Renters Insurance Guide – A Must Read Before You Buy

Are you a tenant who has rented a property like duplex, apartment, a
studio or a condominium and looking for a policy that provides protection
against losses then a renters insurance is just for you? Sometimes renter’s
insurance is also referred to as the tenant insurance. It provides extensive
coverage to different types of losses and liabilities.

Meaning and Definition of Renter’s Insurance

Collins Dictionary defines renter’s insurance as an insurance that
protects tenants or renters against the property loss. Wikipedia puts it as an
insurance policy that offers some advantages of homeowners except the coverage
for dwelling or structure.

What Renter’s Insurance Covers?

As you are buying a renters insurance cover, you might be looking
forward to Items covered in this insurance? Here is the coverage you get with
such an insurance. 

• Personal Property   
• Liability
• Additional Living Expenses

Let’s discuss these coverages one by one and get a clear idea about what
it covers and what it doesn’t.

Personal Property

What it Covers

In the case of loss to property, the coverage includes the cost of
repair or replacement. There are instances when you may suffer a loss to
furniture, electronics or other household items. But this coverage is provided
in the limits of your policy.

What it Doesn’t?

If you have suffered a property loss that is above your coverage limit
then it won’t be covered.

Liability

What it Covers

If you incidentally damage someone’s else property than the cost of
repair will be covered by the insurance. If a guest gets injured at your
property, it may cover his medical bills.

What it Doesn’t?

A liability cover which is beyond your insurance limit won’t be
permitted.

Additional Living Expense

What it Covers

There are times when the residence you are renting get damaged to an
extent that it is not worth living. In such a case, the expense of staying at a
hotel is covered.

What it Doesn’t?

The additional living expenses that are beyond your insurance coverage
limit can be reimbursed.

How to Buy a Renter’s Insurance

Due to importance of renter’s insurance, you must be looking forward to
buying one. But you can’t just buy an insurance as here are certain factors
that needs to be consider before buying it.

Know About the Coverage

The purpose of buying a renters insurance is to get your damage covered
in the times of theft, accident or a natural disaster. So, you should have a
coverage that is sufficient to cover your losses. Getting to know the coverage
amount is very simple. You just need to create a list of possession and you
will have a fair idea about the value of your belongings. Knowing the prices of
your possessions when you bought and their current value would give you a near
accurate idea. While making such estimates you should also know that a renter’s
insurance also covers liability so you should also take into account while
deciding a coverage amount. You should ask whether it covers your friends,
roommates or kids away from home.

Things Not Covered in Renter’s Insurance

As you have got to know the things covered, it is time to know things
not covered in renter’s insurance. Most of the times it covers the damage done
to your property, but there are certain policies that don’t cover damages done
due to natural disasters like earthquake and floods. If you ask these things to
be covered, you can buy a separate policy for that. You can also ask the major
insurance cover provider about how these natural disasters can be covered. You
should understand about the coverage before you buy an insurance.

Know Your Coverage Type

You are advised to know about your coverage type while buying a renters
insurance. You have to choose from Actual Cash Value policy and Replacement
Value policy. Let us discuss the things one by one.

Actual Cash Value policy

An actual cash value takes into account depreciation and daily wear and
tear while evaluating your damaged property. The major benefit of such coverage
type is that your premiums are comparatively low. But it is not all rosy with
this coverage as you might not be able to get a good amount in claims.

Replacement Value policy

In such types of coverages depreciation and wear and tear are not taken
into account while determining the value of your damaged property. You will get
a claim amount that is at par with the current market price of the damaged
property. But these advantages don’t come for free as you have to pay an
increased premium for this.

Group Your Renter’s Insurance

You can bundle your renter’s insurance with your existing policies to
get a reduced premium. Your car insurance company may be providing a tenant
insurance policy and they may offer you a bundling option. Ask them if they are
offering such an option? If yes, then how beneficial is it for you?

Prefer a Higher Deductible

A deductible is the amount you pay from your pocket before an insurance
company starts paying you. In case of a renter’s insurance the deductible
amount varies between $200 to $1000. You might be looking forward to choose a
small amount. But we advise you to not to fall into such a temptation. You may
have to pay for higher amount in the form of deductibles but in long run it
gets compensated as you have to pay a low premium.

Also Read:  Homeowners Insurance – Get Your Insurance Right

How to Get a Cheap Renters Insurance

Want to get a cheap renter’s insurance with all benefits. Don’t rule out
its possibility. There are certain steps you should follow to get a renter’s
insurance with a good coverage at a reduced price. Here we list the important
steps.

