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Your landlord's insurance won't cover your possessions against fire, theft or water damage, but renters insurance can. You can get renters insurance by assessing the value of your belongings, getting quotes from insurers and comparing coverage and costs. Follow these steps to get renters insurance.
What Is Renters Insurance?
Your landlord's insurance covers the building they own, but to protect your personal property, you'll need renters insurance. Renters insurance includes three kinds of coverage:
1. Property Insurance
Property insurance replaces personal possessions that are stolen or damaged by a covered risk. For example, if a fire destroys your living room furniture, property insurance would pay to replace it.
Covered risks usually include:
- Fire or smoke damage
- Theft or vandalism
- Lightning or windstorms
- Water damage due to structural problems, such as a burst pipe
Some renters insurance policies cover belongings stolen outside your home, such as a laptop stolen from your car or hotel room.
Renters insurance usually doesn't cover flood or earthquake damage. If your area is at risk, consider buying a separate flood or earthquake policy.
There may be limits on coverage for high-value possessions, like jewelry, computers or antiques. You can buy extra coverage (called a rider or endorsement) for belongings worth more than the limit.
2. Liability Insurance
Liability insurance protects you from legal liability if someone is injured at your rented property. If a neighbor slips and falls in your kitchen and sues you, for example, liability insurance covers your legal costs. Liability insurance may also pay medical costs related to such injuries.
Some liability insurance also covers damage you or members of your household cause to someone else's property. If your child breaks a neighbor's window playing football, for instance, liability insurance may cover it.
3. Loss of Use Insurance
Loss of use insurance pays for you to live elsewhere if a covered risk makes your rental property uninhabitable. For example, if you have to move into a hotel while water damage is repaired, loss of use insurance would pay any extra costs above your normal living expenses.
How to Apply for Renters Insurance
Follow these steps to apply for renters insurance.
Step 1: Estimate the Value of Your Belongings
To get enough insurance coverage, you need to know how much it would cost to replace everything you own. Estimate the total by walking around your rental home and listing your possessions. For more valuable items, such as expensive electronics, appliances, musical instruments or jewelry, it helps to take photos. Keep records of any information that could help recover items or prove their value. This includes make, model and serial numbers for electronics or appliances; receipts for major purchases; or appraisals for antiques, collectibles and jewelry.
Step 2: Talk to Your Landlord
You may qualify for discounts on renters insurance if your rental property has certain safety features in place. Ask your landlord about alarm systems, video cameras, smoke detectors, security patrols, sprinkler systems or other deterrents.
Step 3: Gather Your Personal Information
Before you apply for renters insurance, have the following information handy:
- Name, address and telephone number
- Social Security number
- Birth date
- Marital status
- Address of your rental property
- The date you want the insurance to start
- The value of your personal property
- Whether you have a pet (dog bites typically aren't covered by renters insurance liability coverage)
Step 4: Contact Insurance Companies
Renters insurance is available from most major insurance companies. Start by checking prices with your auto insurance company: Buying both from the same insurer could mean a discount. But don't stop there. As with any type of insurance, shop around before you buy.
Get quotes from several insurers and compare prices, making sure you're comparing the same type and amount of coverage. You can get quotes online, call the company or contact a local insurance agent for help.
How Much Does Renters Insurance Cost?
Renters insurance costs an average of $174 annually, according to the latest data from the National Association of Insurance Commissioners (NAIC). Mississippi residents pay the most ($252), while South Dakotans pay the least ($117).
The cost of renters insurance is a small price to pay for replacing all your possessions. But if money is tight, there are ways to save on renters insurance. Your renters insurance premiums are affected by:
Amount of Coverage
The more coverage you purchase, the more it will cost. You'll pay more to insure $100,000 worth of possessions than $10,000 worth, for example. Getting a rider for valuables such as expensive jewelry, art or collectibles, or buying flood or earthquake coverage, will also increase your premiums.
Replacement Cost or Cash Value Coverage
There are two options for rental property insurance.
- Actual cash value insurance pays you the current value of the item, which includes depreciation.
- Replacement cost insurance pays you the cost of replacing the item with a comparable new item.
Actual cash value coverage typically costs less; just keep in mind that it won't pay out as much if you have a claim.
The deductible is the amount you pay out of pocket when you file a claim. Suppose you file a claim for $2,000 and you have a $500 deductible. The insurance company pays $1,500 (the claim amount minus your deductible); you are responsible for $500.
You can lower your insurance premiums by choosing a higher deductible. First, make sure you'd be able to handle the higher deductible in case of a claim. If covering a higher deductible would be a financial stretch, increasing your deductible to lower your premiums may not be wise.
How Safe Your Property Is
If you live in a neighborhood with lots of crime, you'll likely pay more for renters insurance. On the other hand, if your rental property is protected by fire alarms, deadbolts, smoke detectors and other safety devices, you may get a discount.
Insurers frequently offer discounts for purchasing more than one policy (known as bundling). Buying renters insurance from the same company that handles your life insurance or car insurance could save you money.
Many insurance companies offer discounts to members of certain groups. You might qualify for a discount if you're over 65, for instance. Your employer, credit union or membership groups you belong to might also have discount arrangements with specific insurance companies.
Your Credit Score
In many states, insurance companies can conduct a credit check when you apply for insurance. The credit-based insurance score they check is different from your regular credit score.
However, since the two scores are based on many of the same factors, checking your credit score can give you a good idea of your credit-based insurance score. Maintaining good credit could help you pay less for renters insurance.
How to Boost Your Credit With Rent Payments
Rent payments typically aren't included on your credit report and don't affect your credit score. Since rent is probably one of your biggest monthly expenses, wouldn't it be nice if paying rent could help boost your credit score? It can with Experian Boost®ø.
Experian Boost is a free feature that adds your rent payment history to your credit report. Make your rent payments on time, and you can help improve your FICO® Score☉ .
Protect Your Property
Renters insurance is a relatively affordable way to protect your belongings against damage or theft. You can save on renters insurance by shopping around, seeking discounts and adjusting your coverage.
In states where insurers check your credit, a good credit score can also help reduce your premiums. Paying bills on time, paying down debt, minimizing your credit utilization and signing up for Experian Boost can all help improve your credit score—and potentially lower your insurance bill.