How to Get Renters Insurance

If you rent an apartment or a condominium, renters insurance can help protect you if you suffer a break-in, a fire or any other woe. Renters insurance policies are a special type of insurance that differs from homeowners insurance because they only protect against damage to the interior of the building.

Renters insurance policies can provide you with money to replace your possessions that are stolen or damaged, help cover the costs of legal assistance if a guest is injured inside of your home and can even offer coverage for hotel and restaurant bills in the event that your home becomes unlivable due to a disaster.

If you’re living in an uninsured, rented space, Benzinga’s step-by-step guide is here to help you find the right protection.

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The Best Renters Insurance Companies

Renters Insurance in 3 Steps:

  1. Document your possessions
  2. Get quotes
  3. Choose your policy and enroll

What is Renters Insurance?

Renters insurance provides coverage if your possessions are lost, stolen or damaged in your home. Some landlords may requirethat you hold a certain amount of renters insurance coverage as a term of your lease. Renters insurance is usually much less expensive than homeowners insurance because it only covers the inside of the space; the outside is the responsibility of your landlord.

There are three main types of renters insurance:

Type 1: Personal Property

Personal property insurance provides coverage if your possessions are damaged or stolen. It is intended to replace the things you’ve lost.

Type 2: Personal Liability

Personal liability insurance helps cover medical bills and legal services in the event that someone is injured on your property and sues you for their expenses. For example, if your child leaves a toy on the stairs, a guest trips on it and sprains his or her ankle, then sues you for the cost of medical bills, personal liability coverage can help pay for both legal representation and any court-ordered payments.

Type 3: Loss of Use

Loss of use coverage is a type of add-on insurance that is sometimes bundled with renters insurance packages. Loss of use coverage helps cover bills if your home becomes unlivable due to a natural disaster. This can include the cost of a hotel, the cost of meals that you are forced to eat in a restaurant that you would normally cook at home and even immediate coverage for things you use on a daily basis like clothing for work.

What to Consider Before You Get a Policy

Factor 1: Fair Market Value vs. Replacement Value Coverage

Not all packages provide equal payouts. Many renters assume that when they file a claim, their renters insurance provider will cover the costs of everything included on the claim. Unfortunately, if you choose a policy that includes only fair market value coverage, you may be left with an expensive, surprise bill. Fair market value policies only cover the costs of what your lost item is currently worth; they do not necessarily cover the cost to replace them. This can become an issue if the item you’ve lost has depreciated or is no longer made.

The best renters insurance packages provide replacement value coverage instead of fair market value. Replacement coverage will fully cover the costs that you’ll incur replacing items that you’ve lost, less the cost of your deductible. It’s recommended that you choose a policy that offers replacement value coverage rather than fair market value coverage because many renters underestimate the amount that their electronics, furniture, and clothing may have depreciated since they purchased it.

Factor 2: Your Pets

Your policy probably won’t cover your pets. Though pets are usually classified as property by insurance companies (sorry, Fido and Fluffy), many renters insurance policies exclude coverage for damage caused to your home by pets and the development of health issues that harm the animals themselves. Though most renters insurance policies include pet liability coverage, certain breeds of dogs deemed to be more aggressive (like pit bulls, German shepherds and Rottweilers) may be excluded from liability coverage.

If you have a pet, make sure to thoroughly read through your insurance policy and understand what pet-related expenses are actually covered. In addition to pets, most renters insurance policies also exclude cars, trucks and other vehicles from coverage. You’ll have to purchase a separate auto insurance policy to keep yourself protected on the road.

Factor 3: Additional Protection

Your more expensive items may require additional protection. Most insurance policies include coverage limits for certain high-value items. For example, if you have a policy that provides $50,000 worth of personal property coverage, your policy may include a caveat that states that only $5,000 may be used as jewelry insurance.

Heirlooms, antiques, musical instruments, artwork, and jewels are some of the most commonly limited types of possessions.

If you have a valuable item that you’d like to cover, you can purchase a type of add-on coverage called a rider to protect each individual item. Riders can be added onto most renters insurance policies as long as you have proper documentation that the item is worth as much as you believe it is; this documentation usually comes in the form of appraisal documents which you should electronically back up in the event that the original appraisal is lost or damaged.

Riders also usually extend the limits of coverage to include more unique circumstances. For example, if you remove your wedding ring while sunbathing, fall asleep, and wake up to find the ring gone, your rider will provide coverage even if a typical insurance policy would find you at fault for the loss.

How to Get Renters Insurance

Step 1: Document Your Possessions

Before you choose a policy, take stock of everything that you actually own. Create a comprehensive list of all possessions that you want covered, including electronics, furniture, kitchen appliances, bicycles, athletic equipment, musical instruments, clothing and so on. Take photographs of everything you own and remember to back up your photos to a third-party cloud system.

Gather all proofs-of-purchase and appraisal documents that you own, scan them and upload them to the cloud as well. Estimate the value of replacements for the things you own and write them down. If you have trouble estimating the value of some of your possessions, search for similar items on a major retailer’s website.

Step 2: Get a Few Quotes

Research local insurance agents in your area. Corporate insurance companies like Allstate and Nationwide have offices across the country but small, locally-run insurance companies can also provide great coverage options. Speak with insurance agents either in-person or over the phone and ask about their policies.

A few questions you may want to ask your agents include:

  • What perils are covered? Do you cover damage from flooding and hurricanes?
  • Does your policy extend to pets?
  • Do you offer other types of insurance? Can I save money if I bundle my renters and auto insurance coverage with you?
  • What is my deductible and coinsurance percentage?
  • Does my policy cover my roommates as well?
  • Which of my possessions require a rider? What circumstances do your riders exclude from coverage?

