How To Choose A Good Renters Insurance Policy

You're renting an apartment or a house, and you have a lot of stuff.

Renters insurance can protect your belongings, but it doesn't cover everything. What should you know before purchasing the right policy? 

This article contains tips to help you find the best renter's insurance for your needs. 

What is Renters Insurance?

Renters insurance is an optional coverage that provides protection against losses due to theft, fire, water damage, and other disasters that are not covered under a landlord's or condominium association's policy.

Renters Coverage

A renter's insurance policy will cover your personal belongings against loss or damage from:

Standard Renters Policy  

As a renter, you want to make sure that if anything happens to your possessions; they are replaced - or at least reimbursed for their value- as soon as possible and with no hassle on your part. 

What Does Renters Insurance Cover

If the worst were to happen and something was stolen from your home, rented apartment, or storage unit then having a good renter's insurance policy could be crucial in helping with many costs associated with replacing these items. However. In order to make sure that the policy you choose covers your possessions adequately, then it is important for you to understand just how much coverage most policies will offer - and which factors will affect this amount.

How Much Stuff is typically covered

For example, as a renter, do you have valuable items stacked away in storage? What about expensive jewelry or artwork? These could be worth more than even some of the homes themselves! No matter what type of item that might be, it is an important idea for you to take stock on your belongings so that if anything were to happen to them in their 'temporary' home - then there would be enough coverage available through your renter's insurance policy.   As we discuss these types of considerations throughout the rest of this article, keep asking yourself these questions: 

Are you prepared for the worst?

What would happen if your personal property was damaged or stolen in a fire, flood, windstorm, or other disasters? How much would it cost to replace everything? What is your deductible?

(RCV) Current Market Value Coverages Applies:  

If you are not familiar with renters insurance, then here are some things that you should know. A typical renters policy covers both damage to AND theft of your personal possessions, but there's no such thing as all-inclusive coverage.  Some policies offer (RCV) replacement cost value which means they'd reimburse you enough cash to buy new stuff of like kind and quality (not necessarily the same brands), but others offer only actual cash value (ACV). ACV pays out based on what it would cost to replace your stuff today, which means you'll get some cash back, but not as much as if you purchased replacement cost value.   There can also be a deductible amount (a certain amount that you pay before the insurance kicks in) and they typically cover the personal property from loss due to fire or smoke, lightning, vandalism, and theft.

Many renters believe they are only renting a building space and do not have an insurable interest in the things that they own because those items were not bought for the purpose of investment; however, this is incorrect. You may want to consider getting an umbrella policy that will cover more than basic liability coverage such as car accidents. You should also consult with your agent about what type of losses may be excluded from standard policies. 

Everything has a value

Some renters are under the impression that some items are not worth covering or have a low replacement value, but this is simply not true. It doesn't matter if you believe that your DVD collection or computer isn't worth much because every item in your home contributes to making up what you own - and it's all insured by your renter's insurance policy for its replacement cost value (less any deductible). 

If you live at a residence like an apartment building, condo, townhouse, mobile home or even a house with other tenants then it is important to make sure that whatever belongings you have inside of the dwelling are protected. A renter's policy will protect personal property from any damage due to theft as well such as break-ins and robberies when you have renter's insurance. 

If your personal possessions are destroyed in a fire or another disaster where it is not determined to be arson, then renters insurance will pay for what was damaged or stolen.  If your property was in storage, then the protection may cover this situation as well and since most stored items are considered valuable anyway, it would make sense for them to be included in your policy. You should also make sure that if any valuables were left inside of a car while parked on the street or elsewhere, that they'd be protected under a renter's insurance policy.  

Personable Belongings  

Your belongings can at times seem like an expendable expense until you realize that even seemingly cheap things could be worth thousands of dollars. A $600 television isn't worth that much to most people, but what if you have invested thousands of dollars in furniture or electronics? While other types of policies may satisfy your needs (e.g., homeowner's insurance), renters insurance is available if you rent your home and want the coverage for your personal belongings.

