Renters Insurance

If the property you’re renting was suddenly hit with a fire or flood, would you be able to sort the situation out using your own funds? For most renters, the answer is no. Fortunately, a renters insurance policy ensures you’ll never have to.

What Is Renters Insurance?

A renters insurance policy protects rental properties (and the possessions and people found within them) from all kinds of accidents and unexpected events. Sometimes, you’ll hear renters insurance referred to as tenants insurance, but it applies to other types of property beyond just apartments.

You might think that renting involves fewer unexpected costs than homeownership since your landlord is there to shoulder the burden, but you’d be surprised at the number of scenarios they won’t cover. The property owner’s insurance policy does cover some types of damage, but it’s nowhere near as extensive as a renters policy — and it certainly isn’t written in favor of the renters.

In some cases, landlords even require their renters to have a renters policy to lower their own risk level. If so, they may ask to be included on your renters policy as an interested party so they can stay in the loop about any changes.

Whether renters insurance is a requirement for the rental or not, nobody should risk the financial ruin (not to mention mental stress) of a possible catastrophe. From natural disasters to everyday accidents to theft, the list of things that could go wrong is endless.

How Does Renters Insurance Work?

Renters insurance works similarly to other types of insurance policies. If you decide to take out a policy, insurers will give you a quote based on risk factors, the level of coverage you need, and the kinds of scenarios you want covered.

When comparing renters policies, you’ll also need to pay attention to policy deductibles and possibly take out an insurance rider.

Let’s look at some of these aspects in further detail.

Risk Factors

Insurers will base the price of your renters insurance policy on how likely they believe you are to experience an accident in your rented property.

For instance, if you live in an area that’s vulnerable to flooding or with a high crime rate, it will increase the price of your insurance policy. If you’ve previously been involved in any kind of property-related accident, this could also bias the price upward.

Other factors to consider 

• Pets
• Residence type
• Building size
• Smoke detectors/overhead sprinklers
• Security system
• Credit score

As you can see, some of these factors are under your control, while others aren’t. Regardless, it’s always a smart move to compare renters quotes across providers as they all give different weights to different aspects.

Renters Insurance Coverage Level

Another consideration is the amount of renters coverage you require. The more expensive the property and the belongings in it (assuming personal property is covered), the higher the cost of your policy is likely to be. This logic also applies to the other aspects the renters policy covers.

Coverage for personal belongings generally ranges between $20,000 and $100,000, while liability typically falls between $100,000 and $500,000. However, these numbers can vary wildly between insurers.

Deductibles for Renters

As with other insurance types, a renters insurance policy comes with a policy deductible — the amount a renters policyholder has to pay themselves before the insurer chips in.

For example, if your $400 laptop gets stolen in a burglary but your policy has a deductible of $500, you wouldn’t be able to claim any money from the insurance company.

This also affects the cost of your renters policy — a higher deductible usually means a lower premium.

Insurance Riders for Renters

Unfortunately, even with a generous deductible, there’s no guarantee that all your belongings will be covered even with a generous deductible. Many renters insurance policies only cover everyday possessions and exclude certain items — especially valuables like jewelry and artwork.

If you want to make sure more expensive items like these are covered, you’ll need an insurance rider, which covers specific items and is completely separate from the deductible. Naturally, this comes at an additional cost to the renters.

What Does the Best Renters Insurance Include?

Different renters insurance policies offer vastly different coverage levels and types, so it’s important to read the small print of the policy you take out.

Common categories of Insurance for Renters

1. Property Damage: Anything that happens to the property itself.
2. Contents Insurance: Damage to the belongings and furniture within the property, including furniture and electronics.
3. Personal Liability: Legal and medical costs as a result of someone getting hurt at the property.
4. Alternative Living Expense: Costs incurred if the renters have to move to a temporary accommodation (which could happen if a natural disaster or a serious accident forces you to evacuate your home).

Usually, the following events come under the categories of property damage

• Vandalism
• Burglary
• Flooding
• Fire
• Hurricanes
• Water leakage
• Problems with plumbing, air conditioning, or heating systems
• Smoke damage
• Destruction or collapse of the property

Who Needs a Renters Insurance Policy?

If you live in rented accommodation and it’s not surrounded by a mystical force field that prevents any harm from taking place there, you need renters insurance. In order words, all renters need this type of coverage.

You might think that the risk of anything happening to the property you rent is so low that it’s not worth insuring, but nothing could be further from the truth. Just because you don’t think you’re likely to experience, say, a burglary at the place you’re renting, it doesn’t mean you’re safe from all possible scenarios.

You never know if one day you could inadvertently start a fire by leaving your hair straighteners on, or experience a freak accident.

Yes, the individual probability of one of these accidents happening might be low, but many people experience at least one complication related to their property in their lifetime.

Besides, in cases where the risk of a claim is statistically very low, the monthly premiums are likely to also be low. There’s really no reason not to take out an insurance policy.

Get a Quote Today

Is it really worth risking potential financial ruin in the future just to save yourself a few dollars today? At Insurance Navy, we firmly believe the answer to that question is no.

If you’d like to find out more about how the best types of renters insurance works in your state or how it would fit your specific case, contact us today. We have several convenient locations near you. Alternatively, you can get a free and instant online quote today to see just how affordable the best insurance coverage can be. Looking for more information about Renting? Read our blog about How much Utilities Cost in an Apartment.