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Edited by John Leach
Last Updated September 15, 2021
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8 Essential Tips to Get the Most Out of Renters Insurance
Set coverage limits to match your needs.
Pay attention to coverage sublimits.
Additional living expenses (ALE) and liability protection are must-haves.
Choose replacement cost value (RCV).
Create a detailed home inventory with photos and, when possible, receipts.
Share your inventory with your insurer before you make a claim to ensure your policy fits your needs.
Take advantage of discounts.
Review your policy documents.
Reddit is the seventh most visited website in the U.S. Millions of users come together to share know-how, news, and other information. It’s a great place to ask questions and get answers from people with real experience. Plus, posts can be upvoted by users when they find them especially useful.
We love the subreddits (channels devoted to specific topics) r/ personalfinance and r/insurance. And we scoured those posts for the best advice on renters insurance. Here’s what we found.
1. A Successful Claim Starts with a Well-Made Home Inventory List
If you’re a first-time insurance buyer, you should know: your insurance company will commit the bare minimum to your claim. The more work you put in up front, the better off you’ll be. You’ll get a more accurate payout, and you’ll be reimbursed faster.
Creating a home inventory also gets you an accurate value of your personal belongings. Many renters accidentally lowball themselves when they estimate their needs. Remember: your policy will only pay up to the coverage limit (minus the deductible ), no matter how well you make your inventory.
Share your home inventory with your renters insurance company before you need to make any claims. An agent there will guide you on whether you need riders or a “schedule” for your high-value or unusual items (more on these below).
Finally, ensure you’re covered for the replacement cost value (RCV) of your property. RCV is the standard on many policies, but sometimes, insurers use actual cash value (ACV) to determine payouts. The difference is big. RCV pays whatever it costs to replace your item, while ACV pays the value of your item minus depreciation.
2. Make a Home Inventory with a Simple Spreadsheet—It Makes the Claims Process That Much Easier
A digital spreadsheet is a great way to get all your home items listed accurately in one place. This format is easy to share and can be saved to the cloud for retrieval from anywhere. To get the most from your inventory:
Add the make and model number.
Add serial numbers when applicable.
Include a picture of the receipt.
Sort your belongings by category to estimate sublimit needs.
While it may seem like a lot of extra time, getting specific helps you get a more accurate payout in the event of a claim. Consider the difference between these two records:
Russell Hobbs TRL9300GYR 2-Slice Glass Accent Long Toaster, Silver & Stainless Steel, Bought on Amazon, $79.57
The average home doesn’t have an $80 toaster. If you use the first entry, you’ll end up with a $10 payout at most. But the second entry will get you $79.57.
Bottom line: it pays (literally) to be thorough.
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3. Use Photos to Record Your Belongings Accurately
Photos are a great way to record items. With some spreadsheet software, you can upload a photo into a cell for easy retrieval. Plus, you can photograph serial numbers and any other important information you want a copy of.
While photos add information to a home inventory, they’re not a perfect substitute for writing it out. In the event of a claim, you would need to translate those photos into a list for your insurance provider. You can just hand over photos and hope for the best, but you’ll likely receive less than what you deserve.
4. Low on Time? Use Video to Make a Home Inventory List
A quick way to get a home inventory is to make a video. You should go through each room in your house and describe the items as you record. This is a great way to start but should not be the end of the process.
Like using photography, video is more of a reference for you to later make a list of items. Your insurer is not going to spend the extra time to interpret things perfectly. If you want an accurate reimbursement, it’s always best to create a spreadsheet and use the video as added proof.
5. Heavy Amazon User? Try This Home Inventory Hack
Did you know that Amazon offers a complete history of your purchases? All you need is to log into your account, and you can download a complete list of your purchases straight into a spreadsheet.
And Amazon is not the only online retailer that keeps long records of purchases. If you created an account when you purchased something, you can likely get a digital copy of your purchase. If you can’t download a list, take a screenshot. Then, upload the screenshot into your spreadsheet.
6. Pay Attention to Your Policy’s Sublimits (Especially When You Own Unusual or High-Value Items)
When you buy your insurance policy, you may think that, as long as the total coverage limit meets or exceeds your property value, you’re good. But you’d be wrong. Most policies are further divided into sublimits—coverage limits for categories of items.
For example, you may have a $50,000 policy with an electronics sublimit of $2,000. One cell phone can exceed half that limit. Add a computer and a television, and you’ve exceeded it. Sublimits apply to jewelry, clothing, and more.
Policies have standards set for each sublimit. The standard is meant to meet the needs of the average renter. However, many people exceed those averages. Chances are you’ll exceed one of your sublimits—another reason a home inventory can make your life easier.
