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Renters Insurance: Cost and Tips on Buying

Last time we moved, I made a bonehead mistake: I forgot to buy a new renters insurance policy. We got lucky and had no uninsured losses, but for somebody who spends his time writing and thinking about personal finance topics, you’d think I would know better!

Regardless, the process of shopping for renters insurance is worth discussing.

How much does renters insurance cost?

Short answer: Not much.

The exact cost will naturally depend upon how much coverage you need, whether you’ve had losses in the past, where you live, what type of safety features your residence has, and so on. Our own policy provides coverage for $19,000 of personal property for an annual premium of just $100.

Note: It’s worth shopping around. Some of the quotes we received were more than twice as high for coverage that was no better.

Get the Right Amount (and  Types) of Coverage

Most renters insurance policies have limits on the amount of coverage they’ll provide for specific types of property. For example, a policy might provide $15,000 of coverage, but only cover $1,000 of jewelry. If you need more than that, you’ll have to increase the jewelry coverage specifically rather than just increasing the amount of total coverage.

When you’re shopping for quotes, be sure that you’re comparing apples to apples. The policy that initially looks cheapest may not be the best once you realize you’ll have to add more coverage for jewelry, personal computers, and so on.

Also of note: Most policies don’t cover earthquakes, landslides, or floods. If those are significant risks where you live, you’ll need to purchase separate coverage specifically for the sake of insuring against them.

Where to Shop for Quotes

There are several websites that allow you to enter your information and receive quotes from various companies. I tried two such sites and wouldn’t recommend either of them for two reasons:

  1. The quotes provided are unofficial (meaning that in the end, you need to contact the insurance company directly to get an official quote), and
  2. They give out your contact info to insurance reps with several companies. (Forgive me for not thinking this is a valuable service…)

Instead, I’d shop directly with the insurance companies–State Farm, Allstate, Esurance, and GEICO, would all be good places to start.

Be sure to read your policy.

After you purchase a policy, the insurance company will send you a paper copy in the mail.

Be sure to read it.

If your policy doesn’t cover something that you expected it to, better to find out now rather than later. (Note: I’m not talking about reading the glossy brochure, though you can read that if you want. I’m talking about the boring, legal-looking document that’s printed on pages that look like they came from a Bible.)

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Comments

  1. Mike,

    Renter’s insurance is a bit of a hassle because most of the insurers I tried applying to ask ludicrously specific questions– for instance, I just looked at what Geico says I need before I can get a quote.: https://homeowners.geico.com/homeowners/renters_quote_info.htm

    I’m apparently supposed to take a tape measure and find out exactly how far I am from the closest fire hydrant, then figure out how close the closest fire department is, THEN figure out which fire department is my actual “responding” fire department, what kind of material my apartment building is made out of, and on and on. That seems like a lot of hassle, and what happens if the information I supply is wrong? I ended up going with Assurant, pretty much solely because they didn’t ask too many questions, the rate and policy details seemed reasonable, and I just wanted to move on with my life. The crazy thing is that my lease requires me to have renter’s insurance, but the landlord didn’t have the relevant information either (this is apparently something he doesn’t really care about, as he never asked me for proof of renter’s insurance). Is there a better way to handle all this?

  2. Unfortunately, no, I don’t have a way around these questions. The company I ended up going with didn’t require “feet to closest fire hydrant” but did want to know about the building, its age, and the material it’s made from.

    Luckily, our landlord was happy to provide the information.

  3. @Lance: Unfortunately, those are the same questions that I had to answer for my homeowner’s insurance. A reputable, local insurance company or agent should know most of this information or could accurately estimate it for you.

  4. Important info…especially for young people. They think sometimes they don’t have enough to insure.
    My second night in our apartment after getting married we stood with our neighbors in the parking lot watching a fire and wondering whether it would spread. We mentally went through our meagre belongings and realized it would cost a bit to replace them.
    The next day the insurance agent was knocking on everybody’s door and needless to say we signed up realizing that we had luckily dodged a bullet.

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