Affordable Renters Insurance Rates

Guide to Renters Insurance

Live in an apartment or rental home? You could be exposing yourself to the financial liability of replacing your belongings if you suffer a break-in, fire damage, or another disaster if you don’t carry proper renters’ insurance. Your landlord may already have insurance to protect the building you’re living in, but the policy won’t cover your personal possessions or any living expenses while the building is being repaired.

Luckily, it’s never been easier to protect your home with affordable renters insurance policy. And if you imagine you don’t already own enough stuff to justify insurance, think again. Electronics, furniture, clothing, bags, shoes,and art all add up. Replacing all that can be expensive, but insurance can protect your finances well. Should someone accidentally hurt themselves at your home, insurance offers a cushion while covering medical payments.

Renters insurance is essential, so let’s take a high-level look.

What is Renters Insurance?

Renters insurance protects your personal property if you live in a rental apartment, condo, or home from unforeseen circumstances like fire, theft, or water damage. This insurance will pay you for damaged or lost possessions, including the cost of repairing or replacing your possessions. Renters insurance may also protect you from liability if someone is injured on your property.

Renters insurance is almost similar in scope to homeowners insurance, except it doesn’t provide coverage for the dwelling itself or actual structure.

When you experience a covered loss in your rental, renters insurance will help pay for the associated costs. The amount covered typically depends on the type of loss that occurred and the amount of coverage you carry. A typical renters policy has two coverage options:

  • Actual cash value. Actual cash value coverage compensates you for your items’ actual value at the time of loss or damage. With this coverage, your insurer pays to replace your possessions less an amount for depreciation (the reduction in value because of use and age) up to the policy limit.
  • Replacement cost. Replacement cost coverage pays the cost of replacing the items damaged or lost. In this case, there’s no deduction for depreciation. Replacement cost coverage may be about 10 percent more than actual cash value, but it’s worth the extra penny.

What Does Renters Insurance Cover?

  • Personal possessions. A renters insurance policy may provide coverage for the destruction or loss of your personal belongings due to a covered peril. Such perils may include fire, windstorm, lightning, hail, vandalism, theft, and more. Policies are typically written on a named-peril basis, so the scope of protection may vary among insurance providers. You may purchase additional coverage for your jewelry or other expensive items — which you may add during the quote process.
  • Liability claims. If you’re held liable for the accident or injury of another person in your rental property, liability coverage will pay for costs up to the policy limit. Your renters insurance may also cover the legal fees that you could eventually incur. You may also purchase an umbrella or excess liability policy to enjoy higher coverage limits and a broader scope.
  • Medical payments. Medical payments coverage goes hand in hand with personal liability — it covers the medical expenses resulting from an accident that occurred on your property.
  • Additional living expenses. If you’re forced to move out of your rental temporarily due to damage caused by a fire or flood, a renters insurance policy may pay for your alternative living arrangements while your house is being rebuilt or repaired. Policies will typically reimburse you the difference between your extra living expenses and your normal expenses, including restaurant meals, temporary rentals, and hotel bills. You may get up to 24 months in coverage.
  • Items inside your car. Depending on your renters insurance policy, you may be protected for belongings that you carry inside your car. Your renters policy may also include off-premise coverage for belongings that are outside your home. Remember, coverage doesn’t include systems or equipment installed in your car.  

What Renters Insurance Doesn’t Cover

Here are some common renters insurance exclusions:

