How Much Renters Insurance Coverage Do You Need?

 Post by Azibo Team on October 24, 2022

No one can predict accidents or emergencies — but renters can protect themselves and their belongings with the right renters insurance coverage. Here’s how to determine the right amount of coverage for your needs.

Unlike homeowners or landlord insurance, renters insurance offers a layer of financial protection unique to tenants, or those who are temporarily renting an apartment, condo, home, or other living space. This includes protecting yourself and your belongings from fire and smoke damage, vandalism, theft, or even some weather-related incidents —even if they aren’t located in the residence you’re renting

With so many carriers and policies to choose from, it can be overwhelming to determine the right one, and decide how much renters insurance coverage you need. The good news? Renters insurance is relatively inexpensive — with the average cost in the U.S. coming out to $179 per year, or $15 per month.

Here, we'll explore what renters insurance covers, why you need it, and seven tips to help you find the right renters insurance coverage at the right price.

What does renters insurance cover?

While renters insurance coverage tends to vary by carrier, most standard policies cover the following:

  • Personal belongings: From clothing and jewelry to electronics and furniture, renters insurance offers financial protections for your personal belongings if they are damaged or stolen in a covered claim. That said, this typically doesn’t include your car (though it can include personal belongings inside your car).
  • Repair expenses: In the event that your rental is unfinished, unsafe to live in, or undergoing repairs, most renters’ insurance covers hotel stays, restaurant meals, and other expenses to hold you over as you wait for your rental unit to be habitable.
  • Liability or damage to the property: If an accident occurs on the rental property and you’re responsible for injuries or damages, most policies offer a minimum of $100,000 in liability coverage. Keep in mind that in most cases the tenant and their regular household residents are NOT covered. However, guests and individuals allowed on the premises with permission are covered barring an exclusion in the coverage.
  • Medical payments: In the same vein as liability, many policies also offer coverage in the event that someone else gets injured on the property — depending on the fault of the injury. An example of this scenario is if you have a friend over and they fall and injure themself — this incident on its face should be covered. However, if you have a friend over and they fall and injure themselves while under the influence of a non-prescribed drug, this is more than likely excluded from coverage. In any case where coverage is valid, the renter policyholder would make the claim in order to cover the associated medical expenses or legal liabilities.
  • Some weather-related incidents: If you experience damage from fire, smoke, lightning, hail, or a windstorm, your policy usually offers some protection. However, larger weather incidents like floods, earthquakes, or landslides are typically not included, unless you obtain a separate policy or the optional endorsement when available.

While these are the most common types of coverage, renters might also opt for add-on policies. This includes protections in the event of bed bugs or pest infestations, extreme weather like earthquakes and hurricanes, or pet-related damage. For example, if you own a dog that damages the property or bites someone, there are add-on policies that can help you afford these situations and not break the bank paying out of pocket.

How to choose the right renters insurance coverage

There’s no such thing as being too prepared — but that doesn’t mean you shouldn’t do your due diligence and research how much renters insurance coverage you need before disaster strikes. Here are some tips to help you find the best renters insurance coverage for your needs:

1. Estimate the value of your belongings

First things first, evaluate your personal belongings and take stock of what is most valuable to you. What would you need to replace in a worst-case scenario? Think through the value of your clothing, furniture, electronics, jewelry, kitchenware, decor, sporting gear, or musical equipment. Your coverage limit should be close to or greater than the value of your belongings. By assessing this early on, before an incident arises, you get a better idea of how much personal property coverage is best for your needs.

2. Consider how much liability you’re comfortable with

Most renters insurance policies cover $100,000 or more in personal liability. That said, a serious injury or accident on the property could result in a lawsuit that costs far more than that. If you’re worried about a low-probability, high-cost lawsuit, it’s best to consider adding more liability coverage to your policy. In fact, adding additional liability coverage (often between $300,000 and $500,000) is usually only a few extra dollars per month. Keep in mind that your landlord might also have requirements about getting renters insurance in general, or up to a certain amount. To really minimize the risk of having to pay for an expensive lawsuit, renters can consider getting an umbrella insurance policy, which provides additional coverage beyond the limits of renters insurance liability coverage.

3. Calculate your loss of use costs

When accidents happen, a rental property may become temporarily unsafe to live in. The best way to prepare is by calculating your loss of use expenses, or the costs that you may accumulate without a place to stay. This includes paying for a hotel, food, laundry, commute, and beyond. With a rough estimate in mind, you can make a more informed decision about how much loss of use coverage you need.

4. Evaluate your savings

When disaster strikes, you don’t want to be financially unprepared and have to hand over all your savings at once. It’s important to know how much cash you have on hand in the event of an emergency situation — before disaster strikes. For example, if there’s a fire in your apartment, how much money are you willing to spend on damages? After considering your savings and budget, you’ll have a better idea of how much coverage is ideal for you. 

5. Determine what deductible you’re comfortable with

As with any financial decision, choosing renters insurance coverage is a personal decision that depends on your needs and risk tolerance. For one person, it might make sense to pay a high deductible for lower monthly premium costs. That said, are you willing to pay the full deductible in the case of a covered accident? Weigh the pros and cons of out-of-pocket costs and be realistic about what you’re willing to pay and able to afford.

6. Decide if you need or want additional coverage

While many policies offer robust renters insurance coverage, there may be a few things missing that require additional coverage. If you’re renting a property on the beach in Florida, for example, flood coverage is extremely important for you compared to someone in rural Massachusetts. Other important considerations include: Do you live in an earthquake zone? Does the house have a history of pest infestations? Do you own a pet? Do you need a separate policy on high-value items like fine art or jewelry? Do you run a business out of your home? These questions matter, so talk to your insurance agent about the right choices for your situation. 

7. Find out if you qualify for discounts

While renters insurance is inexpensive compared to other forms of insurance, you still want to find the best deal that meets all your needs. One way to be more cost-effective in this process is by considering an insurance carrier you already rely on in another capacity. Usually your carrier will offer a loyalty discount if you have another policy with them (like auto insurance, for instance). Reach out to your current provider to learn if you qualify for additional discounts.

Find the right renters insurance policy with Azibo

With the following tips in mind — and the right partner to help you throughout the process — finding the right amount of renters insurance coverage is simple. 

Azibo makes it easy to find the right policy at the right price. Tenants can purchase a renters insurance policy by filling out a short, straightforward form on our website. Depending on the state where the rental property is located and a few other factors, we can return most quotes instantly, so the tenant can bind the policy online, paying either all at once for the year or in installments. 

The end result? Affordable renters insurance plans with coverage that fits your unique needs — and a streamlined process that doesn’t give you a headache. 

Be prepared for anything with Azibo

Even if your landlord doesn’t require renters insurance, it’s always a good idea to protect yourself and your belongings in the event of emergencies. That way, you can rest assured that you won’t have to pay out of pocket for unexpected accidents, injuries, or damages. Renters insurance allows you to protect yourself and your belongings for a relatively low cost — one that could save you thousands down the line if you need to make a claim for injury or damage.

Don’t wait to protect yourself and your belongings. Get started with renters insurance through Azibo today.

Disclaimer: The information provided in this post does not, and is not intended to, constitute insurance advice; instead, all information, content, and materials are for general informational purposes only. This content may not constitute the most up-to-date insurance information. Readers must contact a licensed insurance agent or company to obtain quotes, advice, and guidance with respect to any insurance matter. No reader, user, or browser of this article should act or refrain from acting on the basis of information herein without first seeking the advice of a licensed insurance producer.

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