What Is Renters Insurance?

How Does Renters Insurance Work?

Renters insurance policies help you recover costs that result from personal property damage, theft and other situations. It typically covers all types of personal property, from clothes and electronics to furnishings and appliances, and isn’t limited to events that happen inside the property.

As with other types of insurance, you pay a premium, often monthly or annually, and in return, you’ll have a certain amount of coverage if an incident occurs. To receive payment for an eligible loss, you’ll file a claim with your insurer detailing the events that led to the damage or other occurrence, such as an injury on the property, and may receive an amount up to your coverage limits.

If you have a deductible on your policy, you will have to pay that amount before your insurance company will pay out on the claim.

What Does Renters Insurance Cover?

Renters insurance coverage typically is divided into three categories:

• Property damage: If your personal belongings are damaged inside your rented home or apartment, you may have coverage if a qualifying event was the cause. Your belongings may also be covered if damaged or stolen outside your rental. Some events that may qualify include:
  • Fire and smoke
  • Windstorm
  • Lightning
  • Explosion
  • Theft
  • Vandalism
• Personal liability: If a guest accidentally injures themselves on your property, personal liability coverage will pay their medical bills as well as legal costs you may incur as a result of the event. It also covers property damage, such as if your child accidentally bats a ball through your neighbor’s picture window.
• Additional living expenses: If you experience a serious break-in at your apartment and must vacate the premises for a few nights for investigation and repair, for example, your additional living expenses could be covered by renters insurance. This coverage can help with the cost of a hotel and dining during your time away from home.

What Doesn’t Renters Insurance Cover?

There are some situations where renters insurance may not cover damage or losses of your personal property. These specific events include:

• Floods
• Earthquakes
• Jewelry or artwork of high value
• Items not documented in the policy

If you own high-value items or live in an area prone to earthquakes, you can look into supplemental coverage. This can help fill in any gaps left by your insurance.

How Much Does Renters Insurance Cost?

Renters insurance is generally considered affordable and offers a high value of coverage compared with its cost. The average U.S. premium for renters insurance is about $15 a month, or $178 per year, according to Experian data.

For this relatively low cost, you can purchase a policy that covers either the replacement cost or actual cash value of your belongings. As part of your policy, you can generally choose personal liability limits of $100,000 to $500,000, with more coverage equating to a higher premium.

How to Get Renters Insurance

Before shopping for renters insurance, figure out the amount of coverage you need. You can come to this number by adding up the cost of replacing your belongings. You’ll want to purchase a policy of at least this value. This makes sure you have adequate coverage in case something catastrophic happens.

To purchase a policy, get quotes from several insurance companies. You’ll typically need to provide the following information:

• Name, address and telephone number
• Social Security number
• Birth date
• Marital status
• Rental property address
• Your policy’s expected start date
• The total value of your personal property
• Whether you have a pet (dog bites likely are not covered by renters insurance personal liability coverage)

You can usually get quotes online or over the phone. If you are not sure what kind of policy will work best for you, you can consider working with an insurance agent or broker.

Protect Your Belongings

If you’re a renter, consider budgeting for renters insurance. Renters insurance isn’t always required by your landlord, but it is almost always a good bet when you compare the cost to the potential value in the event that you need it.

Getting quotes for renters insurance can feel time-consuming, but when you use Gabi^®, a part of Experian, to compare renters insurance quotes, it can be a much faster process. Gabi can help you shop around for the best price and help you obtain coverage too.

If you already have a renters insurance policy, you can easily and securely link your current policy in the Gabi platform. This helps Gabi compare your policy, apples to apples, to new coverage to find the best deal.