Rachael Green
Most homeowners know that they need home insurance to cover loss or damage to their property — and if you have a mortgage, you usually have no choice.
But if you’re one of the more than 100 million Americans who are renting instead of buying, don’t overlook the value of renters' insurance.
If your rental home is damaged during a fire or a break-in, your landlord is responsible for repairs to the property you’re renting, but not for fixing or replacing your personal possessions.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That’s where renters' insurance comes in. Policies typically cover up to a limited dollar amount for clothing, furniture and electronics. Here's what you need to know before you shop for renters' insurance.
What does renters' insurance cover?
Most renters insurance policies cover your personal belongings, including furniture, electronics and appliances. If your things are destroyed in a disaster, stolen during a break in or otherwise damaged by a covered peril.
Particularly valuable items, such as jewelry, artwork and collectibles, may require that you get additional coverage, known as a rider or a floater.
When shopping for a policy, be sure to tally up the value of your belongings as accurately as possible and determine whether the policy’s limits are adequate.
You'll also often have the option to add coverage for additional living expenses or liability. The first covers your costs if you're forced to move out temporarily while your unit is being repaired.
Renters' liability insurance protects you from being sued for injuries or property damage that happen in your rental unit. For instance, if your pet bites someone, your policy could cover medical expenses.
Renters' insurance may also cover the belongings of your roommate or significant other, as long as their name is on the policy. But many insurance companies will require roommates to have separate policies, rather than one for their combined property. Theft by a roommate is generally not covered by renters' insurance, so choose your roommates wisely.
Renters' insurance generally won’t cover damage to your personal property from natural disasters, such as hurricanes or earthquakes, says Janet Ruiz, spokeswoman for the Insurance Information Institute. For that, you’ll need to purchase special coverage.
How much is renters' insurance?
Although renters' insurance could save you a lot of money, it doesn’t require a big investment. “It’s one of the most affordable products you can get — often as low as $300 a year,” Ruiz says.
Unlike homeowners insurance, which can cost as much as three times the national average in some states (such as Florida), renters' insurance is usually inexpensive no matter where you live, Ruiz says.
Tips to cut the cost of renters' insurance
There are a number of strategies to cut the cost of renters' insurance.
- You may be able to get a discount by buying a policy from the same company that insures your car, for example.
- You may also get a discount if you take steps to make your rental property safer from break-ins, such as installing a security camera, says Dustin Lemick, an industry expert and founder of BriteCo, a jewelry insurance company.
- It’s important to shop around. You can compare coverage and costs of various renters' insurance policies at sites such as TheZebra.com and Gabi.com.
- And keep an eye on changing premiums. “Insurance companies are notorious for raising rates, and policyholders don’t even know it,” Lemick says. “Put a note in your calendar every eight to 10 months to review your policy and make sure your premiums haven’t gone up.”
Related content
-
Eight Ways To Save on Your Next Luxury TripLooking for ways to stretch your retirement dollars? Follow these tips to get a deal on your next vacation.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What Pet Insurance Does and Doesn’t CoverPet insurance can save you thousands on vet bills, but it doesn’t cover everything. Here are the key types of coverage and exclusions you need to know.
-
Hail Damage Insurance Claims: Is Filing Worth the Cost and Hassle?Before filing a hail damage insurance claim, understand the potential costs, risks and whether it’s worth the effort. Learn when to file and when to pay out of pocket.
-
Five Smart Ways to Use Your Life Insurance While You're Still AliveLife insurance can do more than just provide for your heirs — here’s how to maximize your policy while you’re still here.
-
Five Water Damage Risks Homeowners Forget About — and Why Insurance Won’t Always Cover ThemWater damage is one of the most common — and costly — home repairs. Here's what your policy may not protect against, and how you can avoid major headaches.
-
What Does Travel Insurance Cover? 6 Types of Coverage for Your Next TripFind out what travel insurance covers and whether or not you need it on your next vacation.
-
Denied and Abandoned: The Rise of Unregulated Insurers and the Homeowners Left BehindAs traditional insurers retreat from California's high-risk zones, a surge of unregulated carriers steps in, leaving a trail of denied claims and devastated homeowners.
-
Why You Should Pay Your Traffic Tickets Before They Become a Six-Figure HeadacheSkip a ticket, pay a fortune: How ignoring traffic fines can wreck your wallet, credit and coverage.
-
What Is Term Life Insurance?Term life insurance offers affordable coverage for a set period — here’s how it works and when it makes sense to buy a policy.
