How To Choose the Best Renters Insurance in 2023

How To Choose the Best Renters Insurance in 2023

Choose what you want to talk about. The Insurance Information Institute says that most renters insurance policies have three basic types of coverage: personal property, liability, and additional living costs.

Think about your needs to decide which of the following you want to cover:

Your personal belongings include clothes, bedding, sports and hobby equipment, small items that didn’t come with the rental property, and anything else you own that’s stored in the unit.

A renters insurance policy’s liability coverage will pay for a guest’s court fees and medical bills if they get hurt in your unit.

If you have to move out of your unit because of a covered event, additional living expense coverage will pay for hotel bills, restaurant meals, and other costs that are on top of your usual living costs.

In our What Does Renters Insurance Cover? guide, we give a longer list of the types of benefits that renters insurance can offer.

Find out how much renter’s insurance you need. Make a list of everything you own so you can figure out how much renters insurance you need. Walk through each room of your house and make a list of everything you own, even things that are hidden, like clothes in a closet.

All of these things might need to be replaced after a big accident, so make sure you buy enough insurance. Especially valuable things, like expensive jewelry, may need a separate insurance or an add-on.

You can choose a policy with a replacement cost or one with a cash worth. A replacement cost insurance has a slightly higher premium, but it will pay you back for what it would cost to buy new items to replace the ones you lost or broke. On the other hand, if you have an actual cash value policy, you will only get back what the things were worth when they were used. With some kinds of property, like electronics that lose value quickly, a real cash value policy will leave you without enough money to buy new things.

Pick an insurance company for renters. When choosing a policy, look at companies that use their own agents, those that use independent agents who refer clients to more than one insurance company, and those that sell policies straight online and over the phone. Family, friends, and real estate agents can all give you good advice. Ask at least three companies for price quotes, but don’t just look at the price. Customer service and a good financial rating from agencies like AM Best are just as important, if not more so.

Select a plan. Lastly, choose an insurance with enough coverage for your personal items and liability. Read the small print and make sure you understand all the terms of your policy, including what it covers and what it doesn’t, so there are no unpleasant surprises later. Lastly, you might want to add extra coverage for floods, earthquakes, and other common disasters in your area that a standard insurance might not cover.

Should I get renters and car insurance at the same time?

You can bundle your renters and car insurance if you want to, but it might not always be the best deal. Many of the insurance companies we rated let you buy these two plans together, which can lower your premiums. But the amount you save will depend on the specifics of the insurance you bundle.

There might be savings like this for other types of policies. For example, Allstate lets you bundle renters insurance with term life insurance or auto coverage, while Nationwide lets you bundle renters insurance with motorbike coverage.

You might save more money if you bought two policies from different companies. See our How to Bundle Renters and Car Insurance guide for more details.

What does insurance for renters cover?

If you rent, your landlord’s insurance covers the house, but not the things inside it. In the event of an accident, your owner cannot be held financially responsible for any damage to your things. Like homeowners insurance, renters insurance is meant to protect the things in your home.

The following are also covered by a standard renters insurance policy:

Theft. If someone breaks into your house or flat and steals things, you would file a claim with your renters insurance company. The company would pay you for the stolen items. Usually, renters insurance covers crimes that happen outside your home, like if someone pickpockets you or takes your phone while you’re out and about.

Living costs. Loss-of-use coverage helps pay for extra costs you have to pay because of damage to your house. If, for example, a fire in your building makes your flat unlivable, loss-of-use coverage may help pay for a hotel room for you to stay in.

Guests were hurt. If someone gets hurt or their property gets broken and you are blamed for it, your personal liability coverage kicks in. Your rental insurance may also pay for the guest’s medical bills or defend you in court if the person who got hurt takes you to court.

Whether or not an insurance company will pay you money in these situations depends on the rental policy you buy. The payout caps often change based on the premiums (the monthly payments you make for the policy) and the deductible (the amount you have to pay out of pocket before the insurance policy kicks in).

Don’t just look at the price when you’re buying renters insurance, though. The cheapest company might not offer the services you need or have good customer service. The Consumer Federation of America says that good customer service is especially important because it makes it easier and more pleasant to file a claim.

Do I need insurance if I’m a renter?

There are a few reasons why you might want to think about getting renters insurance.

Landlord requirements. Some landlords and rental agencies ask tenants to follow a strategy for renting. Check your lease or talk to your current or possible landlord to find out if you need insurance.

Insurance for your things. Your landlord probably already has an insurance policy to protect the building, but that policy won’t cover your things if they get stolen, damaged by water or fire, or damaged in any other way. You can protect things like clothes, computers, and appliances that you use every day with renters insurance.

Protection from being sued. Most renter’s insurance plans cover liability. If someone gets hurt or their property gets damaged and you are found legally responsible, having an insurance can help you pay for repairs, replacements, or medical bills.

Help with money after an accident. Most renters insurance plans include “loss of use” coverage, which can help pay for a hotel or other important costs (like daily meals) if you have to move because of a covered peril.