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| | | Renter's insurance covers personal possessions in the event that they are damaged or destroyed in a rented house or apartment. Damage to the structure is protected separately with insurance purchased by the building owner. Renter's insurance also protects the renter from liability in the event another person is injured in the house or apartment. | | |
| Typical costs: | - The cost of renter's insurance varies widely based on the type of coverage; the amount of coverage; the deductible to be paid; and the geographic location of the house or apartment being insured. But the National Association of Insurance Commissioners reports that the average renter's insurance premium costs as little as $15 -$30 a month.
- According to Esurance Inc., for instance, for a two-bedroom apartment with $35,000 of property loss coverage, a $500 deductible, $100,000 in liability coverage and $1,000 for medical expenses, the annual premium is $206 a year in Santa Clara, Calif. If the deductible is increased to $1,000 and all other amounts stay the same, the premium drops to $187 a year.
- Insurance companies don't charge for renter's insurance based on the size of the residence but State Farm Insurance's calculator, for instance, asks for the number of rooms in a residence to give the shopper an idea of how much personal property coverage they may need. State Farm's premium for a four-bedroom home in Santa Clara, with personal property coverage of $70,000, is $313 a year.
- Premiums vary by location, too. The same coverage for a four-bedroom home in suburban South Bend, Ind., is only $294 a year.
- The premium could be higher if the renter has filed a claim before; if their residence is more than 10 miles from a fire station; if the rental unit lacks smoke or fire alarms or sprinklers; or if it lacks deadbolt locks or burglar alarms. Because of liability concerns about dog bites, renter's insurance could also cost more if the insured has a dog (depending on the breed).
What should be included: | - Insurance companies are regulated by states. The California Department of Insurance web site offers advice on how to buy renter's insurance. A shopper should visit their own state's insurance agency site because laws vary by state.
- Coverage a renter's policy should include are:
- Personal Property coverage, which protects the renter's personal possessions, such as furniture, clothes, consumer electronics products and household appliances, if they are stolen or damaged by fire or some other disaster. Renters insurance does NOT, however, cover loss from floods.
- Loss of Use insurance, which covers the cost of alternative housing in the event the renter can't live in their unit after a fire or other catastrophe.
- Personal Liability coverage, which protects the renter in the event they are sued by someone who is injured in the rented home. In California, the minimum liability coverage starts at $100,000.
- Medical payments coverage, which covers the cost of medical care for someone other than the renter who is injured in the home. Medical cost coverage begins at $1,000 in California.
Additional costs: | - The deductible is the amount the insured must pay out-of-pocket before their insurance company pays on a claim. The higher the deductible, the lower the premium because a higher deductible means the insured is taking on more of the risk from a loss.
- Additional coverage can be purchased for other valuables. State Farm, for example, offers additional personal property coverage from $2,500 to $10,000 for items such as jewelry, furs, computers or property related to a business.
- Identity theft insurance is now being offered by a number of insurance companies under a homeowners or renters policy, in the event items stolen in a burglary result in financial losses. Carriers such as State Farm and Nationwide offer it for from $30 to $100 a year, depending on the amount of coverage.
Discounts: | - One of the best ways to qualify for a renter's discount is by also insuring something else, such as a car, with the same insurance company. For example, renter's insurance for a two-bedroom apartment in Santa Clara with $35,000 worth of property coverage, a $500 deductible, $100,000 of liability coverage, and $1,000 in medical coverage costs $158 a year from State Farm. But if the renter also has car insurance with State Farm, the renter's premium drops to $125 a year.
Shopping for renters insurance: | |
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Article updated August 2009 |
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