Do you know how much is renters insurance? If you don’t then you should know that renters insurance is surprisingly inexpensive, costing an average of $15 per month.
What is Renters Insurance?
In the expensive world of getting insurance, the cheapest one is the renters insurance. Or you may call it as ‘Tenants Insurance’ or ‘Apartments Insurance’. It is the protecting agent for your personal possessions present inside your house if something bad happens to the rented property.
Cost of Renters Insurance
Usually the thought of another insurance is so dreadful because it would eventually cost a hundred dollar out of the pocket per month. But that is not the case with renters insurance, this type would hardly cost you up to $300 a year, so buying this policy would not be a problem.
It also has a plus point of various different factors depending on the cost, giving you more options to set the price as per your choice. These factors are:
1. Location:
This is kind of important factor because every country or state has their own economy rates plus if the country or city your house is located in, is more prone to damages by fire, flood or any other natural disaster then the premium would be surely higher.
The average premiums of some states depending upon their location are:
The expensive states for renters insurance:
Following states experience the most expensive premiums among others because they are located in Southern areas which are in more danger for hurricanes:
| Southern States | Average Annual Premium |
|---|---|
| Mississippi | $258 |
| Oklahoma | $236 |
| Alabama & Louisiana | $235 |
| Texas | $232 |
| Georgia | $219 |
| The cheapest states for renters insurance: | |
| Well you would be lucky if you live in any one of the Western states because they have the lowest annual cost required to be paid for the renters insurance. These are much more protected from extreme weathers and disasters. | |
| Western States | Average Annual Premium |
| — | — |
| North Dakota | $120 |
| South Dakota | $123 |
| Wisconsin | $134 |
| Minnesota | $140 |
| Lowa | $144 |
2. Type of coverage
The renters insurance provide three different kinds of coverage which totally depends on your credit store.
- Personal possessions: It covers all your personal properties in case of any damage to them via fire, theft, or vandalism etc. But it does not cover damage from earthquakes or flood, costing less annual premium.
- Liability coverage: The coverage can pay from $100,000 to $300,000 for any injury or damage done to the guests or any stranger in your rented property.
- Additional living expense: It can also be called as ‘Loss-of-use coverage’. It could be expensive as it pays for all the expense of your temporary living in case of your residence being uninhabitable.
The usual default policy in most of the renters insurance include $25000 of personal property and $1000,000 of personal liability but it can increase on your choice if you want to include more of your personal property. Increase in liability coverage can affect more on the annual cost than personal property.
| Personal Property Coverage | Personal Liability Coverage | Premium for Renters Insurance |
|---|---|---|
| $15,000 | $100,000 | $124 |
| $15,000 | $300,000 | $132 |
| $25,000 | $100,000 | $153 |
| $25,000 | $300,000 | $161 |
| $50,000 | $100,000 | $224 |
| $50,000 | $300,000 | $236 |
3. Amount of Deductible
Deductible is the amount that you have to pay, from your own pocket, for the loss that happens before the insurance policy kicks in. This means that once you get enrolled for the insurance there’s a waiting period during which if anything happens you have to pay the price.
But this deductible can be compensated with the amount of premium i.e. the annual cost. If you choose high deductible than your premium will be less. The deductible in this type of policy is from $500 to $1000.
4. Value of your Possessions
The cost also depends on the type of things you possess or the type of person you are. If you have high quality timber wood furniture then it would cost more to insure but if you are the type of person who can settle for a second hand furniture in case of loss or damage then the premium would be less. The amount of your stuff also affects the premium or basically it is the real driver here.
5. Type of Payment Policy
There are also options for how you want to be paid. There are two types of renters insurance policy:
- Actual cash value (ACV): This is the type where the insurers pay for the actual value of your belongings at that time, not the price on which you have bought them or with which they can be replaced.
- Replacement cash value (RCV): This is more suitable policy because the insurance will pay the exact same or almost the same amount for the lost or damaged items.
The type of policy you choose depends on your items value, if you want to insure higher value things then you should definitely go for the RCV policy. But keeping in mind that in RCV the insurers pay out more so they will cost more too.
Summary:
Renters insurance is much more cheaper than homeowners insurance. Although this insurance offers many options for every type of families out there but it may be expensive for people with low credit store and many other expenses on the wait.
What does Renters Insurance does not Cover?
Just like other insurance policies the renters insurance also have some exceptions which are not covered in any type of renters insurance. They are:
- Damaged caused by bugs: These small creatures can easily worn out your wooden furniture or your sofas. You better take some measures against them because once the damaged is caused you have to pay for it from your own pocket.
- Highly valuable items: The insurance has the limit of $2,500 for electronics and $1,500 for jewelry set for the coverage. Any other expensive jewelry, heirlooms or antiques will not be covered by this insurance in case of any theft or lost. Because these would definitely cost over the limit.
- Natural disasters: It is quite clear from the beginning that damages caused by the floods or earthquakes and even pipeline breakage is not covered by it. But the volcanic explosions or hurricanes are covered, unexpectedly. So if you live in areas prone to these two disasters you should consider taking an additional coverage.
- Roommates: Your room mate will not be included in your renter insurance until and unless he or she buys the insurance for himself or you can have joint renters insurance.
- Your auto-vehicle: No they are not covered in it because that’s what auto insurance are there for. Although your belongings present inside your vehicle are covered in case they are stolen.
