A Guide To What is Renter’s Insurance?

People who own a house buy homeowners insurance to protect their property and belongings. Homeowners insurance also covers accidental injuries to the visitors if they suffer injuries while visiting your home. But what about the people who live in a rented house. For them, there is renter’s insurance. It protects the interest of a person who is living in a rented apartment. This article is going to help you to understand the renter’s insurance, how to get it, and what kind of coverage it provides if you buy a policy.

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Why do you need a renter’s insurance?

It is a type of insurance policy that protects a person who is living in an apartment by paying rent. If someone breaks in your house and steals some valuables then the landlord’s homeowner’s insurance is not going to give you coverage. Suppose you are throwing a party and someone injures himself and sues you then what will you do? For this kind of situation renter’s insurance comes to the great help of the tenant. If you have it then it will give you coverage from burglary, accidental insurance, and protect your belongings from theft, fire, etc.

A renter’s insurance is the cheapest and easiest insurance policy that you can own. Nowadays many homeowners want their tenants to have this kind of policy while renting their apartments.



What does a renter’s insurance policy cover?

The type of coverage you can get from a renter’s insurance policy are:

  1. It protects your belongings if there is fire, electrical, and plumbing malfunctions, etc.
  2. If there is a riot in your neighborhood and it damages your property then the renter’s insurance is going to cover for your losses.
  3. If there is a case of theft in your house and the thief steals valuables from your house then the insurance policy is going to cover for your losses.
  4. Also, if you have this policy and the place where you are living needs repair works and you have to move out of there and live somewhere else for a certain period. Then renter’s insurance policy will pay for the extra cost that you have to spend. It will pay for the transportation and the rent of the temporary house.
  5. Renter’s insurance also gives you liability coverage. Someone who is visiting your place injures himself due to a bad fall in your apartment he may sue you. if he does then the renter’s insurance policy will cover for the court cost and will help you to settle the matter.



Types of renter’s insurance policy

There are two types of renter’s insurance policies available in the insurance sector. They are Actual Cash Value and Replacement Value.


1. Actual Cash Value:

In Actual Cash Value Insurance, the Insurance Company is going to pay for your losses in Actual Cash Value. They will calculate the value of the properties at the time of loss. They will deduct the depreciation factor and then pay you the money. It is usually lower than the original cost of the property.


2. Replacement Value:

In this type of renter’s insurance, the insurance company pays the amount that you need to replace your stolen or damaged item. You can get a brand new item if you chose this type of policy.

The cost of Replacement Value policy is higher than the Actual Cost policy. But in return, you also gain more.



Things to do before buying a Renter’s Insurance Policy

Before buying a Renter’s Insurance Policy there are certain things you need do.

  1. Photograph or video record of the belongings. You may not need it at the time of purchasing the insurance policy but it will help you if you have to make a claim.
  2. You can also make a spreadsheet that contains the list of the items and their cost. It will help in estimating your total asset so that you don’t under-insure your property.
  3. Keep your documents in a safety deposit box and store it in a bank locker so that the document doesn’t burn if there is a fire in your place.



Cost of Renter’s Insurance Policy

Renter’s insurance policy is very low when you compare it with the house owner’s insurance policy. The rate of insurance policy changes from state to state. The renter’s insurance in Oklahoma is lesser than it is in New York. But there are certain steps you can take to lower down your policy rate. They are:

  1. Installing safety equipment like a fire alarm, burglary alarm, fire extinguisher, sprinklers, etc.
  2. You can also get a discount if you are already a customer of the insurance company. If you have auto insurance or other insurance policy with the company, the insurance company may give you an additional discount when you try to purchase a renter’s insurance.
  3. If you choose a higher deductible it will help you to lower down the rate of premium. So chose deductible accordingly. Also if you can manage a few things on your own there is no need to claim for small losses.

Read Also: Complete Guide to Fire Insurance and its Benefits!




So to sum up the discussion we can say that there are many types of insurance companies available in the market that provides renter’s insurance policy. You can tally the rate of the insurance premiums online or you can ask your insurance agent for a quotation. After reading the policy papers choose the company which is providing a better deal. Don’t go for cheaper rates to buy the policy which is not giving you good coverage.

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