Get Standard Security Devices

Insurance companies may give you a discount if your home is fitted with
cutting edge security devices. Find some of the security devices like CCTV
cameras, smoke detectors, fire extinguishers burglars alarm. You should also up
security for the doors and windows of your apartment. And there are reasons why
such efforts lead to reduced insurance premium. Renter’s insurance covers for
theft and a home with good security system reduces the risk of theft and
burglary.

Prepare to Douse the Fire

Fire is another threat that gets covered by a renter’s insurance. So, a
state-of-the-art firefighting arrangement will help you get a cheaper renter’s insurance.
You should install a smoke alarm, a fire extinguisher and a sprinkler. There
are chances that your landlord may have installed it before.

Bundle Your Insurance

Bundling your renter’s insurance with other kinds of insurance policies
will help get a cheaper renter’s insurance. Most of the people bundle their
insurance with auto insurance. But some insurance companies also allow bundling
it with some other insurance policies. If the date of premium of your existing
policy is nearing, you may ask you insurance company that if it can be bundled
with a tenant insurance.

Request Quotes

One of the best ways to get a cheap renter’s insurance is requesting
quotes from all the prominent insurance companies. You should submit a request
to them along with the list of coverages and ask for the best premium they can
quote. Based on the quotations received you can compare the prices and
negotiate further.

Consider Changing Apartment

It is not required always, but there are times when the building you are
living may not be in good condition and you might end up paying a high premium.
The size of apartment, zip code and construction quality all affect the
premium. So, if you are living in an apartment that is not built well, far
bigger than your requirements, or doesn’t have security features then you might
consider shifting to another apartment.

Major Factors Determining your Renters Premium

Location

Location is one of the major factors that determines the cost of
renter’s insurance in the USA. Some states cost higher while others cost low. The
cost of insurance in state like Mississippi, Oklahoma, Texas, Georgia and Alabama
& Louisiana is higher while the cost is lower in states like North Dakota, Iowa,
Minnesota, Wisconsin South Dakotand. Weather and susceptibility to natural
disasters are other determining factors. The city, neighbourhood, building
structure and security are other determining factors.

Credit Score

A large number of your financial transaction depends on your credit
score and renter’s insurance is one of them. A good credit score means your
financial condition is good and you are paying the bills on time. Such things send
a good signal to insurance company that you are able to pay the premium on time
and they may lower the cost of insurance for you.

Your Belongings

With renter’s insurance you get a cover for several things that are in
your home. More the number of things, more the costs and vice versa. Here total
value of the items is considered as a base for determining your insurance
amount. For example, if you have a two-bedroom apartment full of high-end stuff
then the insurance cost will be more as compared to three-bedroom apartment
with ordinary stuff.

Top Reasons to Buy Renter’s Insurance:

One of the many renters have is that if a renter’s insurance is all that
needed. Why should they buy one in first place? Several questions like this
might be crossing their mind. Here we give you compelling reason to add it to
your list of insurance.

Landlord’s Insurance Doesn’t Covers You

Many renters believe that they don’t need a renter’s insurance as they
are already covered in the landlord’s insurance. But most of the time it is not
the case. In several cases the landlord’s insurance is only limited to building
structure and it doesn’t cover your personal belongings. So, you must consider
buying a renter’s insurance to cover your belongings.

It Covers Your Personal Property

Your personal property needs to be safeguarded against theft, damage and
any kind of eventuality and a renter’s insurance does this exactly. Thieves
might barge into your property; jewellery might be stolen or luggage may be
missing while you are on travel. These things might seem small but the cost of
insurance is far lower than that you end up paying to replace it. A renters
policy covers a long list of perils.

Here is a word of caution. Renter’s policy doesn’t cover damage done due
to earthquakes, floods and hurricane. Riders are needed to cover these things. Damages
caused due to intentional acts are not covered in renter’s insurance.

Landlords Suggest It

Sometimes landlords also want to have their tenants to have a renter’s
insurance. Usually, the landlord’s insurance covers the land and building
structure and not the personal belonging of the tenants. The landlords want you
to have a renter’s insurance of your own so that they can shift some
responsibilities to you.

Offers Liability Coverage

Most of the renter’s insurance policies provide liability coverage. It protects
you against someone get injured at your property or his belongings are stolen
at your property. But this expense is within the coverage limit. Generally,
insurance policies provide a liability coverage limit up to $100,000 along with
a liability coverage. But you can also request for a big coverage if it is
really required. A few examples of liability are as follows:

• You have an aggressive pet that bites a guest.
• You have invited some friends and a fight ensues
• One of your visitors slips and fall in your apartment.
  

