Your landlord might ask you to purchase renters insurance if you are renting a property. The landlord’s insurance policy covers only damages to the structure that you live in and not your personal possessions.
Even if your landlord doesn’t require it, you might want to purchase renters insurance. Renters insurance will cover you for any loss, damage, or theft of personal property. You also have protection if someone is injured in your rental.
Renters insurance is usually a very affordable monthly expense. However, you might be curious about how much coverage you will need to make it worthwhile. There are standard coverages. However, you may be able to add ons depending on the circumstances or items that you need financial assistance. These factors can help you determine how much renters insurance you require.
What is the cost of renters insurance?
The latest data from the Insurance Information Institute (Triple-I), shows that the average renters insurance cost is $179 per annum, or approximately $15 per month.
How much renters insurance costs?
Based on the policies issued in this year, the national average monthly renters insurance cost is $42 per month. However, there are many factors that will determine the price of your renters insurance policy. Consider these:
- ZIP code
- Credit score
- Home inventory
- Size of the rental
- Actual cash value (ACV vs. replacement costs value (RCV).
- Fire and security systems
- Get Discounts
Other factors could also impact your rate such as which insurer you choose or how much liability you select. These factors can be taken into account to help you get personalized rates.
Renters insurance: Is it worth it?
What does renters’ insurance cover? Is it worth the price? Personal liability protection is typically included to cover attorney fees, damages and medical treatment for anyone who is injured in your condo, apartment, or rented home. Most likely, the liability protection will include no-fault coverage. This means that if someone gets hurt in your home, apartment or condo they can submit their medical bills to your insurance company. You can avoid a lawsuit.
Your personal belongings are also covered by renters insurance if they are destroyed or stolen in a covered natural catastrophe. You may be reimbursed for items you lose or are stolen from your vehicle while you are away.
Although some may think that personal belongings aren’t worth the extra monthly expense, it is worth considering the cost of replacing damaged items in an unplanned situation. For example, you might have a small wardrobe with few decorative items but theft could result in your home office being set up between your TV and electronic devices. Insurance experts recommend that you insure your personal property. Additional living expenses are covered by renters insurance in the event of a fire, earthquake, flood, or other calamity that renders your rental unlivable.
What amount of renters insurance do you need?
Experts recommend that you have enough renters insurance to cover all your personal belongings in the event of theft, loss, or damage.
It is a good idea to make a list of all your possessions, or inventory. Include dates of purchase, serial numbers and appraisal documents. You can take photos with your smartphone or another app and save it so you can add to your inventory if you purchase new items. All expensive electronics and devices should be included, including home security systems, jewelry and instruments, as well as appliances and computers. You can use the internet to determine the cost of replacing those items. Then, you can decide how much renters insurance coverage is necessary.
All tenants who have pets need to purchase liability insurance to protect their property from damage by their pets. Additional liability insurance may be required if you own a large dog, or a breed of dog that has more specific requirements than your insurance company.
How can I calculate my renters insurance coverage
Determine your desired deductible
Renters insurance is a cost-effective way to determine the cost. The deductible is the amount you have to pay before your insurance company will pay you for any claims you file. The deductible is simply the amount that you “deduct” from the loss at the time that it is filed.
If you agree to a $500 deductible for renters insurance, and you file a claim for flooding damage you will need to pay $500 before the insurance company will cover the rest. The deductible can be found on your insurance policy.
Decide whether you want to purchase additional coverage
If you are involved in a lawsuit or are affected by a natural disaster, you can verify that your personal and financial possessions are adequately covered. An umbrella policy can be purchased if you don’t feel you have adequate coverage under your renters insurance. An umbrella policy is additional liability insurance that covers you if you exceed the limits on your auto or renters insurance policies. It also covers you in the event of libel or slander.
Travelers can get off-premises coverage
It might be worth checking if your off-premises coverage covers possessions such as laptops and cell phones that you bring with you on vacation. This will provide you with the same coverage you would have if they were at home.
You might consider adding a floater
You should consider adding a renters policy floater if you own expensive items, or collectibles such as sports memorabilia, original art, antiques, jewelry, or furs. You can add a floater to your renters policy to provide additional protection for expensive items in the event they are lost, stolen, or damaged.
For additional coverage for living expenses, double-check your policy
You should make sure your policy covers additional living expenses (ALE) if you live in an area prone to natural disasters such as fires, floods and earthquakes. Additional living expenses can include the cost of a hotel or eating out at restaurants, as well as other costs associated with renting a home while repairs are being made.
Although they will cover the difference between your regular living expenses as well as your additional living expenses if you are displaced by a covered event that causes an emergency, this coverage may be limited. Make sure to read the fine print and make sure you are adequately covered for any future disasters. You should also check that your insurance covers floods as not all policies will cover this type of natural catastrophe. Flood damage is typically excluded from standard renters insurance policies. However, you can purchase flood insurance directly through your provider or from the National Flood Insurance Program.