After speaking with an agent, request a quote for coverage. Make sure to tell your agents about any high-value items. Most insurance companies allow you to get a free quote online, but many also allow you to receive a quote during a meeting as well.

Research the reputations of companies near you and gather at least three quotes from competitors to make sure that you’re getting the best price possible.

Step 3: Choose a Policy and Enroll

Compare the quotes that you’ve collected and the coverage from each policy and choose the one that you think suits your needs the best. Contact the insurance agent from the company that you’ve chosen; he or she will then walk you through the steps you’ll need to take to enroll.

Some insurance companies require you to pay a sign-on fee or the first and last month’s premium up front. Remember to ask about these costs before you enroll to make sure that you have enough money to get started. If you switch your renters insurance policy, remember to never cancel your old policy before you have chosen a replacement coverage provider; a gap in coverage can leave you unprotected and financially liable in the event of an accident.  

The Best Renters Insurance Companies

Based on the criteria above, we picked the best and most affordable renters insurance companies.

1. Progressive

Renters insurance policies from Progressive offer you comprehensive protection.

Under a Progressive policy, you get personal property coverage, liability coverage and also reimbursement for living expenses if your home or apartment is severely damaged.

Policies from Progressive are easy to understand and its website makes it clear what is and isn’t included with your coverage.

Additional policy options include water damage and personal injury protection. The average cost of renters insurance from Progressive is between $13 and $35 per month, which makes it an exceptionally affordable choice.

Progressive offers a great selection of policies available throughout the United States suitable for most renters’ budgets and needs. The insurance powerhouse also offers a wide range of discounts. Because Progressive offers over 30 insurance types, you’ll probably find some way to take advantage of its bundling discount.

You can also get a discount when you pay your policy in full, opt to receive documents via email or get a quote at least 3 days before you need it to go into effect. Progressive is our top choice for renters who don’t want to sacrifice quality for cost.

2. Lemonade

Lemonade is an innovative and engaging new insurance provider that offers some of the most affordable policies on the market. The company uses a new peer-to-peer insurance model.

It works like this: At the beginning of the month, everyone signed onto Lemonade pays a premium. Over the course of the month, Lemonade takes money out of the “pot” to cover insurance claims and administrative costs.

Lemonade also takes a small percentage of money out every month to hold in reserve in case the next month’s claims override the amount of money brought in by premiums.

At the end of the month, anything leftover is donated to charity. It’s a unique model that does away with the incentive most insurance companies have to pay out as little as possible in claims to maximize profits.

Renters can get insurance for as little as $5 a month, making Lemonade by far one of the cheapest ways for renters to protect themselves. Lemonade earned a Financial Stability Rating of A-Exceptional from Demotech Inc. Though Lemonade is currently only available in 19 states, the company’s model is rapidly expanding.

Lemonade’s sign up and claims process is exceptionally simple. You can get a quote from the app in as little as 90 seconds using an intuitive question-and-answer style format. Discounts are available for fire and burglar alarms. At the end of your signup, you receive a transparent policy summary that tells you exactly where your money goes.

Digital, socially responsible and exceptionally affordable, Lemonade is a top renters insurance choice if you’re tech-savvy.

3. Allstate

Allstate provides a standard bundling discount and discounts for adding a burglar alarm, signing up for automatic bill pay, staying claims-free and reaching retirement age.

If you already have an auto insurance policy from Allstate, you can get coverage for as little as $4 a month, which makes its auto bundling discount the best choice for renters. You can also adjust your deductible to pay even less per month.

Allstate’s policies are affordable and include many types of coverage that some competitors consider add-ons. For example, Allstate renters insurance plans include reimbursement for living expenses and guest medical insurance as standard coverage.

Add-ons from Allstate include flood protection, personal umbrella policies that boost your coverage in the event of a lawsuit and even identity theft protection.

Final Thoughts

It’s difficult to say exactly what you can expect to pay for renters insurance because each individual coverage provider uses its own unique formula to determine your premium.

For example, some insurers like State Farm do not ask about the breed of your dog when calculating your premium, some insurers only forbid coverage if you have a certain breed of dog and other insurers will refuse to insure you altogether if you own one of their restricted breeds.

Other factors like credit score, where you live and your claims history also each play a unique factor in each company’s premium formula. Before you commit to an insurance provider, get as many quotes as possible to make sure you’re not overpaying for coverage.

Frequently Asked Questions

1) Q: If my home is destroyed due to fire or weather, how long will it take for my insurance claim to be settled and my home to be repaired?

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1) Q: If my home is destroyed due to fire or weather, how long will it take for my insurance claim to be settled and my home to be repaired?
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From start to finish, the process could take anywhere from 12 to 24 months. The variables that play the largest role are the size of the loss and the insurance company you choose. Check her for the cheapest homeowners insurance quote.

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2) Q: What can I do to ensure that my home is properly covered?

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2) Q: What can I do to ensure that my home is properly covered?
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The most important thing you can do is have a conversation with your agent or carrier to be sure you have the right amount of coverage. Avoid putting just the minimum coverage on your home: Remember, if your home is destroyed, you need to have enough coverage to rebuild the entire home, so you’ll want to insure it for more than just the market value. Also, notify your insurer of renovations or changes that you make to your home — and don’t forget to check to be sure you have enough liability coverage. Get the best quote today from our top providers.

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3) Q: How does my home insurance deductible work?

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3) Q: How does my home insurance deductible work?
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The deductible is the part of the claim that you pay and the deductible amount will be deducted from the payout on covered claims. Your deductible can be either a fixed amount, like $1,000, or it can be a percentage of the insured value of your home, such as 2%. In many states, it’s common to have a deductible for damage due to wind or hail as well. Damaged caused by these risks can trigger a special wind/hail deductible, which is usually percentage-based.

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