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Moving into a new apartment can be exciting and fun. Most people will think about how to decorate and furnish their new apartment without considering getting renters insurance. Renter’s insurance isn’t necessary, but you will need it badly at some point. This post will walk you through everything you need to know before getting renter’s insurance. Let’s dive in.
What is Renters Insurance?
Renters insurance is a coverage that helps insure renters living in an apartment. Renters insurance policy can be subdivided into personal property, liability, and other living expenses. Renters insurance, also known as tenant insurance, can help cover the unexpected perils, especially those you can’t prevent from happening, like theft or your visitors’ injury. That means that you can worry less if you have renters insurance in place if any of the above happens.
Who May Need Renters Insurance?
Even though everyone might need renters insurance cover, people with low incomes might need it more because of the financial frustrations they often have. For example, renters liability coverage can help eliminate the burden from someone without enough savings to cover the costs. Below are other people who might need renters insurance.
1. Renters Owning a Pet
Julianne has a furry friend, so she’s considering getting renters insurance to cover any dog bites. According to a report, the average spend on dog bites results in $32,072 in the United States. This is an amount that Julianne won’t be willing to remove out of pocket. It could severely hurt her finances if she doesn’t opt for renters insurance featuring a pet policy.
2. Wealthy Tenants
Quinn is a wealthy tenant living in Arizona. As much as she’s wealthy, she’s not comfortable pulling money out of pocket to cover liabilities, such as for fire damage (that coat was not cheap). That said, Quinn is now considering purchasing renters insurance that will help cover any liabilities, such as fire breakouts, theft, among other uncertainties.
3. Renters Pushed Out From Their Homes
Bobby is one of Mrs. Sonia’s most loyal tenants but was recently pushed out because of a fire, making his house inhabitable. And because Bobby did not have any renters insurance policy, he had to eat all the losses he had incurred directly out of pocket. Ouch! Because he doesn’t want to make the same mistake, he has decided to purchase renters insurance with a higher deductible.
4. Students Living off-Campus
Isabella is a campus student who decided to rent an apartment a few kilometers from school. She is still being supported by her parents and is still on their insurance. I don’t blame her, Isabella is living in a post COVID world. Isabella has now decided to purchase her own renters insurance to cover unexpected risks in her home away from home.
Factors to Consider When Purchasing Renters Insurance
1. What Does It Cover?
In the event of a loss after a deductible, renters insurance will come in handy to replace your possessions. The loss could be damage to your property, or even damage from burglary. Consult with your agent what is covered, so you know what types of damages are covered in your policy.
Policies incorporate some liabilities insurance that provides protection should someone in your apartment get injured. While you don’t want to be pessimistic as you move into your new house, it would be best to plan for such unforeseen circumstances for your financial stability.
Often, your premium will be cheaper if your apartment offers top-notch security. Similarly, the location and the number of units in your apartment will also determine your premiums. If your building is located in crime-prone areas and doesn’t have a security system, please talk to your landlord to install one and help reduce the tenants’ premium rates.
Living in states like Maine, Vermont, Minnesota, Utah, New Hampshire, and many other states considered safe will be advantageous. However, living in states with worse security like California will subject you to higher premium rates.
3. Does Your Lease Agreement Require You to Have a Renters Insurance?
Many landlords build apartments into the lease agreement prompting tenants to acquire a renters policy. These agreements will often offer coverage in the event of accidents that allow landlords to file a lawsuit for damages. While lawsuits are a rare occurrence, your liability will always come in handy to protect you anyway.
4. Building and Unit Size
James wants to move into a new apartment, but is thinking of first knowing how much renters insurance premiums he will be charged for either a smaller or larger room. Before renting an apartment, it would be best to consider the number of units in the building. Small buildings tend to offer a higher premium than larger buildings. So the larger the building, the lower the premium costs.
