How To Get Renters Insurance: 3 Easy Steps

How To Get Renters Insurance: 3 Easy Steps

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Renters insurance is versatile. Whether you’re renting an entire house, a small studio apartment or sharing a place with roommates, renters insurance covers a host of problems such as stolen items, guest injuries and even hotel bills if you can’t live in your place because of a problem covered by the policy (like a fire).

“Replacing everything could get expensive in a hurry and be a real burden,” says Josh LaRoche, a spokesperson for Toggle by Farmers Insurance. “Getting renters insurance is a fairly inexpensive way for you to manage that risk.”

Step No. 1: Understand What’s Covered by Renters Insurance

What’s covered by renters insurance can generally be broken down into three main coverage types:

Personal property coverage. Think of all that stuff you have accumulated—furniture, clothes, kitchen items, jewelry, collectibles and electronics. This coverage pays to repair or replace them if they are stolen or damaged by a problem covered by your policy, like a fire or tornado.

Many people underestimate how much stuff they own and dismiss renters insurance. If you lost all your belongings in a disaster, would you be able to buy all new stuff?

Liability insurance. This pays for injuries or property damage to others when you’re legally responsible. For example, liability insurance pays for medical bills if a guest injures themselves in your apartment. Liability insurance also pays for a legal defense in case you are sued because of an accident.

Additional living expenses (ALE). Sometimes called “loss of use,” ALE covers expenses like hotel bills, restaurant meals and services such as pet boarding or laundry if you can’t live in your home because of damage due to a problem covered by the policy.

Renters insurance doesn’t cover damage to the actual building. That falls under your landlord’s insurance.

“When it comes to the items within your four walls, you’re responsible, because they belong to you,” says Yael Wissner-Levy, a spokesperson for Lemonade Insurance. She adds that for problems like fire, the landlord’s insurance will pay to repair the building but it won’t pay for your temporary living costs if you are displaced.

Step No. 2: Determine Coverage Amounts

The next step is to determine how much renters insurance you need. The best way to start this is by creating a home inventory.

A good home inventory will contain:

• A description of the item (or groups of items)
• Estimated value
• Purchase date
• Receipts and serial numbers (when possible)

You can use an app such as the National Association of Insurance Commissioners’ home inventory app (available in the App Store or Google Play).

Now that you have all of your stuff in a handy list, tally up the total estimated value, and you have a ballpark figure for how much personal property coverage you’ll need. A typical amount is $20,000 or $30,000, but you can buy more when needed.

American Family Insurance has a renters insurance calculator to help determine a coverage amount.

Liability coverage in a renters insurance policy will default to a standard amount such as $100,000. You can increase that amount, and you may want to in order to account for what could be taken from you in a lawsuit.

Coverage for additional living expenses will also have a default amount, such as 40% of your personal property coverage. With $30,000 of personal property coverage, that would be $12,000 for loss of use. Here, too, you can buy increased coverage.

Step No. 3: Compare Renters Insurance Quotes

The easiest way to shop for renters insurance is to compare quotes from multiple insurance companies. You can get free quotes online or by calling an independent insurance agent.

But don’t rely strictly on price. The best renters insurance companies combine competitive prices with good customer service.

Frequently Asked Questions (FAQs)

Do I need renters insurance?

If you want coverage to repair or replace your personal belongings, then you’ll want renters insurance. Your landlord’s insurance won’t help you out. And renters insurance covers much more than your furniture and vintage stamp collection. It also comes with liability insurance in case someone sues you and additional living expenses coverage if you’re temporarily displaced because of a problem such as a fire.

Does renters insurance cover flood damage?

Flood damage from problems like hurricanes or torrential rains are excluded from renters insurance policies. If flooding affects your area, consider a separate flood insurance policy from FEMA or a private flood insurance company.

Does renters insurance cover earthquake damage?

Renters insurance typically doesn’t cover earthquake damage. But you can find earthquake insurance to cover your personal property. In California, you can find earthquake coverage starting at $35 a year, according to the California Earthquake Authority.