Renters insurance is interesting - especially if you live in an apartment. Nobody ever tells you about it, but some landlords require it.
Does it make sense to get apartment renters insurance? How much does it cost? Will I ever need it? What else does it cover.
Here's everything you need to know about apartment renters insurance and where to find the best deals.
What Is Renters Insurance?
You probably know that homeowners have home insurance to cover damage to their house and the contents inside. But what about people who rent apartments? After all, someone else might accidentally start a fire in one apartment that ends up burning down the whole apartment building. In that case, you had nothing to do with the fire. That’s where renters insurance comes in.
Renters insurance is also called personal property or personal articles insurance. Since you don’t own the apartment, it isn’t insured by a renters policy. Only your possessions in the apartment are insured. This makes rental insurance extremely affordable.
Because the cost is so low, there’s really no reason not to insure your items. In case you’re wondering, the landlord has the building insured, which is not anything you need to worry about.
What Should I Look for in the Best Apartment Renters Insurance?
You want an affordable deductible and to be sure that the insurance will cover your most valuable items. When considering a deductible, it should be far less than the deductible of health insurance, which is usually a few thousand dollars. $500 is a common deductible for renters insurance, but this will vary depending on your plan.
When thinking about your most important possessions, think in terms of value. A laptop is probably one of the higher-valued items in your apartment. If you have a big-screen TV, that can be added to the list as well. Jewelry is another great set of items that should be covered. Depending on the value of the jewelry, you may have to go with a more expensive plan. Whether the additional monthly fee is worth it depends on how much you value the jewelry.
How Much Does It Cost?
You can find renters insurance for $5 or less per month. These policies will be on the smaller side. A good rule of thumb is $5,000 of coverage for every $5 per month in premiums. If you go with $20,000 of coverage, you can expect to pay around $20 per month.
If you have a $20,000 policy and opt to take the $1,000 deductible instead of $500, that can lower your monthly premium.
Insurance Companies That Offer Low Rates
The following are a few insurance companies that offer renters insurance for $5 or less per month. Note that some companies require that you have auto insurance with them to get the lowest renters insurance rates.
- $5/month: Allstate Renters Insurance
- $5/month: Lemonade Renters Insurance
- $5/month: AAA Renters Insurance
- $5/month: Assurant Renters Insurance
- $5/month: ePremium Renters Insurance
- $5/month: USAA Renters Insurance
If the above rates require that you include your auto insurance as part of an auto/renters insurance bundle, have your existing auto insurance coverage available so you can compare rates and see if the new insurance company is offering a better deal with the bundle.
Is It Worth It?
There’s no denying that if you have a few thousand dollars worth of valuables and they are lost in a fire or stolen from your apartment, you’ll be out those items. Renters insurance protects your valuables in those cases. Consider what most renters insurance policies cover:
- Theft — ensure the policy covers theft from your unit and theft anywhere you are, like a coffee shop.
- Smoke damage.
- Lightning damage.
- Discharge of water — for example, if the fire sprinklers go off accidentally.
You aren’t likely to find a policy that has flood insurance. In fact, flood insurance is even difficult for homeowners to get. You might think flood insurance is only for people on the first floor, but living in an apartment creates unique scenarios. If the person above you leaves the water running while they run out for groceries, it will not only flood their apartment, but yours too. See if your policy protects against something like that.
Also, check if wind-driven rain is covered. For example, one of your bedroom windows blows out from high wind or is broken from a projectile, allowing rain to blow into the room, ruining all of your electronics.
Some policies will pay for a hotel room if your apartment becomes unusable. If you don’t have any friends or family nearby that you can stay with, certainly consider this kind of coverage. It will usually only be for a certain number of days. Compare insurance companies to see who offers the longest hotel stay at the cheapest rate.
Another coverage to consider is liability. If someone burns themselves on your stove or your dog bites them, they may end up with some expensive medical bills, which they’ll want you to pay. Try to get liability insurance added to your policy.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.