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7 Best Renters Insurance Options

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A lot of what we have is so important that it requires protection.

For instance, we need to have insurance on our cars, our house, our boats and even properties that we’re renting from someone else.

There’s a lot of questions when it comes to renters insurance, like:

  • What are you getting out of that?
  • What should I look for?
  • Are there any discounts available?
  • What does renters insurance cover?

We want to make sure you have a full understanding of what renters insurance is and the best insurance companies out there.

So we’ve answered all the above questions and more in this article for you.

We’ll cover:

What Is The Purpose of Renters Insurance?

Renters insurance protects renters from financial loss in case of an unexpected event.

These unexpected events could be things like fire, theft, vandalism, and even injury on the property. Renters insurance will also pay for the costs associated with your relocation due to a disaster.

Most people are under the impression that it’s the landlord’s responsibility to pay for your property if something were to happen. But the reality is that your landlord’s homeowner’s insurance just protects the building you live in.

Your landlord’s insurance will take care of any structural damage to the building itself. But, it will not cover your personal belongings.

It’s up to you to make sure you have the proper insurance to cover your things.

Who Needs Renters Insurance?

Anyone renting an apartment or a house needs renters insurance. 

Besides your standard apartment living, what other people should consider renters insurance?

  • Anyone living in a care facility
  • Adults that are living with their parents
  • Any student that is not covered by their parents policy
  • Any member of the armed services

In other words anyone who does not carry a homeowner’s insurance policy or isn’t covered by another policy.

Think about it…

best renters insurance

Can you even imagine how much money you would need to replace everything?

Picking Your Renters Insurance Policy

The first thing to do is determine how much coverage you’ll need your policy to have.

It’s important to come up with an accurate number as this is the amount you’ll have to replace your possessions if they are lost.

If you don’t pick the appropriate amount of coverage, you could find yourself not being able to replace everything that’s lost.

If you don’t know how much coverage you’ll need, there are online calculators provided on most insurance company’s websites. Tools like these will help you estimate the total cost of your personal items.

What Does Renters Insurance Cover?

Renters insurance will cover your insurance perils.

So, what are insurance perils?

A peril is whatever causes a loss. The most common perils included in renters insurance are fire, theft, vandalism, water damage, lightning and smoke damage.

best renters insuranceIt’s important to know which perils are prevalent to your area and determine if you have the proper coverage for them.

Here’s An Example:

Let’s say that you live in an area that is susceptible to lightning strikes. You’ll want to verify that lightning is covered under the perils listed in your insurance policy. If it’s not currently included, make sure you get it amended to have it.

Among the coverage that you can get under these policies you will find the following:

Personal Property Coverage

Personal property coverage is what covers everything you have inside of the property your’e renting.

To get an accurate figure for your possessions, walk through your house and take a look at everything you own. You’ll need to add up how much it’ll cost to replace it all.

Make sure you include furniture, clothing, appliances, jewelry, etc. in your final number.

You have absolutely no control over events like a fire, theft, vandalism, tornado, hurricane, explosions, etc. It’s scary just to think about losing everything and not having enough to replace it.

This is why renters insurance is so important. 

Replacement Cost vs. Actual Cash Value

When you place a claim, there are 2 ways for the insurance company to reimburse you.

The first way is called Replacement Cost. If you go this route, the insurance company will reimburse the cost of replacing your items with new ones.

The second option is called Actual Cash Value. By doing it this way, the insurance company will reimburse the cost of replacing your things minus depreciation. Simply, you’ll be recouping the current value of your possessions, not their original price.

So if you bought a couch for $1,500 3 years ago, you won’t receive that amount back. Instead, you’ll get the depreciated value that the insurance company puts on the item.

It’s recommended that you look for a policy that will give you the Replacement Cost. This will guarantee that you’ll be able to replace your things that are lost.

Medical Payment Coverage

Renters insurance will pay for the medical bills of any guest that is injured in your residence, even if you were not the cause of injury. They’ll cover things like doctor fees, hospitalizations, blood-work, and x-rays.

Keep in mind that you need to verify the limits listed in your policy. Some policies will have a limit of just $1,000 to cover medical bills.

In most cases, this will not be enough and any additional bills are left up to you. So make sure your medical payment coverage has a limit you’re comfortable with.

Additional Costs

Renters insurance will cover the cost of your accommodations if your residence becomes uninhabitable due to an unforeseen event.

This includes expenses like hotel room and food while you get back on your feet.

Extended Coverage

Extended Coverage is for your belongings that are especially valuable. This could be a collection- like stamps or coins, as well as any piece of expensive jewelry.

If you have something that is extremely valuable, you should verify if the insurance company you’re looking into will provide extended coverage for the item.

