Renter’s Insurance Quotes

Why do I need renters’ insurance?

Many people never consider the need for renter’s insurance, let alone comparing renter’s insurance rates to determine what policy is the right one. Just because you are renting your home or apartment, doesn’t mean you aren’t subject to the same kinds of losses and damages that homeowners face. Damage to the structure, such as a tree falling on the roof or a leak from a broken pipe, will generally be covered under your landlord’s building policy.

But those same incidents can damage your personal belongings. You may suddenly need to repair or replace items ranging from computers and musical instruments to clothing and books. Even seemingly minor incidents can leave you on the hook for surprisingly large bills: Imagine having to replace all your clothing, bedding, sofas, and chairs, etc., because of smoke infiltration from a fire in a neighbor’s unit. The cost could easily run into the thousands.

renters insurance quotes

It’s a good idea for any tenant to have insurance. In fact, many rental properties, especially those that are mid-size or larger, require tenant insurance as condition of the lease.

What does rental insurance cover?

As a tenant, you are not responsible for insuring the structure of the property – generally defined as the walls out to the exterior of the building and any fixtures included in the rental, such as the kitchen sink, stove, bathtub, etc.

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What you are responsible for covering is your personal belongings. Many tenants assume they don’t need much – or any – renters’ insurance because they think they have few expensive belongings. But if you have enough stuff to need an apartment, you have enough stuff to warrant good apartment insurance coverage.

Consider a typical single person in a studio apartment. He or she probably owns at least:

  • a cell phone and a laptop, tablet or similar device (estimated combined value to replace: minimum $1,000)
  • at least ten days worth of clothing (estimated combined value to replace: minimum $1,000)
  • basic furniture such as a sofa, bed, chair, table (estimated combined value to replace: minimum $1,500)
  • miscellaneous personal items such as books, music, collectibles, etc. estimated combined value to replace: minimum $500)

A catastrophic event such as a fire that destroyed all of those items would leave the renter needing to replace at least $4,000 worth of personal items – and that’s before even considering potentially higher ticket items such as watches, jewelry, sports equipment, musical instruments, etc. Even low-value collectibles (yes, your Star Wars figures or handbag collection count!) can create a significant additional expense if you had to replace them all at once – if you even can replace them.
For tenants who need coverage for more expensive items such as large or particularly valuable collections, original artwork, estate jewelry, electronics such as high-end cameras or multiple computers and accessories, you may need to purchase additional riders that provide extra coverage beyond what is typically provided by a standard policy.

Your landlord probably owns the major kitchen appliances such as the stove and refrigerator in your apartment, in which case damage to those items would be covered by the landlord’s policy. But the damage caused by those items to your property would need to be covered by your policy. For example, if the refrigerator breaks down and spoils hundreds of dollars of food, or if the gas stove sparks a small fire that damages your personal items, the landlord’s policy would cover replacement or repair of the appliances. Your apartment renters’ insurance would cover the cost of the lost food and other personal items.

Worse, without rental home insurance, renters’ can find themselves replacing thousands of dollars worth of items while also paying extra money for day-to-day expenses. For example, if your kitchen was destroyed, you may have to rely on take-out and restaurant meals while repairs are made. If the damage to your rental house or apartment is more extensive, you can expect to pay not only for meals but also a second short-term rental while yours is repaired. In large apartment buildings, the landlord may be able to provide you with a temporary place to stay, but generally, landlords are under no obligation to do so.

That’s why many policies written for tenants in rental properties include coverage for additional living expenses incurred because of damage to your apartment or rental home that makes it temporarily uninhabitable – think a missing roof or fire damage. Depending on your policy details, those expenses can include everything from hotel room charges to meals, laundry, and extra transportation costs.

Most home renters’ insurance policies also cover your personal property when you are traveling. So if your camera is stolen on a trip or gets damaged going through airport baggage claim, you may be able to get reimbursed for any damages not paid out by the airline or another party. (Note: Some, though not all, auto policies will cover personal items when they are damaged in a car accident or stolen from your vehicle. If you have both auto and renters’ insurance, compare policy details to make sure you don’t have excess coverage or a coverage gap.)

Renters’ insurance offers other kinds of protection

Renters’ insurance can also protect you from other types of losses, including personal liability.

Let’s say someone is injured while visiting your apartment or rental home. If the incident were caused by your landlord’s negligence or misconduct, such as failure to make a repair or meet building codes, the landlord’s policy would cover any costs and damages related to the injury.

But what happens if it’s your mistake or oversight that caused the injury? Most policies also provide coverage in their renters’ liability insurance, protecting you from having to pay for medical bills, lost income and other costs that may be incurred by the person injured – including legal fees you end up paying if they decide to sue you.

