Last updated: December 15th, 2022
Reviewed by
Grant Desselle
Licensed Insurance Agent
Table of Contents
Definition: Coverage that protects home or apartment renters and their belongings in the occurrence of a loss or damage. In situations such as theft, fire, or flood damage, renter’s insurance can provide support for lost or damaged items.
There are two types of renter’s insurance available: actual cash value payment or replacement cost payment. If you choose actual cash payment, your insurance agency will pay you the value of your belongings at the time of the claim as opposed to what you paid for them at the initial purchase. Replacement cost insurance means that your insurance agency will cover the cost to replace the item with the same or similarly priced product.
Now that you know the answer to, “What is renter’s insurance?”, we’ll discuss what exactly this type of insurance covers.
You may be asking, “What does renter’s insurance cover?”. This is a common question for many renters moving to a new location. There are quite a few coverage options for a renter’s insurance plan. Most comprehensive plans will include coverage for:
You now know the answer to the question “What does renter’s insurance cover?”, but what does renter’s insurance not cover? There are a few situations in which you may need to invest in supplementary insurance.
Every insurance plan typically has a maximum limit it will cover. If personal property damages or liability protection reaches that maximum, any additional coverage you need will not be given from your chosen insurance company. Discuss the limitations of your insurance plan with an agent to ensure that you are covered to the maximum extent.
In addition to maximum limits, there are natural disasters that may not be covered by your renter’s insurance. These include floods and earthquakes. Often, insurance companies will offer flood insurance plans for those concerned about flood damage.
Lastly, damage to the structure of your building will not be covered by your renter’s insurance plan. This is primarily because your landlord will be responsible for these damages. While tenants should be covered for their personal belongings and the interior of the home, landlords should have their own insurance plans to cover structural issues.
Natural disasters or personal accidents can happen to anyone. It’s best to be prepared for these situations, even if you feel they may never occur. Below are a few situations in which renter’s insurance is highly suggested.
Overall, having renter’s insurance never hurts. With plans at affordable costs, you’ll thank yourself later for making this investment if natural disasters strike, someone is injured in your home, or your space becomes temporarily inhabitable.
Renter’s insurance is not always required. Before you make this investment, verify with your landlord if renter’s insurance is required in your lease. If it is not, you have the option to not invest in this type of insurance.
There are a few situations where you may not need renter’s insurance, and that’s okay. You may learn that your landlord is able to cover damage or that your roommate’s insurance can cover anyone in the household. Maybe you’ve decided that you’ll be able to comfortably fund any replacements or repairs needed in the case of a disaster. If you feel that renter’s insurance is not a beneficial decision and you are not required by your landlord, you may choose not to purchase renter’s insurance.
If you’re wondering “How much is renter’s insurance?”, you’ve come to the right place. Though your renter’s insurance may vary depending on your state, there is a general average that you can use as a starting base when estimating the cost.
According to the Insurance Information Institute, the average cost of renter’s insurance is $14.90/month. However, there are a few factors that influence the overall cost of your renter’s insurance. These include:
Discuss these factors with your chosen insurance agency to determine the general monthly cost of your renter’s insurance.
There is an abundance of insurance companies that you can choose from when you’re ready to purchase renter’s insurance. You’ll have the option to receive quotes from these companies and choose the one that best fits your coverage and budget needs.
Insurance companies may offer their products in a variety of formats. These include:
Once you’ve chosen an insurance agency, your responsibilities will be clearly outlined in your contract. Get the most out of your renter’s insurance policy with the following tips:
There are two primary options that you’ll be faced with when choosing insurance. These are replacement cost insurance and cash value insurance. When choosing between the two, you’ll want to evaluate the cost vs. claim values.
Before you begin searching for insurance, take a look at your home or apartment’s claim history. You can do this by requesting a report from the Comprehensive Loss Underwriting Exchange (CLUE). If your home or apartment building has a low number of claims, you may be eligible for a lower insurance rate. Compare quotes and determine which is the most reasonable based on claims. If you likely won’t be making an overabundance of claims, you won’t want to overpay for your insurance plan.
You’ll also want to look for plans that offer discounts for extra safety precautions, lower deductibles, or higher coverage levels for an affordable price. This can be easily determined by receiving quotes from multiple companies and researching average policy benefits in your area. From there, you’ll be ready to compare your options.
With so many insurance companies out there, it can be overwhelming trying to decide which one to choose. Start by receiving quotes from a few different companies. Make sure that you keep your coverage level consistent across each company to have an accurate quote comparison.
The first place to look when you’re planning to compare renter’s insurance is your state department. Many departments publish updated reports on current insurance carrier claim handling rates. These documents can provide you with a clear picture of what you’ll likely be paying for renter’s insurance.
Insurance companies may also provide comparisons right on their website. They’ll offer convenient charts that break down their rates compared to their highest competitors. When using this resource, be mindful that not all of the information may be presented on the page. You’ll still want to conduct further research for a more accurate comparison.
As you research insurance companies, you’ll want to consider the following information to determine which is best.
As you begin your journey to buying renter’s insurance, there are a few essential steps you’ll want to take to ensure your experience is as seamless as possible.
You’ll need to know the rough value of your personal belongings. This will help you determine how much coverage you’ll need from your insurance plan. During this step, you’ll also want to look into your home or apartment to gain a better understanding of claim history.
Once you have an estimate of your belongings, you can figure out how much coverage you’ll need. Look into different plans and what coverage levels are commonly offered. If you’re unsure exactly how much coverage you’ll need, you may want to consider overestimating until you can speak with an insurance agent.
You’ll be able to request more precise quotes if you know the average coverage level you’ll need. Keep this level consistent with every company so you can more accurately compare companies. If you’re still unsure, you may want to choose two coverage options until you narrow down what you need.
Spend some time comparing quotes and looking into each company in-depth. Compare costs to your budget and select the best fit for both budget and cost. Review their customer service reviews, financial standing, discounts, and more.
The last step to buying renter’s insurance is to meet with an agent at your chosen company, select a plan, and sign your contract. You’ll have a chance to ask questions, compare internal policies, and review all documents.
While Insurist works with a variety of insurance companies to determine the best plan for our customers, there are a few companies that stand out amongst the rest.
When it comes to comparing renter’s insurance, it can be beneficial to simply start with the largest insurance companies out there. These include State Farm, Allstate, Liberty Mutual, and Travelers.
For renters looking for the lowest rates, Nationwide may be the way to go. With an average monthly cost of $13.43 and an A+ AM Best rating, Nationwide offers comprehensive plans at an affordable rate.
Customer reviews are another essential factor in your renter’s insurance search. The winner of the most popular insurance agency across customers is Erie Insurance. There’s no questioning this insurance company’s A+ AM Best rating. With plans that include worldwide personal property coverage, loss of use, injury liability, and more, they offer comprehensive coverage that will protect you everywhere you go.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Grant's past experience includes work as a licensed sales agent for Hagerty Insurance. He has reviewed thousands of existing auto policies across the nation and issued hundreds of new ones on everything ranging from classic cars undergoing restoration to modern exotics and motorcycles.
