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Your Guide to Renters Insurance in 2021

For some people, renters insurance, also referred to as tenant insuarnce, might seem like an unnecessary expense. After all, if you don’t own your home, why spend the extra money each month?

The truth is, there are plenty of reasons why you should make renters insurance a priority. If you want protection in the face of a natural disaster, robbery, or temporary displacement from your home, renters insurance is a critical way to protect not only your possessions, but your financial security, too. Here is everything you need to know about renters insurance—how it works, what it covers (and doesn’t), and what it typically costs.

What is Renters Insurance?

Renters insurance is a surprisingly affordable way to protect your personal belongings when you’re living in an apartment, house, or condo that you don’t own. It’s your guarantee that no matter what happens—whether a neighbor falls asleep with a lit cigarette and causes a fire, or someone breaks into your home—all of your personal property will be covered. 

You might not think renters insurance is worth it if you’ll only be renting for a short time or if you don’t own many possessions of great value. But because renters insurance is so affordable, it makes much more financial sense to invest in a policy rather than replacing everything you own in the event of a disaster.

Even though your landlord has his own insurance policy you will need specific renter insurance that will protect against fire, theft, water damage and lost or damaged belongings including electronics, furniture, clothes, etc. It works in the same way as homeowners insurance in that it can also have protection against liability – if someone gets injured on your rented property your renters insurance will answer to that. In some cases, rental insurance will cover damages for lost items from your car as well.

What Does Renters Insurance Cover?

For renters, disaster comes in many forms. It can be weather-related damage, vandalism, or even a lawsuit from someone who was injured while in your home. Fortunately, renters insurance has got you covered throughout any of those situations. Most renters insurance policies cover three basic components of personal possessions, liability, and additional living expenses. Here’s an up-close look at what each of these types of renters insurance cover:

Personal Posessions:

Personal posession tenant insurance coverage protects everything you own in your rented home in the event of a catastrophe, including: clothing, furniture, electronics, and other valuables, up to the limit of your policy. Damage or losses to personal property most often occur from events such as:

  • Fire
  • Plumbing and electrical malfunctions
  • Theft
  • Vandalism
  • Certain weather-related damage: hail, lightning, and windstorms
  • Explosions
  • Damage caused by aircraft or vehicle

Liability Insurance:

Liability tenant insurance is a type of coverage that protects you in the event that a guest is injured while at your home. If you, your family, or your pets are found responsible, liability coverage will pay up to the policy limit, including medical payments and lawsuits.

Additional Living Expenses:

If you need to leave your rental home because of damage or destruction, this type of coverage will pay for the costs you will face until your home is repaired or habitable. This includes expenses such as hotel bills or rental home charges, as well as food and other costs you would not normally face.

What is Not Covered by Renters Insurance?

Despite the fact that renters insurance is a wise financial move that offers peace of mind, it’s important to know that it doesn't cover everything. Here’s what renter's insurance will not cover:

  • Certain natural disasters: Do you live in an area that’s prone to floods, earthquakes, or sinkholes? Renters insurance usually will not cover damage of your personal property during these natural disasters. 
  • Pest damage: If you’ve got an infestation of rodents and bugs, they can really do a number on your personal property.  Unfortunately, renters insurance will not cover any damage done by these creatures, or services from an exterminator.
  • Undocumented items: When you file an insurance claim, you’ll be asked to provide proof of your property. Therefore, if you can’t prove the value of your items (or that you own them), with photos and/or receipts, they may not be covered.

How Much Does Renters Insurance Cost?

Because it only covers what’s inside your home, rather than the structure itself, renters insurance is one of the most affordable types of insurance you can buy.

According to the National Association of Insurance Commissioners, an average renters insurance policy costs between $15 and $30 a month. The specific amount you will be required to pay will depend on where you live, as well as your coverage and deductible amounts, but an insurance agent will be able to provide several options with a range of coverage and premiums to best suit your needs. 

Curious about how you can save on your monthly premium? Most insurance companies offer discounts if you bundle your renters insurance with other policies, such as your auto insurance. And if you’re looking to lower the cost of your rate even more, you can consider raising your deductible (the amount you’re required to pay before an insurer will cover any expenses). After all, the higher your deductible, the cheaper your premium. However, when you’re choosing a deductible amount, consider how much you’ll be able to pay out of pocket in the event of an emergency. Remember, you’ll pay the deductible each time you file a claim, and your rate is likely to increase after each claim, so weigh this decision carefully

Everyone has a budget and personal financial situation. As consumers, we are always on the lookout for the best option with the least amount of limits that won’t break the bank.  With rental insurance, you want cheap renters insurance but at the same time you want those special belongings to be fully protected and you want to have proper cover for liability and damage. 

What will influence the premium that I have to pay? There are many factors that determine the cost of your renter’s insurance – including:

  • The amount of coverage you need/want will obviously influence the cost.  Most advisors will lean towards what is known as a fixed replacement cost – this total will be the amount needed to cover everything in the event of serious damage like a fire. 
  • Replacement cost. If this cover is chosen and added to your policy then your premium will be higher – but the advantage is that in the case of a total loss you will be completely reserved covered for the specified amount.
  • The deductible is the amount of money you have to personally pay in the case of a claim before the insurance company starts to payout. It will influence the cost of the policy a lot. The lower your deductible the more your premium will be.
  • Insurance services companies weigh up all the risks involved with insuring you or your property. Things like location, age of the building or security devices installed will increase or decrease your policy.

One thing is for sure that you should shop around before signing a policy – prices vary and offers to vary.  Be careful about trying to save money by undervaluing your belongings – in the event of a claim you would be short – or overestimating the value as this will increase your premium.

The best advice for affordable renters insurance is to put your trust in a reputable company and get advice on what policy best suits your needs. At InsuranceQuotes.com we have a large team of highly qualified experts who know every nuance of every insurance policy in the land. 

Don’t take risks when it comes to protecting yourself, your rights, your home, and your belongings. Call us now for information on how we can help you or go online to request cheap rental insurance today!

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Is Renters Insurance Mandatory by Law?

Renters insurance is not legally required. However, some landlords may require proof of renters insurance before you sign a lease, or within a certain time period. 

Regardless of your landlord’s rules, renters insurance just makes sense. After all, the value of the average renter's belongings begins at $20,000. In the event of a disaster or home theft, could you cover the costs of replacing all your possessions? 

Would you be able to afford the expenses of being displaced, or the medical bills for someone injured in your home? Any of these situations could be financially devastating—which is why the low rates of renters insurance make it an affordable and smart investment. 

Low Rates for Renters Insurance Are Just a Click Away

Now that you know how important renters insurance is for your financial future, it’s time to get covered. We’re here to make that process as quick and simple as possible. Get fast and free renteters insurance quotes today and find out how much you can save on tenant insurance every month.

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Laura Adams is a personal finance expert, award-winning author, and consumer advocate. As Senior Insurance Analyst, she represents insuranceQuotes in the media and works to make sure consumers protect their financial futures by having the right kinds of insurance.

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