How to Compare Renters Insurance in Just 10 Steps to Find the Right Policy
Comparing renters insurance plans, terms, and coverage limits can seem like a daunting task, but renters can find the right amount of protection for their needs in just a few simple steps.
After going through the process of finding a new apartment or rental property, it’s tempting to focus solely on settling into your new home. But your belongings could be at risk without rental insurance. If your possessions are destroyed, damaged, or stolen, renters insurance could help you recoup losses and pay for replacements. Some landlords may even require tenants to obtain renters insurance as part of the terms of their lease.
With so many policies, coverage options, claim limits, and providers to comb through, finding the right renters insurance can seem just as daunting as landing the ideal apartment or rental home. However, it’s worth taking the time to compare policy terms and limits so you’re not paying out of pocket for any losses or damages that might occur during the term of your lease. Fires, some types of water damage, and theft are all commonly covered by renters insurance, giving tenants a sense of security. Learn how to compare renters insurance options and find a policy that delivers the terms and coverage you need.
Before You Begin…
Many tenants who purchase renters insurance do so solely to cover the cost of damages or replacement if their possessions are destroyed by covered events, but there are other perks to consider. Renters insurance companies frequently offer personal liability coverage if the policyholder is the one who causes damage—for example, if you start a grease fire in the kitchen or accidentally break a window while tossing around a football in the courtyard. Without renters insurance, you might be required to forfeit your security deposit to pay for any repairs to the building or unit.
Liability coverage can also come in handy for pet owners in the event their dog or cat damages the property or harms another person. If you’re worried about your dog potentially biting a neighbor, renters insurance liability coverage can be very helpful in paying for any resulting damages.
When comparing renters insurance options, it’s typically recommended that tenants get a few quotes from different providers. Policies can vary significantly regarding what specific events and types of belongings are covered, as well as the amount of money you can claim. The more information you gather, the more precise your selection can be.
STEP 1: Gather your personal information and details about the rental property.
You’ll need to provide insurance companies with some up-front information about yourself and the rental property to get the most accurate renters insurance quotes. Collect these details so you can quickly submit them and start to compare renters insurance rates. Insurance providers often only require basic personal information from applicants: your name, any roommates you have, pets, and expensive valuables that may not be covered by a standard policy.
In some cases, insurance companies may also want to know more about the rental property itself, including the location, build year, proximity to the nearest fire station, and any security systems installed on the premises. It may seem excessive, but this additional information could be required to help insurance companies accurately gauge how much risk you’ll be exposed to and then estimate how much your renters insurance will cost.
STEP 2: Take inventory of your personal belongings.
Before contacting insurance providers, take stock of your personal belongings and create an inventory of every valuable item you own. Estimate how much each item is worth and catalog it. Try to be as thorough as possible; individual possessions may not seem like they’re worth all that much on their own, but they can add up when taken as a whole. For instance, a single shirt may not be particularly valuable, but your entire wardrobe could be worth hundreds if not thousands of dollars. Taking this step can set a baseline expectation of what needs to be covered by renters insurance and how extensive your policy should be to get fully compensated if anything is damaged or lost in a covered event.
It’s also a good idea to note belongings that may not qualify for coverage. Insurance providers may exclude or heavily limit the amount of coverage provided for artwork, jewelry, and other valuables.
STEP 3: Calculate the appropriate amount of renters insurance coverage for all of your possessions.
After cataloging all your belongings, you can get a rough idea of how much renters insurance you’ll need. Take the total value of every item in your inventory to see what your minimum coverage should look like. One point to keep in mind when shopping for renters insurance is whether the coverage offered is for actual cash value or replacement cost. For instance, a computer that was purchased for $2,000 several years ago may now only be worth $1,500. In that scenario, if the insurance policy has replacement cost coverage, the policyholder would be reimbursed for the cost of a comparable computer at today’s prices. On the other hand, if the insurance policy has actual cash value coverage, the policyholder would receive the depreciated value of the computer, not the cost to replace it. Furniture, in particular, can depreciate relatively quickly, so keep that in mind when calculating your coverage needs. When assessing your belongings, try to take sentimentality and emotion out of the equation and review your inventory with clear eyes to avoid overpaying for coverage that you won’t be able to use.
STEP 4: Get and compare quotes from multiple providers—and keep your coverage limits consistent.
Getting renters insurance quotes can largely be done online, letting tenants compare renters insurance rates with relative ease. While insurance providers weigh a variety of factors to set their rates, coverage limits will likely take precedence over all other considerations. As such, any change made to your requested limits when comparing online renters insurance quotes could return very different rates. Be sure to keep your coverage limits and deductible preferences consistent as you reach out to providers for renters insurance quotes.