  • Natural disasters. Most renters insurance policies won’t cover your belongings if they’re damaged under certain events. Generally, natural disasters like flooding and earthquakes are excluded — but you may purchase a specialized policy to cover these events.
  • Some valuables. Your standard renters policy may not cover some expensive collectibles and valuables. Insurance providers may place special limits on valuables, say up to $2,500 for electronics and $1,500 for jewelry.
  • Undocumented items. If you can’t prove ownership or value of some items, renters insurance may not come through for you. Insurance providers often require this information when you file a covered claim.
  • Your roommate’s items. Your insured-self won’t come to the rescue if your roommate’s items are lost, damaged, or stolen — except if its through marriage, adoption, or a relative. They’ll need to obtain their own coverage to protect their items.
  • Damage from pests. Pests, rodents, and bugs are irritating, but your renters insurance won’t put you in the clear of any damage caused by these creatures. What’s even more pesky is that pest extermination costs aren’t covered. These creepers are a liability, so you should invest in preventive measures to avert an infestation.
  • Property damage. Renters insurance doesn’t cover the physical building that houses your stuff — that’s up to your landlord’s insurance.
  • Home business. Renters insurance won’t cover any items you use for your home-based business. Check with your provider to understand what’s covered or whether you need a separate policy.

How Much Does Renters Insurance Cost?

You can expect to pay anything between $12 – $30 per month for renters insurance. However, your renters insurance cost will be unique to you depending on factors like:

  • Geographical location. Location is a huge factor in your renters insurance costs. The location of your apartment can help insurance companies predict what may happen in the future. Insurance rates will soar for rental properties located in areas with higher crime rates and frequent natural disaster occurrences.
  • Amount of coverage. Renters insurance costs will fluctuate depending on what portion and how much of your possessions you want covered. For instance, you can expect to pay higher premiums for insuring property worth $30,000 compared to covering only $8,000 worth of personal property. Creating an inventory of your assets can help you choose what to include in your rental insurance coverage.

You’ll also need to document each item’s value, including serial numbers, descriptions, receipts, date of purchase, and how much each item cost. Don’t forget to include any warranties you may have for the items. This will help you prove ownership in the event that you need to make an insurance claim.

  • Insurance or credit score. Some insurers will use insurance and credit scores to determine your renters insurance premium. Your insurance score is derived from details on your credit report, and insurance carriers use the information to identify a correlation between your credit history and insurance risk. You can expect lower premiums if you have a higher credit score.
  • Pets. You could suffer a lawsuit if your dog bites a visitor in your home, so insurance companies may raise your insurance premiums if you own an aggressive dog breed — or disqualify you from getting coverage.

When determining your insurance premiums, insurance carriers will also offer the opportunity to cut down costs. You can shave some costs off your renters insurance policy by:

  • Bundling policies. Your insurer may give you some reprieve if you combine renters and auto insurance.
  • Choosing a higher deductible. Raising your deductible will get your monthly premium to decrease since you’re committing to a higher out-of-pocket expense in the event that you file a claim.
  • Installing an alarm or security system. You could be in for a better rate on your insurance premium if your home or apartment is equipped with a security system.
  • Full pay, auto pay and paperless billing. Insurance companies will reward you with impressive discounts if you streamline your payments habits by paying in full upfront, enabling automatic renewal, or going paperless.  

The discount rates may vary largely by insurance provider, so be sure to review your options — and as always, shopping around is the first step toward getting the best deals.

Frequently Asked Questions

Can you get renters insurance when renting a room?

If you’re renting a room or living in a shared apartment, your roommate could add you to their renters insurance policy so that you’re also covered — otherwise you won’t be covered. We recommend purchasing your own insurance policy instead.

Does renters insurance cover cell phones?

Your renters insurance may help cover the cost of replacing or repairing a cell phone that’s stolen or damaged by a covered peril. However, the amount of coverage will depend on the limits stated in the policy fine print. Remember, you must pay your deductible before your insurer reimburses you for a covered loss.

How does homeowners insurance vs renters insurance differ?

Homeowners insurance and renters insurance both offer a financial cushion against property damage, liability costs, and medical payments. At first glance, homeowners and renters insurance differ because the former is for those who own their homes and the latter is for those who rent. But that isn’t it all.

Homeowners insurance extends coverage to both the structure of the home and your personal belongings. This is different from renters insurance, which is purchased by tenants to cover only the loss or destruction of their belongings.