Shopping for renters insurance feels like reading a foreign language.
Every provider claims to offer you the best value. Every quote has varying numbers. And every policy has pages of fine print that no one wants to read. Renters policies shouldn’t be this difficult to compare.
The good news?
Navigating your options and choosing the right insurance doesn’t have to be complicated. Here’s how to simplify it…step by step.
Let’s get into it.
What’s Inside:
- Why Comparing Renter Policies Actually Matters
- What To Look At In Every Quote
- The Simple Method For Comparing Renter Policies
- Mistakes That Cost You Money
Why Comparing Renter Policies Actually Matters
The majority of renters fail to comparison shop. They see a price quote and take it, sign on the dotted line and never look at rent again. Huge error.
Here’s why:
Recent MoneyGeek research revealed that 45% of U.S. renters aren’t covered by any renters insurance policy whatsoever. This means that almost 50 million Americans are just one accident away from paying out-of-pocket.
And what about renters who actually have coverage? Far too many are either overpaying or underpaying for insurance. Comparison shopping is the only way to know you’re getting a fair rate.
One place that you can start is to see what other renters are paying for similar coverage. Look through the best renters insurance quotes that other renters have posted online. You’ll have an idea of what to expect before you shop around.
Here’s what a solid comparison gets you:
- Lower monthly premiums: by seeing what different companies charge for the same coverage
- Better coverage limits: so you aren’t underinsured if something happens
- Fewer surprise gaps: because you’ll spot exclusions before you sign
- Peace of mind: knowing you picked the right policy at the right price
Pretty simple, right?
Now let’s break down what actually matters when comparing renter policies.
What To Look At In Every Quote
Not all renters insurance quotes are created equal. You can have two quotes that appear nearly identical, but differ greatly internally.
Here are the 4 things every quote must include:
Personal Property Coverage
This is the largest portion. This coverage replaces your belongings if they are stolen or damaged. Laptops, clothing, furniture, TVs, etc.
Typical policies provide from $15,000 to $50,000 worth of coverage. The amount of personal belongings you have will determine how much coverage you need. Take a general inventory of your belongings before receiving any estimates.
Liability Coverage
Liability covers you if someone is injured in your rental. It will also cover you if you inadvertently damage the structure.
Typical limits are $100,000 or $300,000. Going from $100k to $300k often increases your premium by only $18 per year. It’s worth it to get the higher limit.
Loss Of Use
This pays for your hotel and eating expenses if your rental is uninhabitable due to fire or flood. The majority of renters don’t even read this paragraph.
Unless you want to stay in a hotel for a month because a pipe bursts, this is the coverage that will pay for that.
Deductible
A deductible is what you pay before insurance applies. Many policies come with a $500 or $1,000 deductible.
The higher your deductible, the lower your monthly payment. The lower your deductible, the less you pay if you file a claim. Choose what fits your budget.
The Simple Method For Comparing Renter Policies
Now for the fun part – actually comparing renter policies side by side.
It takes half an hour. It could save you hundreds of dollars annually.
Step 1: Set Your Baseline Coverage
Determine exactly what coverage you want BEFORE you view any quotes. Remember the four items listed above:
- Personal property (based on your inventory)
- Liability (usually $300k)
- Loss of use (check what’s included)
- Deductible (pick $500 or $1,000)
Every quote you request should match these numbers. Otherwise you’re comparing apples to oranges.
Step 2: Get At Least 3 Quotes
Never settle for a single quote. Get quotes from at least 3 different insurers.
Renters insurance averages $13/month or $151/year, per NerdWallet. However there can be a wide range in price from company to company for the same coverage.
Popular providers to check:
- Lemonade
- State Farm
- Geico
- Progressive
- Allstate
Step 3: Line Them Up Side By Side
Take out a sheet of paper or open a spreadsheet. List each quote using exactly the same categories:
- Monthly premium
- Personal property limit
- Liability limit
- Deductible
- Loss of use
- Any add-ons (jewelry, electronics, etc.)
Once they’re side by side, the winner usually jumps right out.
Step 4: Read The Exclusions
This is where everybody fails to read. Every policy has exceptions – what it will not pay for.
Common exclusions include:
- Floods
- Earthquakes
- Bed bugs
- Certain dog breeds
- High-value items above a limit
Should you own costly possessions or live in a high risk area, you may require an endorsement. Inquire about these prior to purchasing.
Mistakes That Cost You Money
Compare rental quotes and still end up burning? Here are the biggest mistakes to avoid when comparing renter policies.
Going for the lowest quote: Cheap isn’t always good. A policy that costs $10 a month but doesn’t cover water damage is no good when a pipe bursts.
Actual cash value vs. replacement cost: Replacement cost will cover what it costs to purchase a new item. Actual cash value covers what your used item is worth (much less). Always opt for replacement cost whenever possible.
Company’s reputation: Buying a policy from a company with poor claims service is like setting yourself up for disaster. Do your research!
Neglecting to update your policy: Purchase a new laptop? Moved into a new apartment? Update your policy to cover these new items. Your policy from two years ago likely doesn’t cover your new belongings.
Bundling blinders: Getting renters and auto insurance from the same company can save you money. But it’s not a guarantee. Get separate quotes as well and compare.
Bringing It All Together
Shopping around for renter policies can be painless. When you know what to look for, it’s quite simple. Let’s review quickly:
- Set your baseline coverage first
- Get at least 3 quotes for the exact same coverage
- Line them up side by side to spot the winner
- Read the exclusions before you sign anything
- Watch out for common mistakes that cost money
The reality is – most renters are either paying too much for insurance they don’t need or paying too little and leaving themselves open. A little research now can prevent big headaches down the road.
Spend 30 minutes today working through the comparison above. Your future self will thank you when something goes wrong and you actually have coverage.
