Modified:2022-09-15  Published:2022-09-15  Views: 304
Author: editor
Published in: Insurance
What Is Renters Insurance And Why Should You Purchase It?

Renters insurance is a specifically designed insurance policy that meets the necessities of the tenants. When you are a tenant, you will not be eligible to purchase a homeowner insurance. On the other hand, your landlord’s homeowners insurance policy will not be covering your personal belongings. Therefore, if there is a peril or fire or theft, you will not be able to protect your personal belongings. And this is why you should consider purchasing a renters insurance policy to protect your personal belongs from unexpected events. However, not everyone is aware of the beneficial existence of this insurance, and this is what has made us prepare this article by incorporating accurate information regarding this.

What is renters insurance?

This insurance is an akin factor to the homeowners insurance that covers for the personal property of a renter in the case of any peril, fire, theft, vandalism electrical malfunction, plumbing and more. It also aids when there is a liability claim including injuries that take place in your rental space but not due to any structural problem. This insurance is capable of protecting any apartment, studio apartment, home or mobile home. If you are temporarily residing at a place and you own some expensive personal belongings, then purchasing this insurance is certainly a smart choice for you.

Coverage options of renters insurance

The coverage options of this insurance policy usually depend on the insurance providers and the amount and type of belongings that you possess. However, there are some of the standard coverage options to be same for most of the insurance providing companies. These common coverage options are presented below,

Personal property coverage

  • Just as the name suggests personal property coverage covers all of your personal properties that you own. This includes your clothes, dishes, pots, furniture, jewelry, rugs and more.
  • Personal property coverage covers you from falling objects, fire, theft, vandalism, smoke, explosions, weight of snow and ice.
  • A policy limit needs to be chosen by you. This limit defines the maximum amount that will be covered by your insurance policy for any damage or theft of your personal belonging. For an example, if you choose a $50,000 in coverage limit then your insurance provider will cover all the damages that comes under the mentioned amount.
  • You can choose between two types of coverage options, the first one is replacement cost coverage. Replacement cost coverage is an expensive option, but it will have you covered in a better way. You will get replacement of your damaged products. For example, if your mobile phone is stolen somehow then you will get full cost that you will be needing for your replacement in today’s retail price. The second option is actual cash value, also known as ACV. ACV is less expensive and provides you with the cash value of the damaged product. For example, if your mobile phone is two years older then the company will pay you the two years older cost. Replacement cost coverage is certainly a better option than ACV.
  • Some of the items can have “special limits” implemented by the insurance companies. These limits are mostly implemented on jewelry items and can be inconvenient. If your stolen ring costs $5,000 and your special limit ends on $1,000, then it will certainly not be able to reimburse you for your lost.
  • For some of the items you might need to “schedule” those for gaining the full or sufficient coverage for your stolen item. Scheduling the item will be helping you receiving at least the nearing value of the stolen item.

Liability coverage

  • Unlike the common misunderstanding of the coverage options of this insurance, it does not only provide property coverage but also liability coverage options.
  • This coverage protects your liability when someone gets injured in your rental space. It pays for the medical fees of the injured and pays any needed legal fees if they sue you.
  • You can also use your liability coverage options when your pets harm someone.
  • The typical renters insurance policy provides a liability coverage worth of $100,000. However, you can increase the limit based on your preferences.

Medical payment coverage

Medical payment coverage covers the medical fees of a third-party that gets injured at your rental space, regardless of fault. This coverage amount is small and only capable of paying for small injuries. This coverage usually starts at $1,000.

Additional living coverage

Additional living coverage pays for the extra expense that you have to bear when you cannot live at your rental space due to an issue covered by the policy. These coverages pay for hotel bills, costs of meals, pet boarding fees and more. You need to save all the receipts for making a claim. These coverages are also referred as the “loss of use” coverage.

renters insurance policy

Factors out of coverage options

  • The building that you have rented is not covered by the insurance policy.
  • Accidents happened in a common space will not be covered by this insurance policy. It will come under the landlord’s homeowners insurance policy.
  • The standard renters insurance policy does not cover your roommates possession.
  • Flood, earthquake and mudslides are excluded from the standard coverage option, but you can still purchase those as additional coverage options or coverage add-on.