After you find out how much you need to insure everything for, you need to find out how much it’ll cost you.

What Does Renters Insurance Cost?

Based on the National Association of Insurance Commissioners the average renters insurance policy is around the $190 a year.

best renters insurance

But it’s really going to depend on your location. Obviously, big cities like New York will be more expensive than a rural town in Mississippi.

Overall, renters insurance is not an expensive product based on all the benefits it has.

Factors That Determine Renters Insurance Cost

Several factors can have an influence in the cost of your renters insurance premium.

  • Location:  You can expect to pay more if you live in an area where you are more susceptible to tornadoes, natural disasters, and wildfire. You should also expect a higher premium if you live in a high crime area. 
  • Level of coverage: Your level of coverage will determine the price of your premium. Use an online calculator to estimate the amount of coverage you’ll need.
  • Deductible: Your deductible is the amount you’ll have to pay before your insurance kicks in and does their part. The rule of thumb here is that the lower your premium, the higher your deductible will be. And of course, the higher your premium is, the lower your deductible will be. It’s all about creating a balance that you’re comfortable with.
  • Actual cash value vs. Replacement cost: We talked earlier about the difference between actual cash value vs the replacement cost. If you select a policy that goes with the replacement cost, your policy will cover the full replacement of the lost item. This will come with a higher premium. On the other hand, if you have a policy that uses the actual cash value, you’ll be getting the depreciated value of your item. Doing it this way will come with a lower premium because you’ll be responsible for more on the back end.

Comparing The Cost of Renters Insurance

The most efficient renter insurance companies will provide an online quoting tool on their website.

This will hep you determine how much you’ll end up paying on a monthly basis.

Before you select a renters insurance policy, take the time to explore and compare quotes.

You may be surprised at how affordable of an option you find!

Are There Any Discounts on Renters Insurance?

There are different discounts available that’ll make your payment a little more comfortable for you.

Among these, you have the option of a bundle policy.

This is super easy to get!

Create a bundle by grouping your auto and renters insurance with the same company. By doing this, you’ll receive a discount anywhere from 15% all the way up to 30%.

Sounds good right?

Another discount you can get is called a claims free discount. This will become available to you if you have gone a certain period of time without filing a claim.

Yet another discount can be given to you just by installing special devices for protection. Examples of these devices are: security system, fire extinguisher, burglar alarm or smoke detectors.

This option does not promise a huge discount on its own, but when you combine it with the other discounts, you’ll be saving a pretty penny!

Now that you know how much coverage you’ll need, and how to get a price you’re comfortable with, let’s discuss some of the options that are out there.

7 Best Renters Insurance Options

These are our top 7 picks for insurance companies to get a renters insurance policy with.

Click through and explore your options. Each of these sites will be able to provide you with an insurance quote to help you make the best decision.

1. American Family

  • Max Liability Coverage – $1,000,000
  • Over 91 years of experience
  • A+  BBB Rating

2. Allstate  

  • Max Liability Coverage: $500,000
  • Over 87 years of experience
  • A   BBB Rating

3. Erie Insurance

  • Max Liability Coverage: N/A
  • Over 93 years of experience
  • A+  BBB Rating

4. Liberty Mutual  

  • Max Liability Coverage: $1,000,000
  • Over 106 years of experience
  • B+  BBB Rating

5. Nationwide

  • Max Liability Coverage: $1,000,000
  • Over 92 years of experience
  • A+  BBB Rating

6. Travelers

  • Max Liability Coverage: $1,000,000
  • Over 165 years of experience
  • A+  BBB Rating

7. State Farm

  • Max Liability Coverage: $1,000,000
  • Over 96 years of experience
  • A-   BBB Rating

These insurance companies have low monthly fees and competitive premium prices. You can easily get a quote online, and they all come with a limited number of complaints.

Is Renters Insurance Worth It?

Renters insurance is worth it because it helps protect your valuables.

Maybe you go to great lengths to be responsible and take care of your things. Why throw money at an insurance policy you’ll never use?

Some things are just beyond our control. Maybe you’re responsible, but can you trust your next door neighbor? His carelessness could be the reason your apartment catches fire.

By having renters insurance, you won’t have to worry about finding the money to replace your prized possessions if something were to happen.

Conclusion

Take a minute to look around your house at everything you’d have to replace in case of unforeseen circumstances.

Believe me, it’s going to add up quick.

You don’t have control over unexpected events, but you do have control over the amount of protection you have against them.

Renters insurance will give you the peace of mind to know you’re protected in these situations.

Do you have renters insurance? Let us know in the comments!

Up Next: 37 Tips To Debt Free Living

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