How To Get Renters Insurance (2024 Guide)
Learn how to get a renters insurance policy with liability and personal property coverage in just a few hours.
Having a renters insurance policy is often required by your landlord. But even if it isn’t, it’s a valuable tool that could provide you with hundreds of thousands of dollars worth of protection against covered perils. On average, renters insurance costs $180 per year, or $15 per month, according to data obtained from Quadrant Information Services. If you’re looking to protect your financial interests as a renter, signing up for a renters insurance policy is fairly straightforward. Let’s walk through everything you need to know about how to get renters insurance.
Researching and Comparing Insurance Carriers
Before choosing a renters insurance company, research and request quotes from at least three different providers to see which one can offer you the coverage you’re looking for at the best price. Specific steps to take include:
- Read customer reviews: Reading customer reviews helps you gain valuable insights into what it’s like to work with a particular renters insurance carrier. Websites like Consumer Affairs, Trustpilot, and the Better Business Bureau (BBB) can shed light on the level of customer satisfaction, the insurer’s responsiveness to claims, and the overall quality of service. Checking J.D. Power ratings can also give you an idea of how well an insurance company performs in terms of customer service, policy offerings, and claims processing.
- Check complaints (NAIC Complaint Index): The National Association of Insurance Commissioners (NAIC) complaint index provides a numerical representation of customer complaints against an insurance company. A lower complaint index indicates a better track record of customer satisfaction.
- Evaluate financial strength: You can turn to AM Best, a reputable credit rating agency that assesses the financial strength and stability of insurance companies, to get an idea of how financially strong an insurer is. Choosing a carrier with a high financial strength rating ensures they have the financial capacity to fulfill their obligations — especially when it comes to paying out claims.
- Explore available discounts: Different insurance carriers offer various discounts that can significantly impact the cost of your renters insurance. Look for discounts such as multi-policy (bundling with auto insurance), safety features (security systems, smoke detectors), and loyalty discounts.
- Compare costs: Comparing the premiums of multiple renters insurance providers is essential. Obtain quotes from at least three carriers and consider the value you’re getting for the price.
- Assess the online experience: Take some time to evaluate the insurer’s website for user-friendliness, the availability of online tools and resources, and the ease of accessing policy information or filing claims online.
Selecting the Right Coverage
Finding a policy that has the right coverage for your needs is essential. That way, your belongings will be adequately protected in a covered event. Having key information at hand such as property details and a personal inventory of your belongings can make shopping for the ideal amount of coverage easier.
Personal Property
Your renters insurance policy will include personal property coverage and typical coverage amounts ranging from $10,000 to $100,000. To calculate how much personal property coverage you need to purchase, conduct a thorough inventory of your belongings and estimate their total value. Consider belongings like furniture, electronics, clothing, and any other valuable items to ensure your coverage adequately protects against potential losses.
Liability
Renters insurance also commonly provides liability coverage ranging from $100,000 to $500,000. You can calculate your liability coverage needs by assessing potential risks. Take key factors like the presence of pets, the likelihood of guests, and any potential liability incidents into consideration when determining your desired coverage amount.
Loss of Use
How much loss of use coverage you need depends on your personal property limit. Coverage for loss of use typically ranges from 20% to 30% of your personal property coverage limit. However, to get a more accurate idea of your coverage needs, estimate potential expenses for temporary lodging, meals, and transportation in the event your rental becomes uninhabitable. You can tailor this coverage based on your specific living arrangements and potential additional living expenses.
Medical Payments to Others
“Med Pay, which is our industry lingo, is usually limited to $10,000 on most renter’s policies,” Bonnie J. Walker, AIC, CLX Technical Lead, Property at Lemonade explains. This coverage is for an injury that may have occurred in your rental property but that you were not at fault for. It will only cover the medical expenses for a third party that is not on the insurance policy or a relative of the insured. If the policyholder is negligent in any way, the medical expenses will carry over to the insured’s liability policy, which usually has a coverage limit of $100,000. Worried that you may need more insurance? Most carriers will also sell an umbrella policy for amounts over and above your normal policy limits.
Endorsement Options
In addition to your base renters insurance policy, you can also purchase endorsements or add-ons to give yourself more thorough coverage. You may want to consider additional endorsements based on your circumstances, such as valuable personal property coverage for high-value items, identity theft coverage for enhanced security, or replacement cost coverage that covers the full cost of replacing items without depreciation.
