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If you’re a renter, you may be wondering whether you need renters insurance — and if so, how much.
Renters insurance protects you from loss if your possessions are stolen or damaged while you’re renting. Many landlords require renters insurance because it helps provide them with reduced liability and protects them from potential claims against their property.
How much renters insurance you actually need will depend on your belongings, liability exposure, and living situation, as well as what your landlord requires.
Key Points
• Your renters insurance needs depend on your belongings, liability exposure, and living situation, as well as what your landlord requires.
• A typical policy could include $40,000 in personal property coverage, $100,000 in liability coverage, and a $1,000 deductible.
• Taking inventory of your personal property can help you assess whether your policy provides adequate coverage for all your belongings.
• To fully cover high-value items, you may need a scheduled personal property endorsement to bypass sub-limits.
• Additional living expense coverage can help pay for hotels, food, and transportation when you must relocate during covered repairs to your rental.
• Comparing multiple insurers, bundling policies, paying annually, and choosing a higher deductible may all lower renters insurance premiums.
Average Renters Insurance Coverage and Cost
First of all, you’ll want to know the extent of what renters insurance can do for you. So before you purchase it, it’s important to understand what renters insurance covers.
For example, you may wonder: Does renters insurance cover injuries? Most renters insurance policies cover the cost of damage to or loss of personal property caused by covered perils. These include things like fire, lightning, or theft.
Renters insurance can also cover some additional living expenses that you might face if you have to leave your rental due to a covered loss or repairs. Additionally, renters insurance policies may cover financial protection for covered accidental bodily injury or property damage to others. So in those cases, yes, injuries may be covered.
But how much is renters insurance? The average cost of renters insurance is about $23 per month, depending on the exact coverage. Breaking down average renters insurance coverage, a typical policy might include $40,000 in personal property coverage, $100,000 of liability coverage, and a $1,000 deductible. However, the amount of renters insurance you should purchase depends on your personal circumstances.
Recommended: What Is Renters Insurance and Do I Need It?
How To Determine How Much Renters Insurance You Need
To determine how much renters insurance coverage you need, you can start by taking inventory of your personal property, then assess your liability coverage needs, and finally, consider additional living expenses coverage.
Take Inventory of Your Personal Property
First you’ll want to figure out what you actually own so that you can ensure your insurance policy provides adequate coverage for all of your belongings. Make a list of everything you own and its estimated value. You don’t need to know the exact price of all of your belongings – a quick online search will suffice. Remember to include items like jewelry, art, clothing, furniture and collectibles. Having this list of belongings can also help you in the event that you need to file a claim.
Assess Your Liability Coverage Needs
Knowing the approximate pricing of your belongings can help you determine your liability coverage needs. The insurance coverage limit is the most the insurance company will pay for losses resulting from a covered event. You can work with an insurance agent to determine the appropriate coverage amount.
Consider Additional Living Expenses Coverage
Additional living expense coverage can help pay for costs that you face when you have to live somewhere while your rental is being repaired after a covered loss. Additional living expense coverage includes costs — for things like hotels, food, transportation, and more — that you incur during this time. If you want additional living expense coverage, you’ll need to add this on to your insurance policy.
Recommended: Does Renters Insurance Cover Roommates?
Understanding Renters Insurance Coverage Limits and Sub-Limits
Every renters insurance policy has an overall limit for property claims. The limit is the most that your insurance company will pay for losses resulting from a covered event.
Some renters insurance policies also have sub-limits for high-value items like jewelry and art. You can arrange for a scheduled personal property endorsement to add full appraised value coverage without sub-limits for specific items.
Recommended: Why Do Landlords Require Renters Insurance?
How To Save on Renters Insurance
If you’re looking to save money on renters insurance, there are a few options. It’s generally a good idea to shop around to find the most affordable renters insurance for apartments.
Compare multiple companies. Some insurance companies offer discounts if you pay for a full year of insurance upfront rather than paying monthly.
If you have auto insurance, you may be able to get a discount by bundling your renters and auto insurance together from the same company.
Another option is to get a policy with a lower premium and a higher renters insurance deductible. However, in this case, if you have to file a claim, you’ll be on the hook for the higher deductible.
The Takeaway
Renters insurance is important to have, but how much renters insurance you should actually have will vary from person to person. While your landlord might have specific requirements, to make sure that your coverage reflects what your possessions are worth, you may want to assess your needs and adjust your coverage accordingly.
If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.
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FAQ
What is the typical renters insurance coverage amount for personal property?
The personal property coverage of your renters insurance policy should typically match the replacement cost of all of your belongings.
Is $100,000 in liability coverage enough for renters insurance?
Renters insurance with $100,000 in liability is the average. With that amount of liability coverage, renters insurance costs an average of $23 per month.
Do I need more renters insurance if I have expensive jewelry or electronics?
Standard renters insurance covers personal belongings, including jewelry and electronics, but it often includes sub-limits for high-value items like these. You can ask for a scheduled personal property endorsement to add full appraised value coverage without sub-limits for the specified items.
Does my landlord’s required coverage amount reflect how much I actually need?
No, your landlord’s required coverage amount does not reflect how much you actually need. The amount that you actually need is based on your personal belongings, liability exposure, and living situation.
Can I adjust my renters insurance coverage amount after purchase?
Yes, you can usually adjust your renters insurance coverage amount after you have purchased the policy. Most providers let you update your coverage online or by contacting customer service.
Photo credit: iStock/Jana Murr
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