5. How Much Renters Insurance Will You Need?
Many renters fail to obtain adequate coverage in the event of a loss. While this seems like a deliberate action, some renters don’t know the value of their possessions and often overlook it to acquire minimum rates.
Mitchelle and Rachel are both living in one apartment, but different houses, who have decided to purchase renters insurance. Mitchelle has lots of expensive valuables, including silver wrist watches, and a large room space heater.
On the other hand, Rachel doesn’t have many expensive items, except that she has an Apple laptop. After calculating the value of their valuables, Mitchelle has decided to go for a higher liability policy to help cover all her expensive items while Rachel for a lower liability.
A deductible refers to the amount of money you will have to pay before your renters insurance policy takes effect. That means that the deductible you choose will either raise or lower your overall insurance premiums; a lower deductible gives you higher premiums while higher deductibles give you lower premiums.
Brandon is a wealthy businessman living in Washington with lots of valuables, such as gold jewelry. Brandon knows that he’s going to pay huge premium rates because of his expensive valuables. He has, therefore, decided to go for a higher deductible that will reduce the overall premium amount he will be paying.
7. Do You Have a Pet?
Joe has a pet and lives in Arkansas. Because his dear fido recently bit a visitor, he has decided to look for renters insurance with affordable liability coverages. Initially, Joe never thought about acquiring renters insurance.
There are many insurers, such as the American Family Insurance that opts to cover any liabilities resulting from pets. However, some insurance providers will ignore this kind of policy. That’s why you need to shop around and see those insurance providers that include liabilities resulting from pets before you can buy.
8. Do You Have a Car or Cars?
Most renters insurance policies will cover any loss of your belongings inside your car. However, this insurance policy will not take care of any physical damage resulting from a crime. For example, if someone has to break into your car by smashing your windows, renters insurance won’t cover the broken glass windows, but the items stolen inside the car. Therefore, consult your agent to check your auto insurance to make sure you are well-protected.
9. Rental Location
The area you reside in could either increase or lower your premiums. So it is better to choose a location without many claims in the past. For example, living in San Francisco could expose you to higher premiums because it is considered one of the areas with many claims. Depending on the location you live, make sure you research to see if it is known for a specific kind of uncertainties that could either raise or lower your deductibles.
10. The Value of What You Have
The value of what you own might also come in as a determinant of the liability coverage limit you will need. Gabrielle has expensive valuables like a costly laptop, a large room heater, or a bunch of gold rings. And because of this, she’s thinking of going for a higher liability coverage that would ensure all her belongings are covered.
The state you live in should determine how much liability coverage you are going to opt for because of high theft cases. According to Statista, South Carolina, Hawaii, and Alaska are the top three states leading with theft cases – 2,116.1, 2,093, and 2,066 rates respectively.
11. Fire Prevention
When looking for an apartment, you need to consider an apartment with a smoke detector and overhead sprinklers to guarantee your safety. If the apartment doesn’t include any of those, install them to avoid a premium spike. There are some states considered fire prone, such as California, Texas, Georgia. According to a report, the top three states leading in the number of fire cases include California with 8,194 cases, followed by Texas with 6,892, then North Carolina with 3,872 fire cases. You should, therefore expect to pay more premiums if you are going to reside in fire prone areas like the ones listed above.
12. Bundle Policies
Bundle policies can help you save up to 15 percent! If you have automotive insurance, inquire if your insurer can offer you better renters insurance. Some of the best insurance companies offering bundle policies with good discounts include GEICO, Progressive, State Farm, among others. However, you may still want to compare rates from different insurance providers. Finally, check with your insurer to see if they offer discounts on their policy plans.
13. Know What is Controllable
Before you decide to choose any renters insurance, you need to know if you can control anything. Some of the things you can always control include the deductibles, the items you want to be covered in the policy, the area you choose to reside in, and whether it has adequate security. For example, you can only include your most valuable items, such as gold rings to be covered in your renters insurance policy.