It Covers Your Stuff When You Are Out

With a renter’s insurance you get coverage for your belongings when you
are at home or you are in travel. Some renter’s insurance policies cover you
while you are visiting different destinations. So, you should check with your
insurance service provider about the types of coverages they are providing.

Provides Living Expenses

There are times when your home is not worth living due to natural
disaster or any other reason. You need to look for a space to live temporarily
until your apartment becomes fit to live again. In such a case, your renter’s
insurance comes to your rescue and provides you living expenses so that you can
rent an apartment. So, while buying an insurance you should check whether these
clauses are included in your policy.

Why Does Renter’s Insurance Worth It?

As you are paying a certain amount to buy an insurance you must have
questions whether this insurance is worth it or not. Here we would be
discussing why it is worth it.

You Get Personal Property Damage

On an average, a renters household ranges between $20,000 to $30,000. If
your property worth this amount gets stolen or damaged due to some accidents
like fire, then there should be a coverage that should provide for your loss.
Here a renter’s amount will provide for the losses up to your coverage limit.

Personal Liability Get Covered

There are times, when some guests come to visit you and get injured due
to some eventuality like slip and fall. In other times, you may have invited
your friends for party and an altercation ensues and things get out of control.
In such a case, you have to provide for the injuries and other losses. Here a
renters insurance takes the financial burden.

Provides Living Expenses

Natural disasters and perils can strike your apartment anytime and it
may make your apartment inhabitable for sometimes. You may have to move to a
temporary residence or a hotel until mess is cleared from your apartment and it
becomes worth living once again. If you don’t have an insurance, it may burn a
hole in your pocket. Do you still have doubts where the renter’s insurance is
worth it?

Covers Medical Features

This feature is covered under the personal liability coverage. If
someone gets injured at your property you have to provide them with medical
expenses. The cost may go up to thousands of dollars. A renters insurance
provides the medical coverage up to your coverage limit.

Do I need a Renters Insurance?

Anyone living in a rented space like apartment, home or any sort of
space should buy a renters insurance. Sometimes landlords also suggest you to
buy an insurance as their coverage is only limited to ground and building
structure. And if you have a renter’s insurance, the damage to property and
injury to someone get covered under your insurance. It reduces the liability
for landlord.

It goes without saying that you also be looking for an insurance to
cover your belongings.

How Much Renter’s Insurance Coverage Should I Get?

How much insurance coverage should I get is the eternal question for
many people seeking a renter’s insurance? Deciding on an insurance coverage
needs a pragmatic approach. Here is how to decide your coverage.

Make an Inventory of Your Belongings

You are buying a renters insurance because you want to get your personal
belongings covered against damage, loss or theft. So, you must have a coverage
that is just appropriate to meet your needs. Preparing a home inventory is the
right way to do this. With this you list all your belongings, their age, date
of purchase and their current value. This gives a fair idea of value of your
possessions that help you get an appropriate cover.

Bundling Options

Several insurance companies offer a good discount if you buy more than
one policy. For example, if you have bought an auto insurance from a company
and buying a tenant insurance from the same company then both these policies
can be bundled together and you will have to pay a low premium.

Selecting the Right Deductible

If is the amount you have to pay from your pocket before your insurance
company start paying the claim. In other words, it is the amount deducted from
the payable from each claim.

Reasons Why Your Renter’s Insurance so high?

The cost of renters insurance depends on several factors. Location, law
and order situation, deductible and coverage all have a bearing on the cost of
insurance. Here we discuss reasons of high insurance cost.

Location

If you change your apartment and move to a different location you might see
an increase in the amount of your renter’s insurance. The nearness of your new
home to a fire station, increases crime rate and susceptibility to natural
disaster can lead to a change in your insurance cost.

If you move to an area that registers a high crime rate or an area that
is susceptible to natural disasters then you may see a rise in the cost of your
renter’s insurance.

Likewise, if you move to an area which is safe, not susceptible to
natural disaster and close to a fire station then the cost of your renter’s
insurance is low.

Apart from that your apartment building and you unit also have a bearing
on the cost of insurance. The apartment with a good security like security
alarm, strong gates and fire alarm may lower your insurance amount.

You Don’t Have a Good Credit

Your credit score also has a bearing on the cost of your renter’s
insurance. While giving you an insurance the insurance companies generally go
through your credit score to know your ability to pay a premium. If your credit
score is negatively affected you end up paying a high premium. On the contrary
if you have a high credit score your premium amount will be reduced.

