companies that you want to go with for coverage. Your next goal will be to find a few online reviews about each company to learn more about them and how their product works. You should do this step 100% of the time because some products have added bonuses that you might not be aware of.
Once you find the price you like and the company you want to do business with, it’s time to apply online. This process is usually super simple and you can have your coverage start immediately.
Taking Action
Unless your landlord requires you to have it, you might not think you need renters insurance. However, given that policies can cost as little as $20 per month or less, it pays to have protection.
You never know what can happen, and having to replace all of your items at once can be financially catastrophic. Don’t waste any time thinking about this, if you need renters insurance, we’ve done the hard work for you—check out the top three companies or get your free renters insurance quote today.
