A lot of individuals and families rent properties since the either cannot afford to buy one, or are traveling, studying, or prefer to invest in other assets rather than in properly. Whatever the reason, when you rent a property you need to be insured.
Whenever you rent a property you will sign a contract that has certain stipulations in it. Also, the landlords most probably have insurance policies out to cover them for any event. As such, it is advisable to have an insurance policy even for short-term renting, just to secure yourself from emergency situations as well as from unscrupulous landlords.
When it comes to the best, and that includes cheapest, best coverage, best customer care, best shopping experience, bets digital interface and more, I came up with the following list of companies.
- Liberty Mutual
- American Family
- State Farm
Before I go into the details of each one, let’s take a look at who really needs renters insurance and why.
The first thing is that everyone that rents need insurance, within this large group of everyone, what insurance does is gives peace of mind before it gives anything else.
Students that rent a dorm of unit close to the campus will most probably be covered by parents renting or homeowner’s insurance policy. However, if this is not the case, get a renters insurance, since college dorms and rental units are always susceptible to damage, and if you are responsible for the unit, whether you damaged it or not is irrelevant. The other aspect is the coverage of possessions. When you rent a dorm, you get a 10% of your parent’s personal property value as coverage. So, as a rule of thumb, if your parents have a $100,000 personal property coverage, you will get $10,000 coverage. If you rent an off-campus property, you need a full rental policy, this is not linked to your parents, and as such, you need to consider damage and theft issues as the key to the policy coverage.
Over 33% of all apartments in the US are rented by people under 30 years of age, according to the National Multifamily Housing Council.
The only issue with young professionals is where they rent. If you rent in a managed building, in most instances the contract forces you to take out a renter’s insurance. If not, you should take such an insurance coverage out. It doesn’t matter if you only have used furniture and backpack, even in a most modest of conditions, you need to secure yourself against possible litigations from unscrupulous landlords, and from the theft of property.
If you rent a fully furnished penthouse worthy millions, then obviously you will need insurance to cover any form or damage or theft to your property as well as to the landlord’s property.
It doesn’t matter where you live, as a senior citizen, if you rent, you must have renters insurance to cover theft and personal injury issues. Most senior citizens live on a fixed income, as such, you need to buy a comprehensive renters policy that will cover you from theft, personal injury in the property as well as from damages to the property and its contents.
How to Choose the Best Solution
As you can ascertain, every individual fits into a specific niche; these niches include age, income levels and personal possessions (jewelry, art, equipment, etc.) Based on your specific niche, there is a policy that will cover your needs.
Let’s take a look at some of the issued that need to be covered when selecting a renters insurance package.
Determine your needs, and this is done by determining your budget allocation for insurance coverage based on your current income status and the level of personal possessions you own, your age and health status.
Check out which companies offer you a Digital Locker Mobile App. These apps make managing your policy much easier. They help you list all your possessions, assigns a value for each one and lets you upload an image of each one with a date stamp.
While you might think that such an app is not so important, you are wrong. All property insurance coverage for renters and homeowners starts off with two bases; the policy holder’s details and the possessions.
Once you have organized your possessions, you can ascertain what level of insurance coverage you want and for what.
Coverage is based on what is termed “Peril,” and peril is named and categorized in the following form:
- Water damage
- Hand of God
Yes, there is the hand of God, which means you are not covered by this peril, and will not be paid if a meteorite falls out of the sky and hits your building. Now let’s look at the rest.
Flooding refers to house floods caused by plumbing and leaks. If you live in a flood zone area, you need to make sure you have actual natural flooding as a feature. The same goes for damage from earthquakes, and if you live near a volcano, you should add that too.
So, if you live in Las Vegas, you won’t need a policy covering you from natural flooding or volcano, but you might need coverage from everything else.
As such, match your policies features to the location you live in and consider the additional costs based on the probability of occurrence, Such as earthquake coverage in San Francisco.
Types of Rental Insurance Coverage
There are four basic rental policies available, and these include:
Personal Property Coverage
This means your possessions, and it covers you from damage and theft. You need to see exactly how they are covered and to what levels of coverage, and check out maintenance and repair coverage for equipment. Also look at coverage for loss of possessions such as jewelry and small electronic devices. This kind of coverage covers you wherever you are, and not just at home.
This covers you’re from bodily injury or others that are injured bodily while in the property. It covers you and others from damage that occurs to yourself in the household, and also covers you from damage to household fixtures that are not yours.
Medical Payments to Others
If another person is injured while visiting you in the property, whether you are liable or not, it covers their medical expenses and is a great plan to have just to be sure. This plan does not cover you or people living with you, only visitors.
Additional Living Expenses/Loss of Use
This plan covers you in the instance of natural disasters covered by the policy or house fires and flooding that force you to leave while the property is being repaired. It will provide you with living expenses to rent another property until you can return.
For the more lucrative renter, where prized possessions include expensive collections or works of art and jewelry, some insurance companies offer an extended coverage feature, but obviously, this comes at a cost based on the value of the possessions being insured.
All top-level insurance companies give you an online calculator to evaluate the overall cost of a policy. This means that you need to only work with such companies since they provide you with access to information and full transparency. Also, you want a company with enough backbone and integrity to stand up to claims and deliver claim handling with speed.
When you compare companies, don’t just look at the price, look at what it really covers and what are the stipulations. Consider that some of the factors used to create a policy price will include personal details and credit history.
Having stated this, most renters insurance policies are affordable and based on research and surveys the average monthly price you will pay is around $16 per month, where the upper bracket is around $30.
Let’s take a look at three national companies, providing the same policy.
- American Family: $11.50
- Allstate: $17.00
- Nationwide: $22.42
As you can see, the variance is in line with the survey. Now the question is, which one is the best since the cheapest is not necessarily the best.
According to research and customer reviews, and comparing thousands of policies, including discounts, protective devices, and shopping experience too, the following list gives you the best of every category:
- Best for online tools: Allstate
- Best for extended coverage: Nationwide
- Best for discounts: Liberty Mutual
- Best for rates: American Family
- Best for policy management: State Farm
- Best for customer service: MetLife
- Best for Military personnel: USAA
- Best for Senior Citizens: AARP
Is Renters Insurance Worth Taking Out?
It comes down to your budget; the bottom line is can you afford that $11.50 for a renters insurance? IN 99% of the cases you can since you are renting and that already means you are making some form of income to cover the cost of renting. Adding a further $11.50 or even less will give you that extra secure feeling that if anything goes wrong you are covered.
Obviously, you don’t want to spend %11.50 on an insurance plan that doesn’t cover you for what you really need. So, bottom line, yes, renters insurance is a must, but take out one that suits your needs and not one that enriches the insurance agent.