Ballpark Estimate: Between $10 and $25 a month
If you rent an apartment or house instead of owning it, you may think you don’t need any property insurance. But in fact, while you don’t own your setting, you still probably own all of the furniture, artwork and clothes inside. Therefore, it’s smart of be prepared for an emergency by taking out a renter’s insurance policy to cover these and other personal belongings.
Protect Yourself With Renter’s Insurance
While your landlord’s insurance will cover the building structure itself, you are responsible for the items inside, as well as for any injuries that occur on your premise. That’s where renter’s insurance comes in very handy. It will protect your items in the case of a fire, robbery or other calamity that causes loss or damage to your things.
It will also cover you in the event someone files a liability suit against you to pay for his or her medical bills. (Just note that it won’t cover your own medical bills.)
There are different levels of renter’s insurance coverage from which to select, depending on your needs, your goals and where you live. Keep in mind that some areas are higher risk and therefore will be more expensive for coverage. The type of building in which you live, your proximity to a fire station and the type of security you have against theft and fire will also affect the type of coverage and premiums you’ll get. If you’ve experienced a loss or multiple losses in the past, this will also impact your bottom line as well.
Renter’s insurance should cover your personal property such as clothing and furniture, electronics, appliances, jewelry and more. However, some policies have limits on certain items (such as jewelry and business equipment) when it comes to how much you can be reimbursed. Therefore, to protect the value of special, or particularly expensive, items you’ll want to buy additional coverage to make up the difference.
Type of Damage
Renter’s insurance policies typically cause damage caused in a number of ways, including the following:
- Fire, smoke or explosions
- The heaviness of snow, sleet and ice
- Accidents with the heating, cooling or plumbing system
- Wind or hail storm
- Theft or vandalism
- Frozen pipes
Note that most policies have some exclusions, which include flooding, earthquakes, certain types of water damage, landslides and nuclear accidents.
Amount of Coverage
How much personal property coverage do you need to have? A lot depends on what and how much you own. You can talk to an insurance agent and provide a list of your furniture, appliances and some of your prized possessions to determine how much coverage you need to be safe should an accident occur.
Alternative Living Accommodations
In addition to replacing the property caused in such events, renter’s insurance may also give you a settlement if your home or apartment becomes unlivable. You may also be reimbursed for extra living expenses that go beyond your normal daily needs (such as the cost to stay in a hotel, etc.) for a period of time until you can return to your home setting. This can be a very valuable benefit in an emergency.
There are also some extra things you can add on to a standard policy to give you more protection. For instance, you can also add earthquake and flooding insurance (both are excluded under basic plans). You can also increase the coverage you have for jewelry, antiques, artwork, collectibles and other particularly valuable items, and can also raise the amount for business property and personal and business liability.
If you’ve ever made an insurance claim, you’re probably all too familiar with the deductibles that you have. A deductible is really just the amount that you’ll need to pay out of your own pocket before the insurance kicks in. Generally, policies start with $500 deductibles and can go on about $2,000. The higher the deductible, the lower the overall premium costs, so when selecting a policy, you’ll need to decide whether you want to spend more up front or in the event that you do have a claim, get more back in your reimbursement, or if you prefer to save the additional monthly costs and simply pay more out of pocket in the event that something occurs.
When looking for a renter insurance policy, you should collect a few quotes so you can see your option. Just make sure that the provisions are equal when it comes to amount of coverage and deductible so you’ll be comparing the same thing.
You can do a search online to find links to insurance providers and request quotes. Some of the popular insurers include Allstate, Geico, Liberty Mutual, State Farm Insurance and Travelers. You find out more about purchasing insurance in your state through the National Association of Insurance Commissioners. This can be important because the laws on renter’s insurance vary a great deal from state to state so you’ll want to find out what the requirements are for your specific situation.
You can also find a number of web-based services that make it easy for you to apply for quotes from multiple insurers right from your computer. Some of these include Insure Me.
If you prefer personal contact, you can usually call to request a quote from individual insurance companies or you go with a third party insurance agent/broker who can explore your options and recommend a good fit for you.
You may also talk to the insurance company that has your auto insurance to see if they offer renter’s insurance as well. Some companies will provide a small discount if you purchase several plans through them. The drawback, though, for using the same company for your car and home is that if you have a claim on either account, it could later be held against you. For this reason, some people prefer to keep their car and home insurance completely separate.
The experts recommend doing your homework in advance to make it as easy as possible to talk to different insurance agents and request a quote for your apartment or rented home. To this end, it’s a good idea to walk through your home and make a detailed list of all of our possessions. You can also take pictures of the rooms, and include close ups of some of the more valuable items. Some people prefer to make a video recording of their rooms, so they’ll be able to remember exactly what they have without having to itemize each thing.
Remember to repeat the process every few years so you’ll have a reasonably updated list or images of any new belongings. You should also make sure to store your information off of your premise so if damage occurs, it won’t be affected. Most people use a safe deposit box for this purpose.
What It Costs
The good news is that a basic renter’s insurance policy will probably cost less than you would expect. In fact, the price for a renter’s insurance plan can start as low as $10 a month (which comes out to just $2.50 a week). This means that for far less than your coffee habit, you can protect yourself and your property against all sort of unexpected damage and loss. On the higher end, you can expect to pay as much as about $25 a month for higher coverage, which is still very inexpensive.
To give you a more specific idea of how the cost might work, consider a few scenarios. For instance, a person renting a single-family home in Fairfield County, Conn. with five rooms and about $55,000 of personal property would pay about $225 a year (less than $20 a month) for a policy with a $500 deductible that includes $100,000 of personal liability and $10,000 of medical payments to others if needed.
An apartment renter in San Rafael, Calif., who wants to insure $20,000 of personal property with a $1,000 deductible and have $100,000 of personal liability and $10,000 of medical coverage for others would pay about $140 a year, or less than $12 a month.
State Farm Insurance has an online calculator that can walk you through the questions to determine what you might pay for your specific situation.
In general, basic renter’s insurance can range from $10 to $25 a month, or $100 to about $300 a year.
If you think this sounds very reasonable but you still don’t think you’ll ever really need the insurance, consider this: data from the Bureau of Justice Statistics reveals that people who rent their dwellings are at increased risk for being robbed than people who own their homes. In addition, the risk of fire and personal injury also looms large, no matter where you live. Therefore, it’s always wise to think ahead and make the small investment so you’ll be protected.