Specialty items like collectibles and antiques almost always need special coverage. Work with your agent directly to create a policy that fits your needs.
7. Sometimes You Need to “Schedule” Unusual and High-Value Items (or Add a Special Rider)
If you have an expensive watch collection, designer clothing, antiques, or collectibles, you’ll need to adjust the average renters insurance policy. You can work with your insurance agent to ensure that you’re getting full coverage for your belongings.
Start by creating that home inventory and sharing it with your agent. You may need an appraisal for certain items. Don’t be afraid to ask questions and get things in writing—and always review your policy documents at the end of the process.
If you add to your collection of specialty belongings, be sure to update your home inventory and your insurer.
8. Yes, You Need Personal Liability Protection
Renters insurance isn’t just property coverage. Personal liability protects you when someone gets hurt in your home. It can also protect you from libel and identity theft and if you cause damage to someone else’s property.
This is valuable, inexpensive protection. And you typically can’t buy liability insurance on its own. You should also consider increasing your limits for liability coverage of your policy. Litigation fees and medical bills can get out of hand quickly.
9. Water Backup Is Up for Debate, But Consider Your Circumstances Before Deciding
As this user explains, water backup (sometimes called sewer backup) is most damaging to the structure of a home. In a homeowners policy, water backup is most applicable to dwelling coverage. But when you’re a renter, you don’t own the dwelling—or the major appliances most vulnerable to damage.
However, we’d like to add some food for thought. If you live in a garden apartment (below grade) or a first-floor apartment, you are more likely to experience backup that could cause significant (and expensive) water damage. Ways to prevent loss in this scenario include:
Buy water backup coverage, especially if you’re below grade.
Elevate your personal belongings, especially high-value items.
Treat your drains well—don’t put anything down them (like grease) that could cause issues.
Report any drain issues to your landlord immediately.
Water backup coverage is inexpensive. And if water backup makes your home temporarily uninhabitable, you need water backup coverage to claim additional living expenses reimbursement.
10. Additional Living Expenses Has Limits But Probably Covers More Than You Think
Additional living expenses (ALE) is meant to cover you when you need to temporarily live outside your home. It’s sometimes also called “ loss of use coverage.”
As this user points out, ALE has a standard limit set by your insurance company. This should be easy to find in your policy documents. You can raise these limits, which is a great idea if you live in an expensive area.
And remember: it’s not just hotel costs. Extra gas, increased grocery bills, and other unexpected expenses tend to come up when you need to suddenly live somewhere else. Our advice is to increase those limits. A dollar more a month can get you $5,000 worth of coverage.
Frequently Asked Questions
In short, you need enough coverage to make you whole in the event of a total loss. For many, that will fall somewhere between $20,000 and $50,000. Remember that renters policies come with sublimits for coverage of items like jewelry. To ensure all your coverage limits are set properly, create a home inventory list and share it with your insurer.
You should choose a deductible that you can reasonably afford in the event of a claim. Many renters set their deductible between $500 and $1,000. Remember that higher deductibles often get you lower insurance premiums. Just be sure to keep enough money in your emergency fund to cover this cost.
The easiest way to save on renters insurance is to take advantage of discount programs. Bundling your renters with auto insurance is a great way to get a quick discount. Most companies also offer discounts for security devices, like alarms, deadbolts, sprinklers, and more. You should also shop around before you buy to compare pricing from top companies in your area.
Most major insurers allow you to bundle your auto policy with renters. That includes State Farm, GEICO, Liberty Mutual, Progressive, USAA, and more. But don’t shy away from exploring smaller, local insurers.
Umbrella insurance covers the gaps that other policies leave unattended. Umbrella policies are great to add because their cost is low—typically under $100 per year—while coverage levels are high. Plus, if you buy an umbrella policy through your current insurer, you can qualify for a bundling discount that may cover part or all of your umbrella policy’s cost.
Renters Insurance Is Always Worth It
Unlike many other types of insurance, last year premiums fell for renters insurance. In fact, premiums are typically one-tenth the cost of a homeowners policy.
Why are costs so low? Renters insurance is proportional to the cost of your personal property. You don’t have to insure the big-ticket items, like your dwelling and all its fixtures. Plus, liability and other add-ons are also inexpensive.
Renters insurance protects you from house fires, theft, lawsuits, and other common perils. And it can fill in gaps left by health insurance and credit card fraud protection. All in all, you get a lot of peace of mind for a few dollars a month.
So, whether you live in a high-rise apartment complex, a townhouse, or a single-family home, rental insurance is essential.
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