How to Get Renters Insurance: A Complete Guide

Moving is expensive and stressful enough already. The last thing you want is to unpack everything only to deal with a kitchen fire or a break-in a few weeks later.

Without renters insurance, replacing your furniture and other belongings could get really expensive. And though no state requires renters insurance for tenants, many landlords now require you to show proof of a policy before handing over the keys.

So here’s how to buy a policy online in less than 15 minutes, the information you’ll need, and how to choose the right coverage for your situation.

Step-by-Step Guide on How to Get Renters Insurance

Getting renters insurance isn’t as complicated as it might seem. Follow these steps to protect your belongings.

Step 1: Take a Home Inventory & Assess Your Needs

Before you start shopping for renters insurance, take an inventory of your space so you know what coverage you actually need. Start by documenting your personal belongings by room and category, then researching the replacement costs for each item. After you’ve accounted for all your belongings, add up the values to determine the total estimated value and coverage amount.

Step 2: Choose Your Coverage Types and Limits

Once you have an idea of how much your stuff is worth, your next step is to choose the type and amount of coverage you need. Renters insurance policies typically include personal property coverage, liability protection, additional living expenses, and medical payments to others.

The amount of coverage you need is based on the value of your personal belongings and the level of liability coverage you want. Typically, the higher the coverage, the more expensive your policy will be.

A deductible is the amount you pay out of pocket before your insurance coverage kicks in. And generally speaking, choosing a higher deductible lowers your monthly premium, and vice versa.

Step 3: Decide Between Replacement Cost vs. Actual Cash Value

Another important thing you must know before buying renters insurance is the difference between a replacement cost policy and an actual cash value policy.

Actual Cash Value

Actual cash value coverage pays you the items' current value and accounts for depreciation and wear and tear when settling a claim.

For example, if your eight-year-old 1,000 because of depreciation and your deductible. Since ACV policies result in smaller payouts, they typically come with lower premiums compared to replacement cost value policies.

Replacement Cost Value

Replacement cost coverage pays to replace your belongings with similar new ones. In other words, it doesn't consider the item's depreciation or wear and tear.

Using the same example as above, your payout should be around $1,500, so you can replace your couch with a brand-new one of the same make and model.

Step 4: Gather the Necessary Information

Most insurance providers will need information about your rental situation and personal belongings to give you an accurate quote. So have all the necessary information ready before heading over to the insurer's website to request a quote.

You'll need to know your rental address, the number of units in the building, the total value of your personal property, and whether your unit has safety features.

Step 5: Compare Renters Insurance Quotes

Get multiple quotes (at least three) from different insurance providers so you can see which company offers the best deal. And don't forget to read online reviews from previous customers to check for complaints about the claims process, payout delays, or poor customer service.

You’ll also want to check the company’s financial strength via rating agencies like A.M. Best, Standard & Poor's, or Moody's. Having poor ratings from these agencies means the company could have trouble paying out claims.

Step 6: Finalize the Policy and Provide Proof to Your Landlord

After finalizing the policy, you can usually make your first payment and activate your coverage within a day. After that's done, you can request your renters insurance declaration page. This document shows your name, your policy number, and coverage details so you can send it to your landlord as proof.

Note that some landlords will want proof directly from your insurer. In that case, ask your insurer to send a letter or email confirming your policy is active.

How Much Does Renters Insurance Cost?

The average annual rate for renters insurance in the U.S. is about $171, or around $14 a month, according to the Insurance Information Institute's most recent data.

That said, the exact amount you’ll pay depends on your location, coverage limits, deductible amount, as well as your credit score and claim history.

What Information Do I Need to Get a Quote?

Here are some of the most common details insurers may ask for:

• Your apartment's address
• How many units are in the building
• The building's year of construction
• Security and safety features, such as smoke detectors and burglar alarms
• Your history of past insurance claims
• Whether you own a dog and, if so, the breed, since some breeds can affect liability coverage or pricing

Some insurers will also ask about your desired coverage limits, deductible amount, and whether you want to bundle renters insurance with another policy for additional discounts.

Frequently Asked Questions

Does my landlord’s insurance cover my personal belongings?

No. Your landlord’s insurance generally only covers the building and not your personal belongings inside the unit.

Do I need renters insurance if I have roommates?

Yes. Even if you have a roommate, you'll want to have your own renters insurance policy so your personal belongings and liability coverage stay separate.

How much renters insurance do I actually need?

It depends on how much your belongings are worth and how much liability protection you want. $100,000 in liability coverage is a pretty common starting point, but you might need more depending on your situation.

Conclusion

Without renters insurance, you may have to shell out thousands of dollars to replace your personal belongings against perils like fire and theft. So even though renters insurance may cost you an extra $14 a month, it can save you from a much bigger financial hit later on.

So if you’re planning to move soon, start comparing renters insurance quotes now so you can settle into your new place knowing your belongings are protected.