Renters’ insurance can even protect you if you none of your personal items are damaged. Let’s say a sink overflows when you’re distracted or a hose from a washing machine breaks and floods a neighboring unit. Your apartment or rental may be relatively undamaged, but the neighbor below you is looking at a soggy mess that will cost thousands to repair. Having a renters’ insurance policy in place protects you from the financial liability. It also provides some non-financial protection – it’s much easier to soothe an upset neighbor if you can say, “I have renters’ insurance that’ll cover this.”

What renters’ insurance might not cover

Most renters’ insurance policies cover things you would expect, such as fire, non-flood water damage, theft, storm damage, damage from vehicles or falling objects, and the like. But most policies do not cover damage from floods, earthquakes, war or terrorism, among other things. In some areas prone to hurricanes or wildfires, those hazards may also be excluded or may be covered only with the purchase of additional, separate coverage.

When you are comparing renters’ insurance quotes, you will need to read your policy carefully to see which hazards are specifically included — anything that isn’t mentioned isn’t covered. Exactly what is excluded can vary from carrier to carrier.

There are other special situations that renters’ insurance will not cover or there will be certain caps and exclusions in place. Home-based businesses and pet-related expenses are among them.

If you or another tenant works from home even occasionally or runs a home-based business, there are additional issues you will need to take into account when choosing a renters’ insurance policy. Not all rental policies will cover business equipment or property, such as computers or inventory. Those that do cover it may have specific caps. If the property in question belongs to your employer, you should check with them to make sure it is fully covered under their policy. For business owners, check your policy carefully for these exclusions or possible coverage gaps. You may need to purchase separate business insurance to be fully covered.

You should also be aware that a policy meant to cover your rental home or apartment may not cover any damage related to incidents resulting from your business use of that residence. To make sure you understand the limits and exclusions of the policy, talk to your agent or broker.

Pets may or may not be covered by a specific renters’ insurance policy – the coverage varies widely. For example, some policies exclude damage or injury from pets, while other policies not only cover those expenses they also include additional coverage for health-related expenses for your pets, such as routine veterinary care.

If these, or any other special situations apply to you, talk to your insurance broker or agent to make sure you get the policy that best fits your needs – and that you fully understand what is and isn’t covered by your home or apartment renters’ insurance policy.

What does rental insurance cost?

The cost of renters’ insurance can vary depending on several factors including where you live, the amount of coverage you want for your personal items, additional coverage for things like personal liability, other personal details, and of course, which insurance carrier you choose.

But even with those variations, the cost of renters’ insurance is reasonable, typically ranging from $10 to $50 a month on a policy that is renewable annually. For a cost of only a few hundred dollars per year, you can get protection that saves you tens of thousands of dollars if you ever face a large loss.

How can I get cheap renters’ insurance?

No one wants to pay more than they have to for anything, but how much you pay for renters’ insurance closely correlates to the quality of the product you get. In general, the cheapest policy will cover far less than the more expensive ones.

But there are steps you can take to lower your overall costs. You may be able to get even cheaper renters’ insurance if you have other insurance policies – such as auto or life – with the same insurance carrier. When you are comparing rental insurance quotes, check if multi-policy discounts (also sometimes called “multiline”) are offered by the carriers and then compare those quotes as well to ensure you are getting the best insurance rates available. Bundling multiple insurance policies with the same carrier can often save you as much as 10% on your total insurance premium.

Most insurers also offer discounts for certain safety-related items you have, such as security systems and smoke and fire alarms. Ask your agent or broker about any discounts of this nature and make sure they know about all relevant safety features in your building. Examples include, a door attendant or a lobby that can only be accessed by key holders, as well as security measures you have in your individual rental apartment or home, such as an alarm system, barred windows, gated doors, etc.

You may also qualify for additional discounts for paying your yearly premium up front instead of in monthly installments and/or using electronic transfers to pay your premium instead of check or credit card. Some insurance carriers do a better job of promoting these features than others, so be sure to ask about them when comparing quotes.

Another way you can lower the cost of your renters’ insurance is by selecting a higher deductible. The deductible is the amount you have to pay yourself before your insurance coverage kicks in.  For example, if your policy has a $1,000 deductible and you lose $5,000 worth of personal items, your insurer would pay out $4,000. If you selected a policy with a $5,000 deductible, you would get nothing.