Best Insurance Companies in 2020
There is the list of some of the insurance companies declared as the best in the year 2020. Each of them offering different premiums relying on the type of coverage they are providing.
| Insurance Companies | Reason to Choose | Average Cost /Month | Ratings |
|---|---|---|---|
| Allstate | Online tools | $15 | 4.2  |
| Nationwide | Extended coverage | $20 | 3.8 |
| Liberty Mutual | Discounts | As low as $5 | 4 |
| American family | Competitive rates | Less than $15 | 4.8 |
| State Farm | Policy management | $18 | 4.2 |
| USAA | Military members and families | As low as $10 | 3.8 |
How much is Renters Insurance in Different Countries?
Every country have their own economy crises and they offer the pay outs accordingly. The renters insurance in the following few countries depends upon the coverage they offer.
In Australia:
Taking an example of Allianz insurance company of Australia the starting is just €10 per month and considering its other benefits the cost may vary.
| Benefits | Renters Insurance Coverage |
|---|---|
| Alternative accommodation for you | 10% of the amount insured |
| Accommodation for your pet | $500 |
| Liability cover | $20,000,000 |
| Replacement of cylinders and locks | $1,000 |
| Guest’s or visitor’s property | Up to $5,000 |
| Contents that are to be kept outside | Up to $2,000 |
| Debris Removel | 10% of the sum insured |
| In New Zealand: | |
| The average cost for renter insurance entirely depends on what insurance policy you choose and also the company. But the standard rates start from $20 per month in New Zealand. |
In France:
Whether a flat or a house or an apartment, when you are in France you have to get renters insurance there is no way around, it is like a law there. Considering your location, your credit store, your items that need to be insured you should get an insurance worth €100 to €300 a year.
In Italy:
The renters insurance is mandatory in Italy which suggests that the cost could be as low as €15 per month as per the calculation of your coverage.
What are the Discounts in the Renters Insurance?
Discount, this is the most pleasurable word to hear when it comes to insurance because at times insurance can be way more expensive. There are some factors in this insurance by which you can control the cost too:
- Safety: The renters insurance check for following safety measures and if your house is equipped with any one of these than you are likely to get the discount:
- Fire extinguisher
- Deadbolt lock
- Burglar alarm may be local alarming the house or central alarming the whole monitoring system.
- Smoke alarms, they could be local for the house or central for the monitoring system.
- Automatic sprinklers
-
Bundle: This could be a plus point if you bundle up your renters insurance with any other policy such as with auto insurance policy, it would offer you a proper discount.
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Credit store: This feature is only applicable in some states. It works by saving the money showing that you have a good credit store which signals the insurers that you would be less of a risk.
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Full premium: It benefits some times when you can and you would pay the premium in one go rather than paying monthly, it would offer you some discount for the full payment.
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Claim free For a certain period of time if you go without claiming anything then you might be considered for the discount offer.
How much is renters insurance for an apartment?
An apartment may have variable cost for renters insurance. The average cost per year would be $187 for an apartment that would make $16 per month. But this is not accurate since there are many factors which will affect the per month cost.
Benefits of Renters Insurance
The renters insurance is not only the protection of your personal belongings it is much more than that, let’s have a look at it:
- Hotel Expenses:
The additional living expense of renters insurance comes very handy at the times when your rented house could not be used and you have to switch to some other place. All the hotel expense or rent of any other temporary apartment, meals, drinks are on the insurers.
- Medical Expenses for the Guests:
In case any of your guest or visitor gets injured in your apartment or house then the insurance will pay up to the policy limits. Some typical policy may offer the medical coverage of $1000 to $5000.
- Damage done by the Kids
At times the kids may got feisty and can cause damage to other’s property or some times by mistake you can also cause any mishap in the neighbor’s house or else where like break a vase or something, this damage caused by you or your kid can be paid out by the insurers too.
- Legal Costs
If you are being sued for accidentally causing injury to your visitor then the liability coverage might help you in paying your legal cost and court bills. The limit is set by you starting from the $100,000 and can go up to $300,000.
- Belongings far from Home:
When your personal things are being stolen from car or from a hotel room then the off-premises coverage can cover those amount but it is only allowed from the portion of your personal coverage plan like 10% coverage may be allowed for off-premises things.
- Dog Bites:
Dog bite are usually covered by the renters insurance whether your dog bites within the property or outside the property. But it should be checked while reviewing because some insurers do not include it or may set a limit to it.
- Borrowed Stuff:
Oh yes rented and borrowed stuff are also included in the personal property coverage, because once you borrow that thing will be in your possession which by the rule should be covered by them.
Summary:
There are several other benefits of rental insurance, therefore all you have to do is go get one to keep you and your expenses safe.
Frequently Asked Questions
Can you get renters insurance online?
Yes of course you can get it online. There is a website present for each specific insurance company from where you can instantly register yourself for the coverage of your choice.
Is renters insurance cheaper than homeowners insurance?
Renters insurance is definitely cheaper than homeowners insurance because the home insurance covers all of the things renters insurance does and besides these it also includes the coverage for repair or damage of infra structure of house.
How do you shop for renters insurance?
While buying renters insurance, or any other insurance, there are few things you need to keep in mind;
- Get to know what is covered.
- Choose the affordable coverage amount.
- Understand different coverage
- Collect and check your renters insurance policy
- Try to opt for high deductible
How much is renters insurance for a business?
Mostly the small businesses pay around $36 a month for a standard policy that would be median for the business. But it may vary according to the number of people who are involved in passing on of your rental daily, number of employees, crime rate, etc.
Why is my renters insurance so high?
Location is a very huge factor affecting the cost of it because if you live somewhere with more risk of suffering natural disasters than the cost would be very high. Try to switch towards the place where there is less probability of undergoing any damages.
Conclusion
Renters insurance, in short, ranges from $15 to $30 per month. It is that thing which you will find extremely important being a tenant no matter where you go or where you live. This should be a part of your living since each and everything you have is important and no matter how much is renters insurance there is affordability to it.
