It’s important to figure out how much renters insurance you’ll need in 2022 so you don’t under-insure yourself and your family.
And the truth is:
It’s easy to buy the first policy you review without comparison shopping.
However, you need to do some research before you get covered.
In this post, I go over everything you need to know about renters insurance, how much you need, and if it’s required.
How much tenant protection do I need?
Renter insurance determines how much the company will cover during a claim. This limit depends on the type of plan you choose.
The higher the limit, the more insured claims. State Farm reports that the average policy covers up to $100,000 in damages.
Therefore, a policy with a liability limit of $100,000 would probably be a good place to start. Now you might be wondering, “How much is renters insurance for $100,000?”
The premium can vary widely based on the value of your personal belongings, your neighborhood and other factors related to your background.
Progressive notes that the average renter insurance policy ranges from $13 to $25 per month. On the cheaper end of the spectrum, Liberty Mutual claims you can get customizable renters insurance for as little as $5 a month.
However, according to Liberty Mutual’s coverage calculator, the deductible — the amount you owe before the insurance company pays the claim — is relatively easy to calculate for a $100,000 plan.
People between the ages of 23 and 30 living in a low-risk area and earning less than $100,000 would pay a $500 deductible for such a plan.
Things to consider when calculating your needs
Most renter insurance policies cover disasters like fires and tornadoes, but they often don’t cover damage from floods or earthquakes. Where you live will determine whether you need to purchase additional insurance to cover these disasters.
The most important consideration is the monetary value of your personal belongings and the amount of personal liability you wish to insure.
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Will my landlord ask for renters insurance?
Of course, you could start by asking, “How much renters insurance should a landlord charge?”
However, some landlords do not require rental insurance for your rental apartment or house.
Mainly because there are no state laws that force a renter to get renters insurance the same way they would get auto insurance, for example.
However, most state laws allow the landlord to require renter insurance to cover their liability.
The landlord insurance does not cover your personal belongings or damage that you as a tenant could cause to the building.
In many of these states, the landlord mandates renters to take out renters insurance. You just need to check the laws in your specific state.
In most cases, however, your landlord will require renters insurance no matter what state you live in.
It is also in your best interest to take out renters insurance to cover your personal belongings in the event of damage caused by unexpected events such as fire or theft.
Policies also cover liability for injury occurring on the property due to renter’s negligence.
So, will your landlord specify the type of renters insurance you should get?
Many landlords simply require you to show proof of coverage when you move in, although some will suggest specific renters insurance companies they know and trust.
Some landlords will even ask you to add them to your cover as a prospect.
Read the following sections to learn more about the different types of renters insurance.
What is the average cost of renters insurance?
The National Association of Insurance Commissioners (NAIC) conducted a study of the average cost of renters insurance based on 2017 data – the most recent data available.
The NAIC study found that the average cost of renters insurance in 2017 was $180 per year, or $15 per month.
Of course, premium costs will vary depending on your location, insurance company, and the value of your personal belongings.
According to State Farm, the average person owns $35,000 in personal belongings.
The same study also lists the average renters insurance by state. For example, the average annual rental insurance premium in Alabama costs $235 per year, while in Missouri it costs only $173.
What does renters insurance cover?
Household contents insurance consists of two different components, property insurance and liability insurance.
The building insurance component insures against damage to or theft of your personal belongings – not the building itself.
The personal liability component covers your liability and medical costs up to a certain amount for accidental damage or injury that you or your guests suffer in your rental unit.
Most household contents insurance also includes loss of use insurance.
This provision covers your hotel and meal expenses if you are hospitalized as a result of an insured loss or peril, such as an accident. B. a fire, temporarily unable to live in your home.
While most renter’s insurance policies cover disasters like fires and tornadoes, they often don’t cover damage from floods or earthquakes.
How to buy renters insurance online
Find out how much you need
The first thing you need to do is figure out how much cover you need. This should be pretty easy for you after reading this article.
Essentially, figure out what you need to protect and ensure you have adequate coverage to protect it.
Once you know how much coverage you need, it’s time to make comparison purchases and get quotes.
Their goal is to receive instant offers that do not require any personal information. Once you have a few quotes, it’s time to read some reviews.
Read online reviews
At this point, you should have an insurance company or two that you want to cover yourself with.
Your next goal will be to find a few online reviews about each company to learn more about them and how their products work.
You should 100% complete this step as some products have added bonuses that you may not be aware of.
Once you’ve found the price you want and the company you want to do business with, it’s time to apply online.
This process is usually super easy and you can get your cover started right away.
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Lower the cost of your renters insurance
Some renters insurance plans allow you to pay a lower premium to maintain your insurance.
In return, you’ll have to pay a higher deductible, which is the deductible you owe before your insurance policy pays a claim.
You need to weigh the risk in the trade-off between reducing your premium and increasing your deductible if you suffer property damage or personal liability.
State Farm provides this example: If a fire causes $1500 in damage and your deductible is $500, your insurance company will pay the difference: $1000.
If money is tight, you might want to consider other ways to lower your insurance premium costs, especially if you’re flexible about your city or neighborhood.
Certain factors may cause your premium to increase:
Skip additional coverage such as floaters can also help offset your renter’s insurance costs.
Finally, consider bundling your renters insurance with another insurance policy, like car insurance, to save money.
To become active
Once you know how much renters insurance you need, it’s time to take action because going without coverage is really crazy.
If you need rental insurance, we’ve done the hard work for you – check out the top three companies or get your free rental insurance quote today.