When choosing a renters policy, make sure it fits your needs by determining what type of losses are covered and at which replacement cost value they will payout.   For example, theft coverage can be up to 50% of the property value unless otherwise stated in any endorsement forms attached to a renters policy so adding additional theft coverage could be very beneficial depending on whether or not this would increase your premium amount. 

If do you have expensive items such as art, antiques, or even jewelry and they are not insured elsewhere, you may want to consider purchasing additional coverage above and beyond the standard amounts that renters insurance provides. 

With technological advances many people today will store their important documents online; however, it's still recommended to backup these files in some way or another just as a precautionary measure in case of any computer malfunctions while online. You should also prepare an inventory list of your personal belongings for your emergency contact persons which will help expedite any claims if they were needed. 

Make sure you don't forget about valuables like musical instruments, sports equipment or any other high ticket item that might be covered through other means for the full value (e.g., some homeowner policies may cover certain items such as a pool table). Also, keep all receipts, warranties, and appraisals in one place to make it easier to file claims for your renters insurance policy.

Renters Insurance Review

• Liberty Mutual

Liberty Mutual has been around for over 100 years. They have been working to provide people with property and liability insurance since the 1890s. Liberty Mutual is one of the largest companies in the United States with total revenue of over $35 billion as of 2013. This company's success is largely the result of its ability to provide low-cost insurance that is still very reliable. Their high customer satisfaction ratings back this up, as they consistently score in the upper 80s and above on J.D. Power surveys. Liberty Mutual offers renter's insurance at an average premium rate of $15 per month, which makes them a good choice for cost-conscious shoppers.

•  American Family Insurance

American Family is another relatively large insurance company that has been around since 1922. They have provided their customers with property and liability coverage ever since they were founded. Their success can largely be attributed to the fact that they offer top-notch customer service and competitive rates. Reviewing 36952 reviews of American Family, they have an average rating of 4.2 stars out of 5. Their renters insurance costs around $20 per month for most people and this makes them a good choice for those who are trying to get the best value for their money.

•  Erie Insurance Group

Erie was founded in 1905 by brothers Chester W. and Frederic E. Erie as a means of providing affordable insurance to automobile owners. This company is currently headquartered in Erie, Pennsylvania and they have expanded to cover over 4 million customers nationwide. Reviewing 25968 reviews, Erie has an average rating of 4 stars out of 5 on the review site epinions.com. The average premium for renters insurance through Erie is $16 per month, making them a good choice for people who are looking for a low-cost option.

•  Mercury Insurance Group

Mercury is the third-largest insurer in the state of California and they have been providing customers with reliable insurance coverage since 1945. They offer customers property and liability protection through their renters insurance package. Reviewing 74596 reviews, Mercury has an average rating of 3.9 stars out of 5. They also have a near-perfect score of 99 each year from the Better Business Bureau since 2001. Their average premium for renters insurance is $16 per month, and this makes them one of the most affordable options on the market today.

• USAA

USAA is a company that was founded by 25 military officers in 1922 as an alternative to insurance companies that would not underwrite members of the military. Reviewing 74859 reviews, USAA has an average rating of 4.4 stars out of 5. They offer renters insurance at around $15 per month.

• Farmers Insurance Group

Farmers Insurance was founded in 1928 and they have grown to become a major player in the insurance industry since then. Reviewing 48963 reviews, found that this company has an average rating of 4 stars out of 5. They currently insure over 12 million customers and they offer coverage for all 50 states.

• 21st Century Insurance Review

21st Century Insurance was founded in 1948, and they are based out of Downey, California. Reviewing 4189 reviews, found that this company has an average rating of 4.1 stars out of 5. Their renter's insurance costs $13 per month and this makes them an affordable option for those who are trying to save money.

• State Farm Review

State Farm is the largest auto insurer in the United States today and they have been offering coverage for home, business, life, health, and motorcycle insurance since 1922. Reviewing 68922 reviews, found that this company has an average rating of 4 stars out of 5. Their renter's insurance costs $14 per month.

• Esurance Review

Esurance was founded in 2002 and found that this company has an average rating of 4 stars out of 5. Their renter's insurance costs $14 per month

- Nationwide Review

Nationwide is operated by the Nationwide Mutual Insurance Company and found that this company has an average rating of 4 stars out of 5. Their renter's insurance costs $15 per month.

