In this article, you will discover the basics of renters insurance, including different types, terms often used, and simple tips you can use to save on your renters insurance quotes. In addition, you will discover a list of some of the most reliable renters insurance companies in the country.
Renters insurance, also called tenants insurance, is an insurance policy that provides some of the benefits of homeowners’ insurance, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. It provides liability insurance and the tenant’s personal property is covered against named perils such as fire, theft, and vandalism. Renters insurance also covers expenses when the dwelling becomes uninhabitable.
Renters insurance is significantly less expensive than homeowners insurance, which is paid by the owner of the property.
Is Renters Insurance Required by law?
No. Renters insurance is not mandatory or required by law, but landlords or management companies can legally require that tenants have it as terms of a lease agreement.
Many large and medium-sized rental properties include a requirement in their lease that tenants hold renters’ insurance. If the tenant damages the premises, the landlord and other tenants can recover against the perpetrator’s insurance.
A landlord is not financially responsible for a tenant’s possessions or living expenses when there is a fire, a break- in, property damage or other catastrophe. Generally, landlords have insurance aimed at protecting the building in which the tenant lives not the tenant. Many tenants assume the landlord is responsible for the protection and care of their personal belongings. This is not the case.
Types of Renters Insurance Coverage
Before you can compare different renters insurance quotes and choose wisely, It is important to know what type of damages the insurer covers. Essentially, there are three types of coverage available:
- Personal Possessions – personal belongings against damage from fire, smoke, lightning, vandalism, theft, explosion, windstorm, water and other disasters listed in the policy.
Floods and earthquakes are not covered.
- Liability Protection – this type of coverage protects against lawsuits for bodily injury or property damage that you or a member of your family cause to others. Liability also pays for damage your pets cause.
Please continue watching if you have pet or plan to…
- Additional Living Expenses – this insurance policy provides compensation to you when you are unable to live in your dwelling or home due to an insured loss or claim while your home is being repaired.
Types of Renters Insurance Policies
There are 2 main types of renters insurance policies on the market: Actual Cash Value, commonly known as ACV; and Replacement Cost, also known as replacement value or replacement cost value:
Actual Cash Value (ACV) estimates the replacement value of the insured property, then subtracting the depreciation, which is the amount a property has decreased in value since it was purchased, taking into account age, market conditions, and wear and tear.
Actual Cash Value Example – here is a vivid ACV example: a man purchased a television set for $2,000 five years ago and it was destroyed in a hurricane. His insurance company says that all televisions have a useful life of 10 years. A similar television today costs $2,500. The destroyed television had 50% (5 years) of its life remaining. The ACV equals $2,500 (replacement cost) times 50% (useful life remaining) or $1,250.
Replacement Cost pays the actual cost of replacing your possessions, such as a home, with no deduction for depreciation, up to the limit of your policy. Replacement Cost can be up to 10% more expensive than Actual Cash Value coverage.
Replacement Cost Example – “If your home is destroyed by a fire or a tornado and you have replacement Cost insurance, your insurance company will pay for exactly what it would cost to build a new home to the current specifications as the one you lost. This includes using similar building materials…
Your home may actually be worth less than that amount, especially considering depreciation, but the insurance company still would pay what it would cost to build a comparable home.”
Renters Insurance and Pet Owners
A renters insurance policy can provide some protections if you are a pet owner, but it depends.
It is estimated that about one-third of renters in the United States live with a dog. If you have a pet, you should have enough coverage to protect you from being sued in the event your pet causes property damage, injures someone or another animal, another dog for instance.
Renters insurance pays for damages to your rental home and to other people and their possessions if you, your pet or a family member causes the injury or damages. It also pays medical expenses when a guest is injured in your home.
Most renters insurance policies do not cover “exotic pets” such as reptiles, amphibians and ferrets.
Renters Insurance Costs
In the united states, typical renters insurance policy costs about $180 a year, or $15 a month. Those costs can be higher or lower for certain tenants, depending on the location of the rent, having pets or not… For instance, certain dog breeds may increase the cost of your insurance.
Here are some dog breeds that can cause renters insurance companies to increase the price:
- Pit bull.
- Husky or Malamute type.
- German shepherd.
- Wolf-dog hybrids.
- Chow Chow.
- Doberman pinscher.
- Great Dane.
- Saint Bernard.
- Perro de Presa Canario.
- Rhodesian ridgeback.
Reliable Renters Insurance Companies
Here are 13 of best renters insurance companies to consider getting your quotes from:
- State Farm Renters Insurance
- Geico Renters Insurance
- Allstate Renters Insurance
- Jetty Renters Insurance
- Farmers Insurance Group
- Lemonade Renters Insurance
- USAA Renters Insurance
- MetLife Renters Insurance
- Liberty Mutual Renters Insurance
- Travelers Insurance Group
- Nationwide Renters Insurance
- AARP Renters Insurance
- American Family Renters Insurance.
Simple Tips to Save On Renters Insurance Quotes
Although renters insurance is not expensive, it adds up on the expenses. Here are a few tips to help you save on renters insurance quotes.
- Be claim free- you can get up to 20 percent off
- Search around for the lowest disability insurance rates
- Compare policies from different insurers
- Consider Group disability insurance if Possible
- Extend the elimination period
- Change your dog breed if possible
- Increase the deductible
- Decrease policy limits
- Install a fire extinguisher, smoke detectors or sprinklers
- Get a security system installed in your home
- Bundle: buy multiple policies from one insurer
- Pay for the year in advance
- Use automatic payments or paperless billing
- Use marketplace to search and compares quotes
- Quit Smoking – smokers usually pay higher for life, health, and renters or homeowners insurance premiums.
If you have a suggestion or know other tips to save on renters insurance quotes, kindly comment below to share them with our readers.