According to a recent study, over 100 million Americans are now renters. Whether it’s an apartment or a condo, a rental property can provide flexibility and comfort without the responsibilities of homeownership. 

While your landlord is in charge of insuring the building itself, you’ll still want to protect your personal belongings inside the rental property. That’s where renters insurance comes in. A renters insurance policy protects you and the belongings in your rented property and also protects you from liability claims. Most renters policies have three parts: personal property coverage, personal liability coverage, and additional living expenses coverage. We’ll explore what exactly each part covers and how much of each coverage you need.

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Renters Insurance 101

Renters insurance, or tenant’s form HO-4 type homeowners insurance, gives renters peace of mind knowing their stuff is covered, no matter what. You’re probably wondering how much all of this costs. Insurify is all about taking the guessing game out of insurance rates. 

What is renters insurance?

A renters insurance policy protects you in the event of unexpected damage or loss on your rental property. In the same way homeowners insurance covers losses in a home, renters insurance covers an apartment or condo. 

What does renters insurance usually cover?

Renters insurance helps you be prepared when an unexpected loss occurs on your property. This could be theft, vandalism, a fire, or any other damaging incident caused by an outside force. 

Liability Coverage

Liability coverage comes in handy when there is an injury on your rental property. For instance, say you’re having a dinner party and one of your guest trips and twists their ankle. If they’re uninsured, liability coverage will cover their medical payments up to the extent of your coverage limits

Keep in mind that with a renters insurance policy, you pay a deductible. Your deductible is a set number that you’re responsible for paying in the event of a claim. If, for instance, you set your deductible to $300 and you have a $700 medical bill, you’ll pay $300, and then your insurance company will cover the rest. Note that a lower deductible can lead to higher monthly insurance premiums and vice versa.

Personal Property

Personal property coverage protects your items and covers the costs of replacing and repairing them in the event of an incident. For instance, say a burglar breaks into your apartment and steals your laptop. Renters insurance will help you cover the costs of replacing it.

When you’re shopping for a renters insurance policy, note which policies offer actual cash value and which offer replacement cost coverage for personal property. Actual cash value coverage takes into account the depreciation in your item’s value, while replacement cost coverage compensates you so that you can replace the stolen item with a brand-new version of that item.  

Additional Living Expenses (Loss of Use) Coverage

Additional living expenses coverage covers all of those other costs that come up when you file a claim. For instance, say there’s a fire at your apartment and you have to vacate the building for a couple of weeks. This part of your policy covers any hotel bills you incur in that time.  

Add-Ons and Optional Coverage

Perhaps you own some valuables, such as a coin collection or some fine art pieces. Your standard personal property coverage may not cover these rare or high-priced items. In this instance, you might want to look into scheduled personal property coverage, which is a form of additional coverage that will cover damage to these particular items. 

A standard renters insurance policy might not come with all the types of coverage you feel you need. For instance, if you’re in the Midwest in an area prone to windstorms, you might want to add windstorm coverage to your renters insurance policy if it isn’t already included. The same can be said for flood insurance, water damage, and other property damage that might not be classified as “covered perils” in your standard policy.

Although it doesn’t necessarily count as an “add-on,” you may find it’s worthwhile to increase your coverage limits. To figure out the amount of coverage you need, take an inventory of your personal belongings. On average, the personal belongings in an average two-bedroom apartment are worth around $20,000. If you take inventory and feel you need more coverage, reach out to an insurance agent, who can walk you through your options for increasing your coverage limits or your liability limits.

What Renters Insurance Doesn’t Cover

When you shop for your renters insurance coverage, keep an eye on what is and isn’t covered. In many cases, “acts of God,” such as damage from an earthquake or sewage backup, are not covered in a standard renters insurance policy. Certain special items, like artwork and antiques, are also not covered and may require additional insurance. And of course, damage to your property caused by your own negligence or carried out intentionally is not covered by renters insurance.