Importance of a renters insurance policy

Insurance policy for renters may not seem something really mandatory, neither there are any legal obligations. However, it is still recommended for the renters to purchase this insurance policy to protect their personal belongings from any kind of unannounced and unexpected events. The importance of purchasing this insurance policy is discussed below,

  • If you are living in a rented space, then your landlord’s policy will not be covering your belongings. So, if there is a fire at the house, your belongings will be damaged, and you will not be able to protect those or gain a replacement under any circumstances. Owning this insurance policy will save you in this scenario. The insurance policy will secure your personal belongings and will replace the most important ones in the case of any damage.
  • Some of you may own high-value items, such as expensive musical items or art collection or expensive art supplies. If there is any event associated with theft or vandalism and your high-value items get stolen, then it will be a huge loss to you. However, with the help of a renters insurance you can get a pay back for all the stolen items. You can even get replacement costs and replace your stolen items with a new one.
  • Accidents are inevitable, anyone can visit your rented space and get injured in the most unexpected ways. And when they do, you will have to take the liability of their medical treatment and in the worst possible scenarios, you can even be sued. Certainly, not all the property owners will be kind enough to help you out and even if they do, there will be a limit. So, you need an assistance that is only dedicated to you to get out of this crisis. This insurance is the best possible assistance that you can gain without having to face many difficulties.
  • With the help of a renters policy, you will be getting your needed assistance and security in the time of your need. It also helps you out with the legal proceedings associated with your rented space. Moreover, if you need to live at a different location due to any unlivable condition of your apartment then that expense also will be bared by the insurance policy.

Common discounts available for renters policy

Renters policy is available at a very affordable price, however, if you still want to cut down on your monthly or annual premium then you can opt for the common discounts that you can easily grab. The conditions and inclusions of the insurance policy are discussed below,

  • You can be eligible for a multi-policy discount if you have more than one policy from the same company. Such as, if you have an auto insurance and you have purchased this insurance from the same provider then you can bundle up your policies and save on both of the annual premiums.
  • If you have a clean claiming history as a renter, then you can gain a decent discount from your insurance provider.
  • Installing protective equipment, such as fire alarm, deadbolt locks, sprinkler etc. can help you in getting discounts as well.
  • You can also be eligible for miscellaneous discounts, such as for paperless billing, paying in full, enrolling for autopay and more.

house for rent

5 companies to purchase renters insurance

In this section there is an analysis on the top 5 companies to offer the best renters insurance policies in the US. Each of the company will be discussed based on the pros and cons associated with them. The companies are presented in an ascending manner.

1. USAA

Pros Cons
  • The company offers flood coverage in its standard coverage option, which will not be found in the coverage options for other companies.
  • USAA is available in all the 50 states of the USA.
  • The service is only limited to the members of military. Commoners are not able to gain the service of the company.
  • There is no option of covering the roommates.
 

 

USAA is one of the oldest companies in the US insurance industry. The company provides an unmatched insurance service to the military members (both retired and active). The affordable renter insurance services of the company start only from $132 per year, which is a quite ensuring protection under a very affordable cost. You can read our article on USAA Renters insurance for details of the company’s renters policies.

2. Lemonade

Pros Cons
  • The fast sign up and claiming process of the company is one of its competitive advantages.
  • Lemonade distributes a portion of its revenue to the charity of customers’ choice.
  • Might not be available in all of the states of the US.
  • There are not many options of working with an agent.
 

 

Lemonade is an insurance start-up that started its journey in the year of 2015. It manages all of its ventures in online space and offers the customers with a fast and secure sign-up and claim option. It is a peer-to-peer insurance provider, which pay out claims by saving the premiums that are paid by the customers. The average annual premium of Lemonade costs around $154.

3. Erie Insurance

Pros Cons
  • A competitive pricing available
  • An affordable replacement cost coverage is available as well.
  • Very few discounts available.
  • No online tools for purchase are available
 

 

Erie insurance is based in Erie, Pennsylvania. The company is mainly preferred for its auto and leisure insurance policies. However, the company’s renters and homeowners policies are also quite beneficial for the customers. The prices of Erie Insurance are quite affordable, and the quotes are easily available via 13,000 independent agents.

4. American Family  

Pros Cons
  • American Family offers a good number of discounts to its customers.
  • The coverage option for home-based business is available, which you will not be able to find in most of the insurance providers.
  • The company manages an agent only approach, which means there is no availability of online tools.
  • Not available in all of the states.
 

 

American Family is one of the most preferred insurance companies in all over the US. The life insurance policy of the company is quite popular. It manages an agent-only approach and lacks in online approaches. However, the cost of average annual premium of this insurance of the company can be quite affordable, which starts from $149.

5. State Farm  

Pros Cons
  • One of the most affordable insurance companies in the US.
  • The agent network that State Farm possess, is quite strong and extensive.
  • Discount options may vary based on states.
 

 

State Farm is the company to be mentioned in our article most of the times. Affordable insurance coverages along with effective customer service can only be found in the ventures of State Farm. The insurance policies of State Farm start only from $128, which is one of the lowest industry rates. The extensive agent network of the company helps the renters in finding their assistance very easily.

Conclusion

This article has an extensive discussion on renters insurance and the companies that offer the best insurance quotes in the US. There are other companies as well, such as Liberty Mutual, Nationwide, Allstate, Farmers etc. These can be good choices for purchasing insurance policies as well. However, it is recommended to consider expert advice before proceeding with purchase.

Resource list: -

For generating more information on this topic, you can visit the following pages.

US News

Forbes Advisor

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