So why choose a high-deductible policy? The simple answer is it lowers your overall insurance premium. High-deductible policies can slash the cost of renters’ insurance. Low- and high-deductibles can be good or bad depending on your circumstances and your comfort with risk. In general, high-deductible policies work well for people who have enough savings to cover an unexpected expense from a loss and are comfortable taking on slightly more risk. Low deductible policies are a good choice for people with little savings who would have trouble covering a large, up-front expense. If you fall somewhere in between or aren’t sure what to do, the mid-level deductible works for most people.

Another factor that can affect the cost of your renters’ insurance is whether you choose a policy that provides actual cash value or total replacement cost coverage.

Actual cash value means you get the literal value of your property at the time it was damaged or destroyed. So, let’s say you have a five-year-old television that originally cost $500. After five years of use, and with newer models having since come out, your TV may be worth only $100 or $200. With an actual cash value policy, that’s what your insurer would pay out if the TV is destroyed.

With a total replacement cost policy, if that same, five-year-old TV is damaged, your insurer would pay out whatever it costs to replace it with a new, similar model. (Note: The key word here is similar – if your 28” basic flat-screen is damaged, the insurer won’t pay for you to replace it with a 56” smart TV that has every bell and whistle. The insurance payout will cover the cost of another basic, small television. You can upgrade if you want, but you’ll pay the difference out of pocket.)

You’ll spend a little more for total replacement cost policies because they pay out more if you have a covered loss. They’re a good choice for anyone who has items, such as electronics, that depreciate quickly. Actual cash value policies are a way to reduce the cost of renters’ insurance premiums, but be aware that you will have less protection in the event of a loss.

Other items or activities can increase your renters’ insurance costs. These vary widely depending on which insurance carrier you use and whether you are covering a rental home or apartment, but they can include:

  • so-called “attractive nuisances” such as pools or tree houses
  • your credit rating (in some states)
  • a history of frequent and/or multiple prior insurance claims (even if it was a different kind of policy, such as auto)
  • the crime and safety rating of your neighborhood, and owning pets, especially certain breeds of dog.

If the renters’ insurance quotes you receive seem unusually high, you can ask your broker or agent if any of these factors are a reason.

What is the best renters’ insurance policy for me?

There is no one “best” renters’ insurance policy. To get the policy that works for you, your best course of action is first to decide what coverage you do (or don’t) need and then find the policy that most closely matches that list. Factors to consider include:

  • What kinds of personal property you have and how much it is worth
  • What kinds of hazards are most likely in your area
  • What, if any, lifestyle factors may affect the coverage you need (for example, if you have kids and a dog, you have two factors that make it more likely your apartment or personal property could be damaged and/or cause injury to another person)
  • If you’re willing to take a high deductible and pay for some damages out of pocket
  • What, if any, coverage you have from other policies you hold or that your landlord holds.

Renters’ insurance policies often come with dollar limits for coverage of specific items such as cash, jewelry, and firearms. If you need coverage beyond that, it can usually be purchased with an additional rider. For example, if a policy states that it will only cover damages up to $2,000 for jewelry and you have only one or two relatively inexpensive rings worth $250 each, the standard policy is sufficient. But let’s say you also have an heirloom necklace worth $5,000. You would need to purchase a jewelry rider for your policy that would provide sufficient coverage for the more expensive item. Riders are tacked on to the cost of your premium, and add only a few dollars per month to your total bill, depending on how much additional coverage you need.

Trying to figure out how much coverage you need may seem like an impossible task, but you can do it in the course of an afternoon. First, figure out what is covered by your landlord’s policy – and what isn’t. Your landlord should be able to confirm in detail what they do and don’t cover, but fixtures they are generally responsible for include large appliances like the stove and built-in items like the shower, cabinets, and sinks. For the most part, anything you don’t bring into the apartment is likely covered by the landlord’s policy.

Once you know what you don’t have to worry about covering, you need to document and get a valuation for what you do have to protect. Start with a room-by-room inventory. Here’s how you do it:

Walk through each room of your apartment or rental home and take stock of your personal property. Document (using a notepad, a video camera or any other method you like) what you own and roughly what it costs. You don’t have to list every item, but make sure you include an estimated cost for every item or group of items you own that you would expect to have to replace through your renters’ insurance.

For example, you may not think of your bathroom as having much in it. The largest items (shower, sink, etc.) are covered under your landlord’s policy. But look more closely: one or two sets of towels can easily cost $50, all your basic toiletries such as shampoo and toothpaste probably cost about $50 – much more if you like high-end brands. You’re already at $100. Now look more closely – do you have an electric toothbrush or razor? A professional-style hair dryer? What about spare eyeglasses or contacts? Prescription medications? It all starts to add up.

