Renters insurance is becoming a more-common requirement when renting an apartment or home. In the event of something unexpected, renters insurance can help protect the contents of your home or apartment. Knowing what you need to protect your own possessions and what you are responsible for as a renter are important considerations as you’re shopping for renters insurance, especially if you’ve never done it before.
Before we talk about what renters insurance covers, let’s talk about what it is. “Renters insurance” is a type of insurance for individuals who are living in a property but do not own it. While building owners and landlords have their own policies in place to protect their property, the policies they take out don’t often cover the specific needs of their tenants. Many tenants assume they are covered by their landlord’s policy when they aren’t. Because of this, tenants neglect to take out policies to protect themselves, leaving them without coverage when they need it the most.
While many assume renters insurance only covers belongings, it actually goes beyond that; it may also protects you, depending on the level of coverage you elect. For instance, if the property you’re renting is damaged, renters insurance may not only help cover your belongings, but may also cover short-term and long-term relocation costs, including meals and hotel stays. Additionally, if someone is hurt in your home or you accidentally damage another tenant’s property, your policy may shield you from liability.1
Renters insurance policies can help you replace your belongings and cover any costs like repairs, medical bills, and legal fees, but only as they apply to you. If you have a roommate, each individual renter will be covered by their own insurance policy.2
Some companies may allow a tenant to include a roommate on their policy who is not a relative or a spouse, but this is relatively uncommon and can be complicated to do. Because of the nature of these policies, it’s often recommended that tenants focus on themselves and their families and advise other tenants to consider doing the same.
Most companies offering other types of insurance have renters insurance policies. This means that while you may never have needed to take out this kind of policy before, it shouldn’t be difficult to do so now. Additionally, many companies offer “bundle” programs that allow you to take out a renters insurance policy at a reduced rate if you have another policy through their company (like auto insurance, for example).
If this is your situation, and you’re happy with your current plans, it’s worth sticking with the same company, as bundling policies may reduce your monthly bill and make the entire process easier. But if you’re new to the process or looking at options, feel free to shop around. Companies have methods for determining rates, meaning how much you pay can vary from place to place. So don’t be afraid to compare your costs; you may save yourself a lot of money later for a bit of time now.
The average cost of renters insurance is roughly $15 a month3. Renters insurance covers a broad range of conditions, and companies consider several factors to determine a price: where you live, your credit history, and your coverage limits may all factor into the final cost. As a result, the price you pay will vary. Still, even with a comprehensive plan, there are ways to reduce your rate, such as increasing your deductible or improving your credit.
For someone who owns or has owned a home, this may sound familiar, as homeowners’ policies are often influenced by a lot of the same things. The significant benefit of being a renter is that renters insurance is cheaper. Since you aren’t responsible for the coverage on the building, your monthly price will be lower, averaging only 10-15% of the cost for a similarly structured homeowners policy in roughly the same location.4
Regardless of the level of coverage you receive, almost any kind of renters policy is better than none. Protecting yourself beforehand saves you headaches later, and you can rest easy knowing you are protected when the unexpected arises.
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1 https://www.investopedia.com/articles/personal-finance/082714/6-good-reasons-get-renters-insurance
2 https://www.progressive.com/answers/does-renters-insurance-cover-roommates/
3 https://www.investopedia.com/insurance/renters-insurance/
4 https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance
5 https://www.allstate.com/resources/renters-insurance/what-does-renters-insurance-cover
6 https://www.nerdwallet.com/article/insurance/how-much-is-renters-insurance
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