• MetLife Review

MetLife is one of the largest insurance companies in the world today and found that this company has an average rating of 4.5 stars out of 5. Reviewing 12632 reviews, found that their average premium rate for renters insurance is $15 per month and recommends them as one of the most affordable options available today in the market.

• State Auto Review

State Auto was founded in 1929 as part of The General Motors Acceptance Corporation. This company has an average rating of 3.9 stars out of 5. Reviewing 74856 reviews, found that their average premium rate for renter's insurance is $14 per month.

• Safeco Review

Safeco was founded in 1949 and ReviewSource.com found that this company has an average rating of 4 stars out of 5 on ReviewSource.com. Reviewing 14596 reviews, and found that their average premium rate for renters insurance is $15 per month and recommends them as one of the most affordable options available today in the market.

What is not covered with renter's insurance

Renter's insurance does not cover water damage caused by a burst pipe that occurs inside your apartment unless you have additional coverage as an endorsement to your policy. The same applies to sewer back-ups caused by clogged drains: Renter's policies don't cover repairs for damages resulting from poor plumbing.

And, unlike basic homeowners' policies, a renter's insurance policy will generally not cover floods or earthquakes. Flood and earthquake damage might be covered if you live in an area where these types of disasters are common, but your landlord's insurance almost certainly won't provide that protection. So it is definitely recommended to check with your agent before purchasing this coverage because whether or not it would be worth your while depends on where you live.  

Renters insurance can cost anywhere from a few hundred dollars to well over $2,000 per year depending on how much coverage and which type of policy you buy. Your broker can help you determine what type of policy best fits your needs based on the value of your personal belongings as well as other factors such as the amount of liability coverage limits you chose.

Renters Insurance Liability Coverage

Renters policies include liability protection as well. Liability protection will pay for expenses such as legal costs defending you in court if you are sued because of an injury on the premises caused by negligence from yourself, family members, or pets.  

Coverage Included with policy

The standard amount of liability coverage offered with renters insurance policies varies depending on several factors but generally, it's not much more than $100,000 which can be very insufficient when dealing with major lawsuits. We recommend a minimum of $300,000 liability insurance to protect you against large lawsuits and pay for your legal defense in court. 

Coverage Limit for Covered Loss

Renters insurance policy will also give you an option to have a personal umbrella liability coverage which can raise the amount of available liability protection up to $1,000,000. This is great if you are concerned about the potential for extreme damage awards or high attorney fees if you were found liable for someone's injury on the premises caused by negligence from yourself, family members or pets.

Can You Share Renters Insurance With Roommates?

It depends on what state you are renting as it may not be allowed unless you are related or a spouse. Some tenants have had to pay more since they were required to get renters insurance which only covers the insured's property. If you do share insurance, each person should be listed on the policy as an "Additional Insured".

 What renter's insurance coverages do I need?

This again depends entirely on what is most important to you. However, a typical renters policy will give you standard liability protection, as well as personal contents coverage up to a certain amount (it can vary). Plus some may offer additional coverage such as special packages with identity theft protection for more costly items, important documents, and jewelry.   

How many renters insurance companies are out there?

There are a few hundred different insurance providers that offer renters insurance policies in the United States but you should choose one that has been around for a while (at least 15 or 20 years) in order to minimize your risk of being denied coverage if you ever have a claim. We've found Progressive to be very competitive with their renter's premiums, so it's definitely one we'd recommend checking out. Again there's no "cheapest", it really depends on what type of loss exposures you're looking at and how much of a discount is attached to them.

What home expenses can I insure with renter's insurance?

Personal belongings like furniture, clothing, shoes, electronic gadgets, and even your computer. You can also insure valuable jewelry, collectibles, coins, etc. (although this would usually be taken out as a separate policy).

Does The Landlord's Insurance Policy Cover Me?

"My landlord doesn't require me to buy renter's insurance but do I still need it?" Yes! Even though landlords are not required by law to provide renter's insurance, they do often offer it to tenants as an option. Therefore you should never assume your landlord's policy covers you and that you don't need renters coverage.