How to Get Renters Insurance
Now that you know some of the factors you need to consider before you get renters insurance, you should know how to get your renters insurance. There’s a process, and one could easily mess up without following the right procedure. Below is a step by step guide on how to get your renters insurance today.
1. Know What Isn’t Covered By Your Landlord
By law, a landlord is required to have an insurance policy. However, most landlords will only purchase insurance coverage policies to cover the building structure, leaving out the tenant’s property or bodily harm. If you have confirmed that your landlord does not protect your belongings or include any physical injuries in their policy, get yourself renters insurance policy.
2. Do Your Research
Before choosing any renters insurance provider, you need to research to know more about the policy’s insurer offers. You also need to note that the value of your items will determine the amount you pay. That means that the more expensive items you have, the higher you will be obliged to pay.
3. Compare Different Insurance Companies
Once you have done your research, you need to consider the date and compare it against different insurance companies to ensure that you are getting the best deal. If you already have an auto insurance policy, check to see if they could offer you more affordable renters insurance through bundling.
4. Estimate the Value of Your Property
The value of your belongings will determine the amount you will pay before your renters insurance takes effect. Do an estimated value of every item you have to have a rough figure of how much they cost. This should guide you on how much liability coverage you might need to cover all your items.
5. Get a Quote
Most insurance companies are now online, which means that you can quickly get a quote online without physically visiting their premises. Check the insurance company’s website and see if they have a page where you can request a quote. If there’s none, you can quickly get them on a call. You should be able to find their number on the “Contact Us” page.
More Useful Tips Before Purchasing Your Renters Insurance
1. Decide on the Right Coverage Amount
As mentioned before, renters insurance provides coverage for damages resulting from accident, burglary, or natural disaster. According to State Farm, an average renter has possessions worth $35,000, but the coverage amount you need will depend on many factors. To decide on the right coverage amount, draft a complete inventory of your belongings to have a more accurate idea.
2. Know What the Coverage Doesn’t Cover
Usually, renters insurance provides coverage for many circumstances. However, there are instances that this policy doesn’t cover should you need to file a claim. Such include natural disasters such as earthquakes or floods. In such a scenario, you have no option but to purchase a separate policy to cover these events. So before you opt for any policy, ensure to have in-depth knowledge about what is and isn’t covered.
3. Understand the Different Types of Coverage
Know the different types of insurance coverage to opt for when purchasing a renters insurance policy. There are two main types of policies – the actual cash value and replacement value policies. The actual cash value policy will consider the everyday use and depreciation of an item when calculating your property’s value. Usually, this type of policy won’t give you much when you file a claim.
On the other hand, with a replacement value policy, the insurer will consider how much it will cost to buy a similar item depending on the current market price. That means that this type of policy will not consider the depreciation of an item to calculate the value. Usually, renters will pay more and get better compensation with this type of insurance policy.
4. Bundle Your Renters Insurance Coverage
Bundling your renters insurance policy has proven to be one of the best ideas when you intend to trim down some costs. If you already have an auto insurance cover, check with your insurance provider to see if they can bundle your renters insurance. This can help you save between 10 and 20 percent of the discount your auto insurance provider will offer you.
5. Get a Higher Deductible
As mentioned earlier, a deductible is the amount of money you will have to pay the insurer before your renters insurance takes effect. Depending on the insurance provider you choose, the deductible could range from $200 to $1,000. It might be tempting to get a lower deductible because you will generally pay lower upfront, but that’s not the right move. However, choosing a higher deductible will mean that you will pay lower premiums, saving you some money.
If you want to live a stress-free life in your new apartment, getting renters insurance may never be a choice but an obligation. Sure, you might not necessarily need this type of insurance, but you can get relieved from out-of-pocket spendings as a result of unexpected perils. Therefore, get your renters insurance cover today.
State Specific Advice
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- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Northern Marianas Islands
- Puerto Rico
- Rhode Island
- South Carolina
- South Dakota
- Virgin Islands
- West Virginia