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Renters Insurance: Protect Your Belongings

What Is Renters Insurance? 

Just as auto insurance protects you financially if your car is involved in an accident, renters insurance is designed to protect you when the worst happens at home — a break-in, a natural disaster, or even a guest hurting themselves while on the property. 


What Does Renters Insurance Cover? 

Most renters insurance policies provide coverage for the following: 

  1. Damage or theft of your personal property. Most policies will reimburse you if any of your declared personal property is damaged or stolen, even if it happens outside of your home. This means if your new smartphone is snatched while you’re visiting home, you’ll still be covered. Of course, your policy will also cover your personal property in the event of a break-in or covered natural disaster, such as a fire.
  2. Reimbursement for expenses incurred during a temporary relocation during repairs to your home. If your home is damaged by a covered disaster or otherwise becomes unlivable (a pipe breaks, your roof caves in, etc.), your policy will usually reimburse you for hotel stays, restaurant meals, and other expenses related to your temporary relocation while your landlord is repairing the issue. 
  3. Liability insurance. People in the US love to sue each other. Did you know, for instance, that if a thief hurts himself in the process of breaking into your home, you could be held liable for his medical bills? More broadly, you could be found liable for damage to anyone who has an accident on your property — your friend slips and hits his head, or your dog bites your neighbor. Rental insurance will protect you from such lawsuits by covering your legal fees as well as any payouts awarded to the person who sued you. 

Be sure to read the fine print of your policy! Many policies don’t cover damages incurred by earthquakes or floods, for instance. 


Do I Need Rental Insurance? 

Some landlords will require tenants to take out a renters insurance policy. However, this is fairly uncommon, so for most, this type of insurance is completely voluntary. It is up to you to decide whether you want to risk going without coverage. Still, since policies generally cost around $15 per month, it’s usually a good investment. 


How to Get Renters Insurance

The biggest providers of rental insurance include Allstate, State Farm, Farmers, Progressive, and Geico. You can get a quote online from these providers in minutes, making it easy to compare offers. You could also choose to work with an insurance broker, but they will charge you a commission fee. However, if you decide to compare your options, be sure to evaluate the details and costs of each policy to find the best fit. 

When evaluating policies: 

  1. Decide the amount of coverage you want. The more your personal belongings are worth, the more coverage you will need. Tally up the value of the items you would like covered by the policy. 
  2. Decide the type of coverage you want. If you live in an area that floods often — New Orleans, for instance — you’ll want to look for a policy that covers such an event. 
  3. Consider the deductible. This is the amount you will have to pay before you are reimbursed for your stolen or damaged property. Generally, the higher the deductible, the lower your monthly premium, and vice versa.