As you inventory each room take photos of each item. (A digital camera or video is invaluable here.) Again, you don’t need a separate photo of each pair of socks or tube of toothpaste you own. But a shot or two of your closets, furniture, etc., can help you prove your claim later, especially if your apartment or rental home is damaged severely and the items cannot be found. Any items that are particularly pricey or unique (electronics, original artwork, jewelry, etc.) should have at least one close-up photo so that in the event of damage the insurance adjuster has enough information to establish the item’s value. Keep copies of these photos somewhere away from your apartment or rental home where you can easily access them even if you can’t get home. Some cloud-based applications can do this for free.

Once you’ve documented the estimated value of your personal property in each room, add it up – the total is the approximate amount of coverage you’ll need. So, if you have a three-room apartment with roughly $5,000 worth or property in each room, you’ll want a policy that provides $15,000 in coverage.

Treat that number as the first item on your insurance “shopping list.” You’ll also want to note any special coverage you might need – riders for jewelry and electronics, a policy that includes pets, etc., as well as discounts for which you may be eligible. With this list in hand, it’s time to start shopping around for your policy.

How do I compare renters’ insurance quotes?

Once you have an idea of what kinds and amounts of coverage you need, you can start the process of getting renteral insurance quotes.

Make sure you shop around and check with a number of carriers. While all insurance carriers have access to the same data for underwriting, they all use slightly different criteria for how they assess an individual’s risk – and the lower your perceived risk of making a claim, the lower your renters’ insurance premiums will be.  When comparing renter’s insurance policies, it is not uncommon for the same person to get widely divergent rental insurance quotes from two different carriers, so it makes sense to shop around.

You should also check to see which carriers offer discounts that may apply to you. In addition to the multi-policy discounts discussed above, some carriers offer discounts for a variety of factors including military service, being a senior citizen, having not made an insurance claim for a defined period, and more. Each carrier can provide more detail on which options they offer and who qualifies for them.

Major renters’ insurance carriers

Renters’ insurance policies are available from many companies, but the following five carriers are among the best known and offer many extra features that make them worth checking out. They each were rated highly by J.D. Power for their renters’ insurance offerings.

  1. The Hartford – received top marks for overall satisfaction, policy offerings, customer service and billing, but it does cost a bit more than some other carriers.
  2. American Family – notable for its clear, accurate billing process and high customer satisfaction, but not as competitive in pricing overall and with some limits on policy options.
  3. Erie – ranked highly overall, with top marks for competitive pricing and customer satisfaction.
  4. State Farm – this giant in the industry received overall excellent marks in every category but wasn’t the top in any category.
  5. Allstate – one of the biggest players in rental insurance, they scored well in every category, and also have tools such as the Digital Locker to help you store the photos from your personal property inventory.

    Glossary

Actual cash value  – a policy that covers only the value of a damaged or destroyed item at the time of the event.

Adjuster – a professional who examines the damage to the apartment, rental home or personal property to establish the financial loss from a covered event

Carrier – the company underwriting your insurance policy

Coverage caps – a limit on the amount of insurance benefit provided for certain items or expenses. For example, a policy may provide coverage for living expenses up to $10,000. In this case, the coverage cap is $10,000.

Covered event – incidents including theft, fire, and water damage that are included in the coverage of a specific insurance policy

Deductible – the amount of a covered claim that must be paid by the insured person

Excess personal property coverage – additional coverage beyond what a standard insurance policy covers, provided at additional cost

Exclusions – items or types of damage not covered by an insurance policy

Insurance agent or broker – the individual or agency from whom you buy your policy. They may be independent and sell policies from many different companies, or they may work solely with one insurer.

Renters’ insurance – an insurance policy that covers a tenant’s personal items as well as some other related expenses

Renters’ liability coverage – insurance for costs or damages a third-party incurs caused by the insured person’s actions or negligence

Replacement cost – a policy that covers that cost of replacing a damaged or destroyed item with a similar new item

Riders – additional coverage for specific benefits over and above what the standard policy offers, purchased at additional cost

Sources:

http://www.jdpower.com/ratings/study/U.S.-Home-Insurance-Study—Renters’-Insurance/1502ENG
http://www.insure.com/home-insurance/renters’.html
https://www.azinsuranceteam.com/why-do-i-need-renters’-insurance-.html
http://money.usnews.com/money/personal-finance/articles/2013/09/12/4-common-myths-about-renters’-insurance
http://lifehacker.com/how-to-choose-the-best-renters’-insurance-1516007207
https://www.nerdwallet.com/blog/insurance/find-best-renters’-insurance/