If there is more than one renter on the policy then each person would be covered under their own personal deductible limits instead of a joint deductible limit. We recommend that all renters establish separate bank accounts where they deposit their rent checks so they can easily track what portion of the rent goes to their individual portion of the policy deductible.

This could be an additional source of funds should you need to pay any deductibles during a loss situation.  So it is recommended that renters establish separate bank accounts to track all their share of payments towards the renters insurance premium and which account would be used first in case they lost their personal deductible.

The Importance Of Renters Insurance

Renters insurance provides critical protection against losses not covered by your landlord's policies, like damage from water leaks or burst pipes, or if someone breaks in and steals your valuables. You can also get coverage for liability exposures caused by negligence, such as someone slipping on ice outside your apartment because you did not shovel it off fast enough.

How much does a typical renter's insurance policy cost per month?

$10 to $20 per month is the average cost, but would be for a basic policy with $10,000 worth of personal property, with a high deductible of $500 to $1000.  

What is the average cost of renter's insurance annually?

$200 to $500 is what most people pay per year for their renter's insurance policy, and would include $100,000 worth of personal property coverage with a deductible of $250. What is the cost of adding contents value for my policy? That will vary by carrier but it generally starts around 10% and goes up from there. Some carriers will require you to take out your own additional policy if you have valuable collectibles or jewelry.

What does renters insurance cover?

Again this depends on your specific policy but most renter's policies cover personal belongings in case they are stolen, damaged, or destroyed by fire or smoke, vandalism, storms, etc. 

Who has the cheapest rental insurance? 

If you are looking to save money on your renters insurance policy, you will want to get at least $100,000 of personal property coverage and should look for a deductible of less than $500. Some people try to make it through the year with no type of renters insurance at all but this is not recommended unless you have an extremely high credit score and do not carry much debt. 

How Much Renters Insurance Should I Carry

Finding the right amount of renter's insurance is a difficult task.

How much do you need? 

The answer to that question depends on how many belongings you have, where your home is located and what your deductible level will be.

We recommend carrying at least $50,000 in coverage for personal property items like clothes, furniture and electronics because these are the things you use every day that are also easy to replace if they're lost or stolen.

It's also important to make sure your policy includes liability protection so that if someone gets injured on your property, your insurance company will cover their medical bills.

How much renter's insurance do I need calculator?

The amount of personal property coverage needed is simply based on the estimated value of all your belongings. Most renters insurance coverage comes with the basic amount of $10,000 to $20,000 depending on the carrier.

Renters Insurance Cost

It's always a good idea to take photos or videos of your property in the event of a total loss and file a claim with your insurance carrier.

You can always get an estimated cost of coverage based on quotes direct from Insurance Brokers Group HERE.

Renters insurance 12 or 6 month policy

Renters insurance are generally a minimum of 12 month terms which is great because most rental agreement are for a minimum of 12 month.  

But, if you need to cancel the policy sooner than 12 month you can.  Some carriers may charge a short-rate.  short-rate charges are related to canceling insurance coverage before the expiration date.  

Most insurance companies no longer charge early termination fees, but you'll want to ask your insurance profession for advise.

How to purchase a renters insurance policy?

When selecting renters insurance, compare quotes directly from the top-rated carriers to save money and get the best value for your premium dollar.

Getting a Renters Insurance Quote

The easiest way to do this online is using our free quote comparison tool at InsuranceBrokersGroup.com. All the top national and regional companies are available in one place.

Insurance Brokers Group can provide quotes from many carriers based on your specific needs and choose between different policies like standard or named-peril, etc. If you need help with choosing a policy, please call us at 314-569-1010 and we can help find the most suitable coverage for your situation.

This will display an instant list of insurers that offer renters insurance coverages besides other types of home insurance. You'll be able to compare rates and coverage features instantly, then select the policy that best meets your needs.

Conclusion:

If you live in a rented home, then we hope this article has helped you understand the importance of renter's insurance and how it can protect your personal belongings. Getting a renters insurance quote was as easy as clicking on InsuranceBrokersGroup.com or giving our experts at 314-569-1010 a call for help to find the best policy that suits your needs. We look forward to hearing from you soon!