The same principle applies to the personal and property information you provide. If you tell one insurance company the rental property has a security system, but leave that detail out when contacting another provider, you could be quoted different rates even if all other information is consistent.
STEP 5: Comb through the coverage levels and policies offered.
When conducting a renters insurance quote comparison, it may be tempting to simply pick the cheapest renters insurance available, but there’s a lot more to consider with your selection. First and foremost, how much coverage is provided, and will it be enough to replace all of your possessions if they are damaged or stolen?
You might also want to include the specific coverages in your renters insurance comparison and check to see exactly what scenarios are covered. For instance, many renters insurance agreements include liability coverage in the event your dog causes property damage or hurts another person or pet. However, that coverage may exclude certain dog breeds, so you’ll want to consider such conditions if they apply to you.
Inquiring about living expenses policies may be a good idea if you’re interested in adding extra coverage to your policy. In the event that you need to find other living arrangements—say, if a fire severely damages your unit and renders it uninhabitable—your renters insurance policy may cover some of these costs or even pay them in full.
STEP 6: Check that the coverage limits meet the value of your possessions.
With a detailed inventory of your belongings in hand, you should have a baseline amount to reference when reviewing coverage limits from different insurance companies. Some providers may set flat coverage limits for particular types of valuables. For instance, their standard renters insurance policy may only cover jewelry or artwork up to $1,500, regardless of the true value of those items.
Consider treating your inventory as a baseline for the amount of coverage needed. Renters can safely assume that they will accumulate more belongings like clothes, furniture, and electronics during their lease. As such, you may want to consider a higher coverage limit to cover any future purchases. Giving yourself more breathing room with your policy can help avoid hitting your maximum coverage limit before you have recouped the full value of your lost or damaged belongings.
STEP 7: Consider bundling multiple insurance policies for a better rate.
Insurance providers frequently offer discounts to policyholders who bundle two or more policies together. If you’re in the market for auto insurance, pet insurance, or life insurance, you may get a better rate by picking a bundle over individual plans. The size of the discount will depend on the insurance company, and some may not provide enough financial incentive to make bundling policies worth your while.
While cutting your insurance costs is always enticing, avoid taking out insurance policies you don’t really need just for the sake of saving money on a bundled policy. Bundling renters insurance makes the most sense when tenants combine policies they would have purchased anyway—just at a lower rate.
STEP 8: Read customer reviews to be aware of clients’ satisfaction with their policies and the service.
Rates, coverage, and limits are all valuable factors to consider when vetting insurance companies, but customer experience can be just as impactful. Knowing that you can easily reach an agent and resolve any policy or coverage issues could be worth more to you than a low insurance rate.
Reading online customer reviews is often a good way to glean which renters insurance companies offer the best experience and leave customers feeling satisfied. Look at comments from other customers to see if they’re happy using a particular provider to get a sense of what you can expect if you sign up for a policy of your own.
STEP 9: Reach out to a representative if you have any lingering questions about your policy and coverage options.
Every step outlined up to this point can be done completely online and from the comfort of your laptop, smartphone, tablet, or PC. But there may be some outstanding questions or points of confusion you would like to clear up before making a final decision. When you’ve exhausted all digital and online options, it could be time to speak to an actual person to get those last details ironed out.
Even if you’ve already identified the insurance provider and policy terms you want to use, it may be worthwhile to reach out to a representative to verify policy details before agreeing to any terms. This last bit of due diligence can help you decide between two comparable options and zero in on the right renters insurance plan for you.
STEP 10: Choose the renters insurance company and policy that fits your needs.
You’ve done your research, compared renters insurance options, and narrowed down your list of candidates to the best renters insurance company for your circumstances: You’re ready to select an insurance provider that meets your rate, coverage, and policy needs. In many cases, insurance companies allow customers to apply online, so you could complete the entire application and enrollment process without even picking up a phone.
Shopping for renters insurance may not seem like the most pressing concern after moving into a new rental home, but it can make a financial difference if an emergency arises. Without renters insurance, you could be left paying out of pocket for the costs to repair or replace belongings that are destroyed, damaged, or stolen during your rental period. Renters insurance may be worth purchasing for peace of mind alone.
Because insurance providers and policies can vary so much when it comes to the details—rates, coverage limits, and covered perils—taking the time to compare renters insurance quotes can help you make sense of all your options and lay out the pros and cons of each provider and policy. With those insights, you can make a more informed decision to secure the right plan for your circumstances.