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What is renters insurance and why should I consider it?
As of 2019, roughly 36% of U.S. households were living in rental properties, meaning that a large percentage of the population opts to rent instead of own. While renters don’t own the property they live in, it’s still important to have some protection in place, which renters insurance, also referred to as an HO-4 policy, can provide.
A comprehensive renters insurance policy can help cover your personal belongings, liability exposure and additional living expenses, should your home become uninhabitable due to a covered event. Purchasing renters insurance is typically easy and the premiums are usually affordable compared to many other types of insurance. If you’re in the market for renters insurance, here’s what you need to know before purchasing a policy.
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 on 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 your apartment has 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.