Addition to Coverage

If you make addition to the list of belongings to be covered, your
insurance amount will change. For example, if you have added some new equipment
to your household, or your wife has bought some new expensive jewellery and you
want to get it covered then you might have to buy an insurance floater. In such
a case, the cost of your insurance may be high. You may talk to your insurance
company in this regard.

Changes within Insurance Company

Sometimes changes within insurance company can lead to a high renter’s
insurance. While buying an insurance you should talk about the possibility of
changes in premium. You should compare these things with other insurance
companies. Some companies are expert in high-risk insurance while other are
not. You should also talk to them to if they can offer any discount.

Deductible

It is the amount you pay before you start getting your claim. You can
get a lower premium with a hight deductible amount. For example, if you have a
damage of $5000 thousand and your deductible is $1000 you have to pay $1000
before you get the claim for $4000.

How Covid 19 or Corona Virus is Impacting Renter’s
Insurance?

The covid-19 pandemic has been affecting industries worldwide, forcing
them to adjust to the new normal. The insurance industry is no exception. If
you are a renter’s insurance owner you might see several changes in billing and
claim of your insurance.

Agents and Adjusters Working from Home

In this new scenario insurance agents and adjusters are working form
their homes. The claims are processed electronically from agents’ home because
most of the insurance offices are not working at full capacity. You may be
asked to provide pictures and video footages of your damaged items supporting
your claims. You should be ready to provide them as person-to-person meeting
and appointments are being discouraged due to contain covid-19 pandemic.

Resolving claims thorough electronic modes is becoming an increasing
acceptable practice for renter’s insurance as compared to other insurance
claims where companies insist to send accessors.

Temporary Payment Suspension

Coronavirus pandemic has affected lives in many ways and one such thing
is the loss of jobs. Millions of people have lost their jobs making them unable
to pay for the renters insurance policies. To help people, many insurance
companies have come up with temporary payment suspension. Some states are
offering grace period for payment of premiums. Other insurance companies have
also come forward extending due dates for payments and extending fees.

Increased Liability Coverage due to Staying at Home

Due to corona outbreaks here and there a large number of Americans and
their families are staying at homes. Due to this, regular wear and tear happens
that lead to property damages. As you spend more time at home the chances of
damage to your home and property are higher.

Some visitors like food delivery boys, technicians and domestic help
might get injured on your property that may add to your liabilities. There are
chances that you might be held responsible for someone getting infected with
corona then it would be a big legal issue for you.

Renters Insurance – Questions and Answers

How much does a typical renters insurance policy cost
per month?

Many people want to know the per month cost of renters insurance policy.
Here we want to say that cost of insurance depends on a number of factors.
Coverage, location, deductible and several other things affect the monthly cost
of renters insurance. But here we can give you an average cost. As per the data
from Insurance
Information Institute, the average monthly cost of
renter’s insurance is $14.90.

Does renter’s insurance cover theft?

A renter’s insurance generally covers theft. You are covered for the theft
even if you are not at home. But there are some exceptions to it. If your car
is stolen it won’t be covered under the car or auto insurance not in renter’s
insurance.

Does renter’s insurance covers mold?

Your renter’s policy will cover mold only if the mold is caused by a
peril that is covered under your policy. Such perils involve weather, human
activity, factors like fire and ice. But these things will only be covered if your
policy is all risk policy. Some policies also make a list of exclusions saying
what is not covered. If your policy doesn’t cover mold you should consider
buying a separate policy for it.

Does renter’s insurance cover broken windows?

There could be no specific answers and it depends on situations. If your
window is broken due to some natural disasters, it can be covered under the
personal property. But if you break your window due to some misadventure it
won’t be covered.

How much should I cover for renter’s insurance?

Generally, a renter’s insurance provides a coverage of $100,000 as
liability coverage. This coverage is sufficient for a common household. But there
are times when your assets are more than $100,000, in such a case, you should
buy an insurance cover which is equal to or more than the value of your assets.

Why do landlords require renter’s insurance?

Generally landlords have an insurance of their own but they need their renters
to buy an insurance so that damage to renter’s belonging can be covered. This
means reduced liability to landlord. There are times when the rented apartment
catches fire or get stricken by a disaster. In such a scenario, the cost of
living in a hotel or somewhere else is reimbursed by renters insurance.

Also Read

How to Get an Insurance – A Complete Insurance Buying Guide