Have you been looking for how to get renters insurance, then this article gives you a well-explained guide on how to get renters insurance. Read to know more.
Renters’ insurance is versatile. Whether you’re renting an entire house, a small studio apartment, or sharing a place with roommates, renters insurance covers a host of problems such as stolen items, guest injuries, and even hotel bills if you can’t live in your place because of an issue covered by the policy (like a fire).
Finding the best renters insurance often takes research, figuring out how much coverage you need, and getting quotes from multiple companies. Here are five steps to getting renters insurance:
- Understand what’s covered by renters insurance
- Determine coverage amounts
- Research renters insurance companies
- Compare renters insurance quotes
- Choose your policy
Step No. 1: Understand What’s Covered by Renter’s Insurance
What’s covered by renters insurance can generally be broken down into three main coverage types:
Personal property coverage. Think of all that stuff you have accumulated—furniture, clothes, kitchen items, jewelry, collectibles, and electronics. This coverage pays to repair or replace them if they are stolen or damaged by a problem covered by your policy, like a fire or tornado.
Many people underestimate how much stuff they own and dismiss renters insurance. If you lost all your belongings in a disaster, would you be able to buy all new property?
Liability insurance. This pays for injuries or property damage to others when you’re legally responsible. For example, liability insurance pays for medical bills if a guest injures themselves in your apartment. Liability insurance also pays for a legal defense in case you are sued because of an accident.
Additional living expenses (ALE). Sometimes called “loss of use,” ALE covers expenses like hotel bills, restaurant meals, and services such as pet boarding or laundry if you can’t live in your home because of damage due to a problem covered by the policy.
Renters’ insurance doesn’t cover damage to the actual building. That falls under your landlord’s insurance.
“When it comes to the items within your four walls, you’re responsible, because they belong to you,” says Yael Wissner-Levy, a spokesperson for Lemonade Insurance. She adds that for problems like fire, the landlord’s insurance will pay to repair the building but it won’t pay for your temporary living costs if you are displaced.
Step No. 2: Determine Coverage Amounts
The next step is to determine how much renters insurance you need. The best way to start this is by creating a home inventory.
A good home inventory will contain:
- A description of the item (or groups of items)
- Estimated value
- Purchase date
- Receipts and serial numbers (when possible)
You can use an app such as the National Association of Insurance Commissioners home inventory app (available in the App Store or Google Play).
Now that you have all of your stuff in a handy list, tally up the total estimated value, and you have a ballpark figure for how much personal property coverage you’ll need. A typical amount is $20,000 or $30,000, but you can buy more when needed.
American Family Insurance has a renters insurance calculator to help determine a coverage amount.
Liability coverage in a renters insurance policy will default to a standard amount such as $100,000. You can increase that amount, and you may want to in order to account for what could be taken from you in a lawsuit.
Coverage for additional living expenses will also have a default amount, such as 40% of your personal property coverage. With $30,000 of personal property coverage, that would be $12,000 for loss of use. Here, too, you can buy increased coverage.
Step No. 3: Research Renters Insurance Companies
Figure out which companies offer renters insurance policies in your state. A good place to start is your current car insurance company. You may benefit from a bundling discount when you buy both policies with the same insurance company.
But also look beyond your current insurance companies and don’t just focus on the big names with the humorous commercials. Check out the best renters insurance companies, which combine competitive prices with good customer service.
It’s also wise to research what insurance companies offer beyond the basic types of coverage. That way you can find the policy best matches what’s important to you. For example, Lemonade offers a pet damage endorsement that pays up to $500 above your security deposit for pet damage to the landlord’s property, so that could be a good choice for pet owners.
Or if getting the most out of any future claims checks is paramount, you might consider companies that offer a diminishing deductible. American Family is one—your deductible is decreased each year that you don’t file a renters insurance claim.
Step No. 4: Compare Renter’s Insurance Quotes
Once you get a list of renters insurance companies that you like, you want to get quotes.
Remember to get quotes for the same coverage level from each renters insurance company, so you can do an apples-to-apples comparison. Don’t forget to ask about discounts.
The easiest way to shop for renters insurance is to compare quotes from multiple insurance companies. You can get free quotes online or by calling an independent insurance agent.
Step No. 5: Choose a Company and Apply
Once you’ve figured out your desired coverage level and checked out quotes from multiple companies, you can choose the right renter’s insurance policy for you.
If price is the most important, you’ll likely go with the company with the lowest quotes. Or, you may value special coverages and perks more than price and go with a company that may cost a bit more but better matches your needs. You can apply for renters insurance at most insurance company websites.
Don’t make renters insurance shopping just a one-time thing. It’s wise to check quotes at least every few years to see if you’re still getting a good deal.