Do You Need Renter Insurance

So you’ve decided to move into a new apartment. You have posted a deposit, rent for the first and last month. Your bank account might be screaming for upfront costs, but you’re not done spending yet. It’s time to get into tenant insurance.

Renter insurance is not required by law like car insurance. But check the lease – the landlord may require it. Before we get into the numbers, let’s figure out what the renter’s insurance covers and what it doesn’t.

What is covered by renter’s insurance

As a renter, you don’t need to insure the beams and windows that make up your home — the owner does. Instead, you should consider insuring the things you have inside. But insurance does not only cover your personal property. Mike Crowe, CEO of comparison site Clearsurance , divides it into four features:

  • Pays to replace essential items if stolen or destroyed. This property coverage often applies outside of your home, for example if your laptop is stolen while on the subway.
  • It protects you from personal financial liability if someone gets hurt on the property you rent.
  • It pays for your living expenses if your home becomes uninhabitable within a short period of time, for example after a fire.
  • Sometimes it will cover damage you have caused to other people’s property outside your home. Let’s say you’re out with a friend and spill a drink on his laptop. Or he can cover you if you are walking your dog in the park and it bites someone.

What does not cover

If you live in a geographic area prone to natural disasters, you may need additional insurance.

Renters insurance covers plumbing problems, but does not cover floods caused by hurricanes and torrential rains. This coverage is available through the National Flood Insurance Program and if you live in a designated flood area it will be a must purchase. Comparison site ValuePenguin reports that the average cost of flood insurance is $ 699 per year. If you live in a particularly vulnerable state, your expenses can be almost double. Live in Connecticut? If you are in a designated flood area, you can look for flood insurance that costs $ 1,395 per year in addition to your regular renter’s policy.

You can also add earthquake insurance to your tenant policy if you need it. If you live in California , you may need to purchase coverage through the California Earthquake Authority, a non-profit insurance company. The average cost of separate earthquake insurance is $ 1.75 for every $ 1,000 of insurance coverage, as well as on ValuePenguin.

Another consideration for renters with roommates is that usually your policy only covers your personal belongings. You can either specifically ask that your roommate be listed on your policy, or they can get their own insurance.

However, be careful before volunteering to call your roommates your policy. Chatting with your roommates is stressful enough without worrying about how their actions might affect your insurance costs. Any claims made against your policy will be tracked in your Comprehensive Loss Control (CLUE) report, which keeps home and auto insurance records. This report helps service providers assess the risk of your insurance. If you end up needing to file a lawsuit (or two or three) because something happened to your roommate’s belongings, this will go on the policyholder’s report and could mean you end up paying more for insurance for many years.

How much is it

Put aside additional services like earthquake and flood coverage and let’s see how much regular coverage costs. According to the Insurance Information Institute , the average annual premium for a renter’s insurance policy is $ 185.

This rate can vary from state to state and even to postcode. And while you may not be able to move (and it probably isn’t worth the savings on renter insurance), you can adjust your coverage – and your expenses – to suit your needs.

Personal property insurance typically starts at around $ 30,000, Crowe said. If you are short or just want insurance coverage, some operators offer policies that cover $ 10,000 items. Meanwhile, liability coverage typically starts at $ 100,000 and can go up to $ 250,000.

But what kind of coverage do you need? “You need to evaluate your worst-case scenario if you have to get out of your pocket to replace things that you cannot live without completely,” Crowe said. This could mean clothing, at least your cell phone or computer. “In terms of liability, you need to consider if someone can sue you for something that happened on your property. Could you afford [hire a lawyer] without insurance? “

Inventory software, such as Sortly and surround can help you catalog photos and items in your house. In addition to helping you figure out what worries you the most and how much coverage you need; these tools can make it easier to file a claim with the details and photos you need.

If you’re not sure where to start when checking insurance rates, include $ 30,000 in personal property insurance coverage and $ 100,000 in liability coverage to get your base price. You can get a lower premium by increasing your deductible, meaning being willing to pay more out of pocket for the initial couple hundred dollars of what you need to replace if you need to file a claim.

Make sure the insurance coverage you are considering covers the replacement cost of your items, not the monetary value. Since most items depreciate over time, Crowe said, you need to know that you will receive enough money from your insurer to replace them with newer versions.

There are two more factors that can increase your value.

First, any particularly expensive item, such as a wedding ring or an expensive digital camera. Your insurance company may require you to take out insurance specifically for these valuables as a separate part of your policy coverage. The cost depends on the value of the item, and if you do not have a receipt for it (for example, relics), you may need a professional judgment.

The other is dog ownership. If you have a large dog or one of the “aggressive” breeds, your four-legged best friend can raise your stakes.

How to buy renter insurance

Obtaining renter insurance is not that difficult and time-consuming because there are fewer risk factors to be assessed compared to some other types of insurance, Crowe said. You can purchase coverage directly from an insurance company, through an agent, or through an aggregator platform that shows you quotes from multiple companies.

If you’re just starting out, Crowe recommends checking the customer review platforms first. His company, Clearsurance, offers this, but you can also check out Policygenius and even the Better Business Bureau.

If you already have auto insurance, check with that provider as you may be able to get a discount on your coverage package. You can also often get a discount by paying an annual premium up front instead of a monthly premium. And don’t forget about any additional security features like security system or video intercom. This can also lower your rates.


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