Do I need renters insurance? That question plagues many renters who can’t decide if signing up for a policy is worth the hassle — or the cost.
But renters insurance costs just under $16 a month on average, according to the Insurance Information Institute (III), which means finding cheap renters insurance with the coverage you need is possible.
“Given the benefits that a renters insurance policy provides, at a relatively low price point of under $20 per month, you should consider it must-have coverage,” said Jennifer Fitzgerald, CEO and co-founder of insurance comparison site Policygenius.
Here’s how you can find cheap renters insurance with the best coverage for you.
What is renters insurance?
Like most forms of insurance, renters insurance provides protection to the policyholder and their property. In this case, that’s you — the renter — and your belongings. In return, you pay insurance premiums to maintain coverage.
What does renters insurance cover? Here are some ways a renters insurance policy can protect you:
- Replacing stolen items if your home or car is broken into
- Replacing items damaged by disasters such as vandalism, floods, or fires
- Providing liability coverage if you damage the property or someone is hurt in your home
- Paying for alternative lodging if your rental becomes uninhabitable
Yes, you do need renters insurance
Many renters believe they don’t need insurance because their landlord owns and likely insures the residence. However, a landlord’s property insurance usually applies only to the property and home itself. It often won’t cover your belongings, your guests, or you.
Just 41 percent of renters reported having such a policy, per the III. By comparison, 93 percent of homeowners said they were insured.
But finding cheap renters insurance is easier than finding a good deal on homeowners insurance. The average homeowners insurance premium is $1,132 per year, for example. That’s about six times the average cost of renters insurance, which is approximately $190 per year.
Without renters insurance, you’re one unfortunate event away from being thousands of dollars in the hole. Securing renters insurance is also a requirement of many lease agreements, so opting not to get a policy could be grounds for eviction. At just $16 a month, a cheap renters insurance policy is well worth the peace of mind.
6 steps you can take to get cheap renters insurance
Shopping for cheap renters insurance can be a balancing act between paying for enough coverage and finding a good deal. We talked to a few insurance experts to get their tips on finding the right coverage at the right price.
1. Take stock of your stuff
“You obviously want enough coverage to make sure all of your belongings are protected,” Fitzgerald said. “A home inventory can help with this.”
“There are even apps that let you snap a picture and store everything in one place,” Fitzgerald added. Many major insurance providers, including Allstate and Liberty Mutual, have their own home inventory apps. You also can use a third-party app such as Sortly.
2. Estimate the coverage you need
As you review your belongings, make sure to take note of each item’s replacement cost. This cost isn’t the item’s current value but what you would pay to replace it. Then, you can add up the replacement costs of all your belongings to get an idea of how much renters insurance coverage you need.
An average renter owns about $30,000 worth of stuff, according to Allstate. If the cost to replace your belongings is about that figure or less, you can purchase that amount of coverage while keeping premiums low.
However, “the amount of coverage you need depends on your specific situation and the value of the items you’re covering,” Fitzgerald pointed out.
If your replacement cost valuation is higher, you’ll want to make sure your coverage limit matches. You can pay more for a higher coverage limit, or you can choose an umbrella policy, suggested Agostino Filippone, an attorney at Chokshi Filippone Law LLC in Chicago.
“An umbrella policy is an additional policy that provides increased limits over the underlying policy,” Filippone said. “Many times, opting for the umbrella will be a cheaper premium than increasing coverage limits on the underlying policy.”
3. Get multiple renters insurance quotes
After you get a ballpark estimate of the renters insurance coverage you need, the next step is to shop around.
Shane Lee, a business development associate with apartment search site RentHop, recommended getting renters insurance rate quotes from multiple providers. “Getting a quote doesn’t cost you anything, and it gives you a sense of how much you might be paying,” she said.
Lee suggested comparing the value each policy offers as well: “Reading through the terms is always key — usually when the insurance company gives you a quote, it also tells you what’s covered and what’s not.”
4. Bundle your renters insurance
“For companies that offer different types of insurance, you may be able to save by bundling products,” Fitzgerald pointed out.
“If you’re already getting your auto insurance, for instance, from somewhere, it might be cheaper to also get your renters insurance through them rather than go somewhere else,” she said.
5. Consider supplemental coverage
Make sure you understand the limits of your coverage and when it might not apply.
For instance, many renters insurance policies won’t cover damage due to earthquakes or floods. If you’re in an area with a high risk of such events occurring, it might be wise to purchase a supplemental insurance policy.
Other policies might have a cap on insuring high-value items such as computers, art, or jewelry — in which case you might be able to add a rider to your renters insurance policy, said Filippone.
“The rider acts as kind of separate policy to help provide protection in case you have low limits, exclusions, depreciation schedules, or other issues which might otherwise shortchange your recovery,” Filippone added.
6. Look for additional ways to save on your cheap renters insurance
As you shop around for cheap renters insurance, here are a few other ways you can save money:
- Install safety devices: Many insurance providers offer discounts to renters who install safety and security devices. Allstate and State Farm, for instance, both offer discounts on properties with smoke detectors or home security systems. Just check with your landlord before making any permanent property modifications.
- Opt for higher deductibles: “If you increase your deductible (how much you pay before your insurance kicks in), you can lower your upfront premium costs,” Fitzgerald pointed out. “Just be sure you have enough in savings to potentially cover the entire deductible.”
- Set up automatic payments: While it’s not a common deal, your insurance provider might offer savings for payments that are automatically withdrawn from a bank account. Setting up autopay with Allstate, for example, gives you a 5 percent discount.
- Maintain good credit: A positive credit history will be viewed favorably by insurance providers that include a credit check in their process. If you keep your credit score up, it could help you get cheap renters insurance.
Utilize your cheap renters insurance coverage
Lastly, renters insurance is most beneficial when you actually use it.
Even if you’re unsure about whether your policy covers your claim, it’s worthwhile to call and check. There might be an allowance or rule that applies to your situation. Or you could be lucky enough to speak with a representative who’s sympathetic to your situation.
Hopefully you won’t need to make a claim under your renters insurance. But if you’re in a situation where you could, don’t hesitate to do so. Protecting yourself against such unexpected circumstances is exactly why you have this coverage.
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