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What is renters insurance and why should I consider it?
Renters insurance, also referred to as an HO-4 policy, is a type of property insurance policy designed to cover your personal belongings, liability exposure and additional living expenses if you rent your home or apartment. You may be able to add optional coverages as needed to customize your policy to your needs.
In 2018, the most recent year with available data, a renters insurance policy cost just $179 per year, on average, according to the Insurance Information Institute (Triple-I). Renters insurance is not required by your state, but your landlord may require you to have a policy. Even if renters insurance is not a requirement for you, you may find that a policy can be beneficial. Renters insurance coverage can protect you from financial stress or devastation if a covered loss occurs.
What does renters insurance cover?
Renters insurance can cover numerous situations, depending on the endorsements that you add to your policy. However, the main coverages on a renters insurance policy are:
- Personal property coverage: This coverage is designed to pay for your damaged or destroyed belongings after a covered loss. Covered personal property generally includes your furniture, clothing, household items and some electronics.
- Liability coverage: Your liability coverage may pay for medical bills and your legal fees if you are found at fault for someone’s injuries or damage to someone’s property.
- Additional living expenses: If you are unable to live in your rented home or apartment after a loss, this coverage could help pay for the cost of a hotel and other expenses, like laundromat services or pet boarding. Living expenses coverage only covers the necessities. You should ask your insurance agent to see what exactly is covered when you purchase your policy.
You may also have the option to add additional coverages, like identity theft coverage, pet liability coverage and scheduled personal property coverage to your policy. If you are not sure what coverages you should consider, talking to a licensed agent could help.
Most renters policies also exclude damage to your personal items caused by earthquakes and flooding. While earthquake coverage can often be purchased as an endorsement, you may need to buy a separate policy if you live in a high-risk area. Flood insurance is most commonly offered as a separate policy, although a few companies offer endorsements or include this as a coverage option.
How much does renters insurance cost?
Renters insurance costs, on average, about $179 per year, per Triple-I. However, the cost of your renters insurance policy will vary based on several factors, including how much personal property coverage you purchase, the level of liability coverage you select, what additional coverages you choose and your claim history.
What states offer renters insurance?
Renters insurance is available in all 50 states and Washington, D.C. However, states that have a high density of renters, such as California, New York and New Jersey, may have more active renters insurance markets with more companies and endorsements to choose from.
Renters insurance is not just for those who rent apartments. Renters in condos and homes also have the option to purchase renters insurance. In warmer states like Florida and Georgia, homeowners may choose to rent their homes out for part of the year if they live elsewhere. The renters who occupy those homes can also purchase renters insurance policies to cover their belongings and liability exposure.
What companies offer renters insurance?
There are numerous renters insurance companies in the market, but your options will depend on what state you live in. Not all companies are available nationwide, and not all companies offer renters insurance in each state where they operate. If you are looking for the best renters insurance company, you may want to get quotes from these providers:
- Geico: Renters who want to handle their policies digitally may want to consider Geico. The company has one of the most highly-rated apps in the industry.
- Progressive: If you are looking for a highly customizable policy, Progressive could be a good choice. The company offers a long list of optional coverages, including water backup and personal injury.
- State Farm: Renters looking for an in-person agency experience might want to get a quote from State Farm. The company has over 19,000 agencies across the country.
How do I save on renters insurance?
Although renters insurance is generally much less expensive than homeowners or condo insurance, there are still ways to reduce your premium.
- Bundle your policies: If you also have an auto insurance policy, consider bundling your renters insurance with the same insurer — you might earn a discount on both policies.
- Install protection devices: If you have smoke alarms, a carbon monoxide detector or a home invasion alert system, you might save money on your policy.
- Consider how you pay: If you can pay your annual premium in full, you might save money. If you do need to pay in installments, many companies offer discounts if you sign up for an automatic withdrawal.
- Increase your deductible: Your deductible is the amount you will pay out of pocket if you file a claim. Generally, the higher your deductible, the lower your premium. Just be sure to choose a level that you can afford to pay if you file a claim.
Every insurance company is different, so discussing your policy with a licensed agent could help you find additional ways to save.
Frequently asked questions
Do I really need a renters insurance policy?
Everyone’s situation is different and purchasing any kind of insurance policy is a highly individualized decision. Renters insurance is not required by law in any state, but a landlord has the right to require tenants to purchase a policy. However, even if you are not required to carry coverage, renters insurance does typically offer quite a bit of coverage for a relatively low cost. If your budget is particularly tight, you may be able to take advantage of discounts to lower the cost of a renters insurance policy while still getting valuable coverages.
How do you get renters insurance?
The first step to getting a renters insurance policy is getting quotes from multiple insurance companies. You can typically do this online or by phone, or you could visit a local agency. You will need to provide your name, address and date of birth, and you can discuss your coverage needs with a representative. This information will help determine the options and levels of coverage that are right for you. Once you have chosen a renters quote to purchase, a representative will discuss the next steps. You may need to sign an application, and you will probably need to make at least one month’s payment.
How do I choose a renters insurance company?
Because there are several insurers that offer renters on the market, you may not know where to start your search. Determining what kind of coverages you need and what features you want — like a digital app, 24/7 customer service or a live agent — may help you to find carriers that fit your needs. You can then request quotes from several companies to compare prices, coverages, discounts and features.
What kind of insurance do I need if I own a rental home?
If you rent out a property, you may want to consider a landlord dwelling policy. This type of policy covers the structure of the home, detached structures and any personal property that you provide for the home (such as furniture). Your renters should consider purchasing a renters insurance policy, though, because a landlord dwelling policy does not provide any coverage for renters’ possessions.
If you operate a short-term vacation rental, you may want to speak with your insurance agent to make sure you have adequate insurance coverage. Your short-term vacation rental tenants likely will not need a renters insurance policy. If they already have a homeowners, condo owners or renters insurance policy, their personal property coverage should transfer to a short-term rental, just as it would transfer to a hotel room.
Does a renters insurance policy cover my pets?
That depends on the situation. Your pets are generally not considered personal property, so damage or injury to your pets is not typically covered by a renters insurance policy. For that, you need pet insurance. However, your liability coverage may cover damage or injury that your pets cause to others. However, some dog breeds and exotic animals are often excluded, and any animal that you do not disclose to your insurance company could also be excluded from coverage. Discussing your pet with your insurance company is often the best way to confirm your carrier’s guidelines.
Is renters insurance common?
Yes, renters insurance is a common policy. There are about 109 million renters in the United States, and most financial experts agree that renters insurance is a prudent purchase. Because of the prevalence of renters in the country, many different insurance companies offer renters insurance.