Renters Insurance: The Basics
According to the Insurance Information Institute, the average cost per month of renters insurance in the U.S. is around $15 per month.
That means that the average U.S. renter is paying around $180 per year for insurance, making renters insurance one of the most affordable insurance types.
Average Cost of Renters Insurance by State
But what is that money going towards?
A renters insurance policy protects you and the belongings in your rented property from misfortunes like property damage, theft, liability claims, and other accidents and unexpected events.
Renters pay a premium ––a monthly payment––each month in exchange for their renters policy. In exchange, their insurance company promises to provide them with coverage.
If a renter chooses to exercise this option––if, for example, their prized Ming vase was shattered as a result of a freak windstorm ––the renter files a claim with their insurance agency. The renter (also known as the policyholder ) then pays a deductible ––a predetermined amount of money paid out-of-pocket for each claim––and the insurer takes care of the rest.
Renters insurance covers three main categories: personal property coverage, personal liability coverage, and additional living expenses coverage.
Liability coverage: Provides liability protection: may cover medical expenses, property damage costs, or legal fees if you accidentally damage someone else’s property or a guest hurts themselves in your residence. Any liability costs that exceed your coverage limit, damage to your personal property, and additional living expenses Any liability costs that exceed your coverage limit, damage to your personal property, additional living expenses are excluded.
Personal Property: The cost to repair ( actual cash value ) or replace ( replacement cost coverage) your personal belongings should they be damaged or stolen. Damage to personal property over your coverage limit, liability damages, additional living expenses, medical bills due to bodily injury are excluded.
Additional Living Expenses: Additional coverage that pays for hotel bills or other living expenses if your current residence is damaged or otherwise not habitable. Sometimes also known as loss of use coverage. Repair costs from damage to your rented residence (your landlord’s insurance policy may cover that), personal liability coverage or personal property damage and medical payments are excluded.
These three categories are far from the only renters insurance types: most insurance providers offer additional coverage types, often known as add-ons or riders, for specific instances not covered by a typical plan. For example, some add-ons cover instances of water damage due to sewer-backup; others cover identity theft.
Now that we’ve got the basics of renters insurance down, let’s take a look at how you can quickly and easily find cheap renters insurance or lower your current policy’s cost.
Tip #1: Always Compare Quotes
The easiest and most important way to quickly and easily lower the cost of your renters insurance is to compare quotes from a wide array of companies. Often the lowest quote will come from a company you’d never expect.
There are a few ways to compare quotes. You can call the insurance provider ’s quote lines over the phone, or visit an insurance agent in person.
The quickest and easiest way, though, is often over the web. Quote comparison sites like Insurify use cutting-edge AI technology to deliver you dozens of personalized quotes in just minutes for free.
Beware of lead-generation sites, however. Sites like these promise a fair and objective insurance comparison experience but sell your personal data to advertisers and internet scammers instead.
Tip #2: Consider Bundling
Some of the most substantial discounts available to renters come from multi-policy discounts, a practice also known as bundling. If you purchase more than one insurance policy from the same provider––renters and auto coverage is one of the most popular combinations–– insurers like Nationwide and State Farm will reward you with cheaper overall rates.
Bundling insurance policies also means less of a headache when it comes to filing a claim, since you’ll only have one insurance agent and agency to keep track of and communicate with.
Tip #3: Adjust Your Deductible
If you’re comfortable paying a higher out-of-pocket expense if you do have to file a claim, raising your deductible is one of the easiest ways to save on your monthly premium.
Don’t raise it too high, though, or you’ll be scrambling to find the cash to fork over when an accident does occur.
Tip #4: Invest in Home Safety and Security
Many companies that offer renters insurance coverage, like GEICO and Lemonade, offer discounts to policyholders who install home security or safety devices.
Security devices like burglar alarms make instances of theft or vandalism less likely to occur, and safety devices like sprinklers mean accidents like grease fires are less likely to spread out of hand. It’s a win-win!
Tip #5: Pay in Advance
If you have enough cash in the bank, paying your premiums in advance is an easy way to save.
Many renters insurance providers offer discounts to renters who pay their entire yearly premium in advance, or in quarterly rather than monthly installments.
Tip #6: Pay Digitally
Fewer mailed bills can take the pressure off the environment–– and off your credit card.
Renters insurance companies often have deals for customers who opt for paperless billing or sign off on their policy online.