Is Renters Insurance Worth the cost?

These 4 things covered under renters insurance can save you money

Some renters might think that everything they have inside their apartments is insured under the landlord’s policy; that only covers the building itself. What happens if your apartments get burglarized? Or, worse yet, what if it suffers fire or smoke damage.

Most insurers provide renters insurance that is crafted to fit the specific needs and wants of tenants. Typically, renters insurance has not been as famous as homeowners’ insurance; however, it should be since your property and financial well-being are essential.

Before you buy a renters policy, ensure you understand what these plans really cover and how they can protect you against the risk. Moreover, there are some key differences compared to homeowners’ insurance that can assist save you money in premium payments and bigger claim payouts.

What does renters insurance cover?

Let us look at several things renters insurance policies may cover.


Renters insurance often includes liability coverage, which protects you if someone injures themselves at your apartment or house. It will assist compensate them for their medical bills or other related costs, and also aid covers your legal expenses if the injured party sues you.

Personal property

Renters insurance policies cover your personal belongings and replace them if you are the victim of storm damage or fire or theft.


Renters insurance policies often cover temporary accommodations if you are forced to move out during repairs due to fire, water, or smoke damage.

Additional riders

A rider is something you include in an existing policy, often to cover a specific valuable item, like a piece of jewelry, bicycle, art collection, or snowmobile. For instance, your renter’s insurance might only cover $2,000 in jewelry; however, you might have a piece worth $5,000 alone. In this situation, you would want to add a rider to cover that particular piece of jewelry.

How to choose the best renters insurance?

When you are looking for the best renters insurance, you have to find a policy within your budget that provides the coverage you require. When researching an insurance provider, as the following questions:

  • What add-ons do you provide, and how much do they cost?
  • What does the basic policy cover?
  • How much is the deductible?
  • How much is the monthly premium?

What is the cost of renters insurance?

Following the National Association of Insurance Commissioners, a renters insurance premium is between $15 and $30 monthly. Your costs are based on the location and size of your apartment or house, and how much your possessions are worth. Here are factors that could impact your renter’s insurance cost.

Replacement cost

When you design your policy, you will choose the actual cash value or placement cost value or policy. A replacement cost plan will reimburse you for the amount of money you paid if your property is damaged. In contrast, an actual cash value policy takes depreciation into account and will pay for your item’s market value.

While you can save funds on your policy by going with actual cash value, you will pay the price if and when you claim your renter’s insurance.

Previous claims history

Insurance providers will look at your previous claims history to evaluate how much you will pay for your policy. If you have a record of filing a lot of claims, there is a possibility you will pay more money than someone who has insurance but rarely files a claim.

Your credit score

Insurance companies use aversion of your credit score to evaluate your renter’s insurance premium. Provided you have a bad credit score; insurance providers see you as more likely to file a claim or even miss a payment to pay more money.


Similar to most kinds of insurance, renters insurance has a deductible. If you sign in for a high-deductible policy, you will pay less monthly but will pay more out of pocket when you place a claim. Similarly, a low-deductible policy indicates you will pay more for your monthly premiums but will not have to splash out at the time of a claim.

Amount of coverage

With renters insurance, you can determine how much coverage you need. Generally, the more coverage you need, the more expensive your premiums will be.

The best way to identify how much coverage you require is to take inventory, and of your personal belongings and how much money they are worth so you will know how much it would cost you to replace them in case of a disaster.


Your location will have a great impact on how much you pay for renters insurance. For instance, if you live in a community with low crime rates, your premiums will be lower. However, if you live in a high-crime region, you will possibly pay more.

Similar to living in an area that is not prone to natural disasters, you will pay less for renters insurance. Nonetheless, if you live in a high-risk area, such as a low-lying state that is prone to hurricanes, flooding or tornadoes are common, your insurance will be more costly.

Renters insurance versus homeowners insurance

The only actual difference with a renters insurance policy is that it rigorously covers the renter’s personal property and liability inside the apartment unit. The rest of the building- the furnaces, plumbing, foundation, fixtures, roof, the walls, and any appliances that are not owned by the renter- are all part of the landlord’s policy.

While most renters focus on the relative value of their possessions when choosing renters insurance, what they really should hone in is the threat of visitors or neighbors filing lawsuits after getting injured in the renter’s apartment. Or, another person’s property might be damaged when they bring it to your home.

6 Hacks to save money on your renters insurance

Regardless of what company you choose for renters insurance, it is worth doing some research to check how you can save even more on your monthly premium. Below are some common ways to save money.

Request for professional discounts

Most insurance companies provide discounts to military members, nurses, first responders, and teachers. It is worth requesting if your profession qualifies you for any discounts when you collect insurance quotes.

Bundle your insurance policies

Similar to the way you can save money by bundling internet and Television, you can save by bundling your insurance. Most insurance providers offer discounts when you sign up multiple policies through them. Consider getting renters insurance via your auto insurance provider or getting quotes for both kinds of insurance to check if you can save.

Set up auto-pay

You could get a nice discount on your renters insurance by setting up an automatic monthly payment. Insurance providers such as auto-pay since it pretty much assures you will pay your bill, so they are likely to provide you a lower premium.

Improve your credit score

Consumers with lower credit scores are more likely to pay higher insurance premiums. If you can get your credit score up to an excellent or good rating, you can see your premiums drop.

Request for a claims-free discount

Request your insurer if you qualify for a discount after being claim-free for a certain period. This could assist decrease your overall renters insurance cost.

Look for safety discounts

Request prospective renters insurance companies if they provide discounts for safety equipment, such as deadbolts, security alarms, and fire extinguishers. Of course, if your rental does not already have these items, you will need to check with your landlord before installing them.

Why is renters insurance important?

Renters insurance is frequently one of the most under-utilized insurance products in the industry. Most renters do not consider renters coverage since it has not been made mandatory by the state. This is the same situation for auto insurance (and will be soon under Obamacare), or by creditors, who often make homeowners insurance a non-negotiable part of mortgage agreements.

However, as you know by now, the costs for premiums are comparatively low, as the barriers to entry. It would only take one burning candle to be knocked over in one unit to impact a lot of people in an apartment. With so many neighboring tenants, your capacity exposure to lawsuits is staggering high. Living without the protection of a renters plan may become an error you cannot afford to make.

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