Average Cost of Renters insurance

The national average for renters insurance is only $15 per month. Keep in mind this price will vary based on the insurance company you work with and the living situation you find yourself in. For instance, the price of your renters insurance can vary based on the number of roommates you have or whether you have any pets. Owning a dog increases the chances of dog bites occurring on the property, which might make liability insurance more expensive. 

You may qualify for certain renters insurance discounts, which will lower your monthly rate. For instance, if you equip your apartment with deadbolts, this lowers the likelihood of your filing an insurance claim due to a burglary. Furthermore, most insurers will provide you with a discount if you bundle your renters insurance with another one of their policies, such as auto insurance

Should I get renters insurance?

More landlords are beginning to require renters insurance for all of their tenants. But if renters insurance is optional for you, it’s worth weighing the pros and cons. 

Pros Cons
Generally affordable. If you’re bundling renters insurance with an existing policy, you might only be paying a few dollars a month for renters insurance. Not too many discounts. While renters insurance is cheap, most insurance companies don’t offer too many discounts on this type of insurance. The price you see is close to what you’ll end up paying.
Peace of mind. Your personal belongings are important to you. With renters insurance, you don’t have to worry about damaging or losing these items.  A standard policy covers only the basics. If you’re in an area with extreme weather or if you own many valuable items, you might want to look into coverage add-ons.  
Liability protection. You never know what could happen on your rental property. With renters insurance, you’re covered in the event of bodily injury Exclusions. Some renters insurance policies exclude certain dog breeds from their coverage. Read the fine print, and get a policy that meets your needs. 

How to Get Renters Insurance 

So you’ve decided renters insurance is a must. Now let’s get started finding the right policy for you.  

  • Understand your living situation. Do you have roommates? Do you own pets? Where is your rental located? Does this area experience extreme weather? Do you own valuable personal items? These are a few things to keep in mind as you begin shopping for renters insurance.
  • Take an inventory of your personal belongings. It’s time to take stock of everything you own. Add up the value of your furniture, electronics, clothing, and any other items in your rental property. This will help you determine how much renters insurance you need.
  • Start browsing different policies. It’s time to get online and search for different renters insurance companies. You know your situation and your inventory, so it’s time to find a company that caters to your specific needs. Take note of any discounts you might qualify for, such as bundling discounts or safety feature discounts.
  • Connect with agents. Once you’ve found a few companies that interest you, reach out to them over the phone or online to receive a quote. This will give you a good idea of how much you’ll end up paying.
  • Choose a company and sign up! Once you’ve found the right coverage at the right price, don’t hesitate: reach out to an insurance agent and finalize your policy.

FAQ: What Is Renters Insurance and How Do You Get It?

What is renters insurance?

Renters insurance is a form of property insurance that applies to rental properties like apartments and condos. It covers your personal property and protects you from liability claims.

Does renters insurance cover theft?

Most renters insurance policies do cover you in the event of theft. Always check the fine print of your policy to know exactly what qualifies as a covered loss.

How much does renters insurance cost?

Average renters insurance costs $15 in the United States. These prices can vary based on your living situation and the insurance company you’re working with. Insurance discounts may be able to lower the cost.

What’s the best way to compare insurance quotes?

If you’re looking to compare insurance quotes side by side, Insurify has your back. Simply enter some basic information about yourself, and Insurify will give you 10+ free quotes so that you can pick the policy that meets your needs and budget.

How to Find the Best and Cheapest Renters Insurance

Searching for renters insurance shouldn’t be a hassle. With a bit of research, you can quickly find insurance that meets your needs and budget. Insurify can help you research your coverage options to get the right insurance for your situation.

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Updated June 1, 2021

Mark Steinbach is a writer based in Brooklyn, NY. In addition to his years of work as a copywriter, he is also a TV writer with a degree in English from Harvard University. When he isn't writing, he can be found playing tennis or doing crossword puzzles.