According to Walker, the most important endorsement by far covers you for the replacement cost of your belongings. “A standard policy only provides coverage for the actual cash value of your items and not the full replacement cost, leaving policyholders wondering why they took out a policy in the first place,” Walker shares, “Don’t let this happen to you and be sure to follow up on these additional endorsements as well: water back-up, identity theft, scheduled personal property, additional liability coverage, earthquake coverage, extra computer coverage, and musical equipment coverage.”
Understanding the Cost of Renters Insurance
According to data from Quadrant Information Services, the national average cost of renters insurance is $180 per year, or $15 per month. However, to truly understand the cost of renters insurance, you need to consider several factors that impact the premium, such as your location, coverage amount, deductible, and the type of coverage selected. Factors such as a poor credit history, living in a high-risk location prone to natural disasters, or owning certain breeds of pets can result in higher premiums. Renters with these characteristics can benefit from shopping around to find both a favorable price and comprehensive coverage.
Average Cost of Renters Insurance by State
Your location plays a major role in the price you’ll end up paying for renters insurance. Take a look at these state averages to better understand what your premium price might look like.
How To Lower the Cost of Renters Insurance
There are steps you can take to help lower the cost of your renters insurance policy.
- Bundle policies: If possible, combine your renters insurance with other policies the provider offers (like auto insurance). Bundling policies often results in a discount.
- Comparison shop: Obtain quotes from at least three insurance providers to compare rates and coverage options.
- Increase your deductibles: Choosing a higher deductible can lower your premium, but make sure you can afford the deductible if you ever do need to file a claim.
- Maintain good credit: In many states, having a solid credit history can positively influence insurance premiums.
If you are looking for a high quality cheap renters insurance option, consider our top pick which averages just $13 per month.
Obtaining Quotes From Providers
Requesting more than one quote for renters insurance is the best way to make sure you’re getting the amount of coverage you need for the lowest price. When you request quotes, reach out to at least three providers and do so for the same amounts and types of coverage. Also, keep factors like customer service experience and claims processes top of mind to make sure you find the right fit.
Signing Up For Renters Insurance
Once you find a renters insurance provider you want to work with, you’ll apply to purchase a policy and have the option to initiate your policy or obtain a bindable quote. A bindable quote is a formal insurance quote that’s considered legally binding, meaning the insurer commits to providing coverage under the terms outlined in the quote if the applicant chooses to accept it. Unlike a standard insurance quote, a bindable quote is more definitive and can be accepted by the policyholder to initiate coverage immediately. Accepting a bindable quote often involves providing additional information, completing the necessary paperwork, and, in some cases, making an initial premium payment. It signifies a more advanced stage in the insurance application process, indicating the intention to proceed with the offered coverage.
If you approve of the premium price offered to you, you will move forward and activate your policy. This is typically done by making your first payment and establishing what your payment method will be going forward. At this stage, you can set up automatic payments if you choose to do so.
Upon completing the activation process, some insurance providers may grant immediate coverage, allowing your policy to go into effect almost instantly. However, you need to review the policy documents to confirm the effective date. While you may be able to complete this entire process online, some renters insurance providers may require you to obtain a bindable quote and establish coverage over the phone.
Confirming Documentation With Your Property Manager
Many landlords or property management companies require renters to provide proof of an active renters insurance policy. You can mark a landlord as an interested party on your insurance policy, which will give them access to certain information about your renters insurance policy like its active status and coverage details. When you’re ready to move, don’t forget to update who the interested party should be if you plan to maintain your renters insurance coverage.
Frequently Asked Questions About Getting Renters Insurance
What is the average cost of renters insurance?
According to data obtained from Quadrant Information Services, you can expect to spend $180 per year, or $15 per month, to secure renters insurance coverage.
Is renters insurance legally required?
Renters insurance is not a legal requirement but it may be something your landlord requires if you want to rent their property.
How important is renters insurance?
Renters insurance is extremely important to renters who want to fully protect themselves financially. This insurance type can help cover the costs of replacing stolen, damaged, or lost personal belongings, and provides liability coverages that can step in to cover legal fees or other expenses you may be liable for.
Does renters insurance increase after a claim?
Renters insurance may increase after a claim, but all insurance providers have a unique process for determining premium amounts. Speak with your insurance provider to get a better idea of how much your premium might increase, if at all, after a claim.
