If you rent, you need renters insurance! No ifs, ands or buts about it. Unless you’re a minimalist whose entire life could fit in a suitcase, your belongings are worth a lot more than you realize.
Actually, most people underestimate how much their stuff is worth. But don’t leave yourself exposed. If something happened to your apartment or house, renters insurance is the perfect back-up plan. It’s often required by landlords too. But only 41% of renters say they have it.1
We’ll explain more of why you need it. And we’ll walk you through how to buy renters insurance so you can check it off your to-do list.
Why Do I Need Renters Insurance?
Renters insurance is a type of protection that will cover the cost of your possessions if they’re damaged, vandalized or stolen while you’re renting. Similar to homeowners insurance, it’s one of the eight types of insurance you can’t go without.
Let’s pretend you’re renting and your apartment is broken into. Your laptop, iPad, jewelry, and brand-new flatscreen TV are stolen. Gone with the wind. What can you do?
Protect your home and your budget with the right coverage!
First, the thief is probably not going to have a change of heart and show up at your doorstep with all your stuff. And even if the police catch them, that’s still no guarantee you’re going to see your things again. But what about your landlord? Well, they’re not going to write you a check out of the generosity of their heart.
Enter renters insurance (that has a nice ring to it). Renters insurance does three main things:
- Covers the cost of replacing your things in the event of a theft, fire, storm, vandalism, electrical malfunctions or plumbing issues.
- Gives you liability coverage, meaning if someone is injured while at your place, you’ll be protected from medical bills or legal fees.
- Pays for additional living expenses if you need to stay at a hotel while your place is being repaired.
Now that you know you need it, you’re asking, How do I get renters insurance? Good question! Let’s find out.
How to Get Renters Insurance: 5 Tips
Don’t be overwhelmed. Follow these tips and you’ll soon be a renters insurance Jedi Master (if there is such a thing).
1. Research what your landlord covers.
The first step is to figure out what kind of insurance your landlord has. They’re required by law to have insurance on their building, but it won’t cover your stuff. It also probably won’t take care of any damage from water backup or appliance-related incidents. Ask your landlord for their renters policy to see what part you’ll need to handle.
2. Create an inventory.
Next, go through your place and record what you own. Estimate how much coverage you’ll need to replace everything. Group your stuff into things like electronics and appliances, furniture, clothes and shoes, jewelry, soft furnishings and so on. Then, tackle any special items like that fancy exercise machine or expensive bicycle. For higher-end items, you may want to purchase something called floater insurance. This protects larger assets like art or antiques.
Take video and pictures of your stuff. Write down brands, models and serial numbers if you know them. Save receipts for big ticket items if you can. Keep all this in a safe place or on a spreadsheet on an external cloud drive. One last tip: The cost to replace your items will probably be based on their current value (unless you get replacement cost insurance), not what you paid for them at the time (depreciation sucks, we know).
3. Research renters insurance policies.
No one likes homework. But this kind will pay off if something ever happened to your place. Do your research on renters insurance policies to get a feel for what’s covered and what isn’t. This will help later when it comes time to shop around.
There are two different kinds of renters insurance: replacement cost and actual cash value. Replacement cost is a little more expensive since it pays the full amount to replace your belongings. Actual cash value is cheaper because it only covers what your stuff was worth when it was damaged.
4. Consider your liabilities.
Think about any extra liability coverage you might need. If you’re a smoker or have pets, you might want to increase your liability. You’ll be asked about these because both can affect your premium. Also, consider how often you have company in your home—whether you host a book club or just plain old parties! These kinds of things could affect your liability needs. This is because the more people you have over, the higher chance there is that there will be an accident. And if you think you’ll need more than the usual amount of liability coverage, check out umbrella insurance for extra protection.
5. Be ready to provide details.
Depending on where you live, you’ll be asked to answer these questions and more when it comes time to get a quote:
- What’s your full address and type of residence?
- Does your home have a smoke alarm, carbon monoxide detector, sprinkler system and security alarm?
- Is your home powered by electricity, gas or both?
- What floor do you live on if you’re in an apartment building?
- Who lives with you?
- Does your front door have a deadbolt?
If you don’t know the answers to these questions, you can reach out to your landlord. Provide as much detail as possible to get the best rate.
How Much Does Renters Insurance Cost?
Now that you know how to get renters insurance, how much does it cost?
Renters insurance premiums vary depending on how much coverage you want and the type of place you live in. The average person pays around $15 to $30 a month.2 The average annual premium is $179—less than what many of your possessions are probably worth.3
If you’ve estimated your personal property coverage to be $100,000, for example, you’ll pay more in premiums than compared to having just $25,000 of coverage. And opting for replacement cost coverage instead of actual cash value will also increase your premium. Increasing your liability limit will also bump up your premium a bit.
If you wanted to bring your premium down, you could raise your deductible. (Your deductible is the amount you have to pay before your insurance company will start ponying up.) A higher deductible means you’ll pay less in monthly premiums but more out of pocket when you make a claim. It’s definitely worth raising your deductible if you can afford it. Raising it from $250 to $500 can bring down your premiums.
You can also sometimes get discounts if you install things like burglar alarms or deadbolt locks.
Keep in mind that even the higher end of a renters insurance premium is less over the course of a year when you compare it to replacing a damaged or stolen laptop or TV. And you don’t have to lose everything at once to be able to file a claim.
Is Renters Insurance Worth It?
Renters insurance is a great deal and it’s absolutely worth it. It’s affordable and offers excellent protection for your things. And as the number of renters increases across the country due to the unprecedented housing market, more people will need renters insurance. (If you don’t want to rent the rest of your life, check out these tips to get your finances on track.)
Without renters insurance, you’d have to drain your savings or go into debt to replace your things—not to mention you’d have to pay to cover your own liability if someone makes a claim against you due to an accident or dog bite in your home.
Think about it. You’re protecting your personal computer, TV, favorite armchair, those early hardback editions of Harry Potter you collected years ago and that pair of shoes you love more than you should and just can’t find anywhere anymore.
When you total how much these things are worth in dollars and cents, and how much they’re sentimentally worth to you, it’s more than the premium and then some. That’s why renters insurance is something all renters should have.
Get Coverage Today!
We saw how to buy renters insurance. If you’re ready to get started, you could go online and start gathering quotes yourself. Or you could work with an independent insurance agent to help you get the best policy.
Our Endorsed Local Providers (ELPs) know the insurance market inside out and can help you find a policy that gives you the same or more coverage than the one you found online and for a similar cost or less in premiums. They’re RamseyTrusted and can advise you on coverage you’ve forgotten to include or discounts you’re eligible for—like bundling renters insurance with your auto insurance.
Bottom line? Independent agents can scan many more insurance companies, saving you time and possibly money.