Not every insurance company is created equal, and neither are their policies.

We’ve talked about renters insurance here before, but today we want to highlight exactly why you should get it. You might be thinking, oh this is just another way for insurance companies to get more money. What’s the likelihood of ever needing to file a claim anyway? If you’re a renter, there are actually several reasons to get renters insurance, and it’s typically not expensive.

What does rental insurance really cover?

Besides the obvious (your landlord requires it) to cover personal loss, there are other reasons to purchase renters insurance. Yes, we all know that anything can happen. What if there’s a natural disaster and you lose everything? Renters insurance is great for covering the loss of your personal property, but what about other peoples’ property? What about accidental damage to the rental? Have you thought about additional expenses?

Personal Loss

Despite what some people think, your landlord’s property insurance doesn’t cover your property. Many people don’t get renters insurance if they aren’t required because they think if something happens to the apartment or home they’re in, their things with be covered along with the structure itself. Unfortunately, this just isn’t true. For instance, if your place caught on fire, the landlord’s insurance would cover the loss of the building, not your personal things. This is why you should get renters insurance.

Many folks also don’t get renters insurance because they incorrectly estimate the value of their things. But, you should know, those things add up. Clothes, furniture, appliances, electronics, etc. would cost a lot of money to replace. It’s easy to think your stuff isn’t worth that much, because chances are you didn’t buy it all at once, and some of it’s old. However, if you had to go out and buy all those things again, all at once, would you be able to afford it? Most of us would probably answer, “no” to that. Even if you were able to get stuff from yard sales and thrift stores, it would still be money out of your pocket to pay for stuff that you’ve already purchased once before. If you had renters insurance, these things would be covered.

Liability

Just like with car insurance, renters insurance can cover liability as well. This means that if someone where at your house and got hurt, your liability coverage would be there to help care for them. Now, before you say, no one is getting hurt on your property, and when they do, it’s their fault and you aren’t paying the medical bills. Too often, people get sued for such things. A friend is over with their kid for a play date, when he falls and breaks his arm. You might not expect it coming from a friend, but trust us; smaller things have come between friendships. If you have liability coverage under your renters insurance policy, this won’t be something you have to worry about.

Property Damage

There’s nothing like having a wild party and waking up the next morning to find a giant hole in the wall. Yes, the property owner has insurance. Yes, their insurance should cover the damage. However, that doesn’t mean you won’t be the one paying for it. So, if you have renters insurance it won’t be so hard on your wallet, at least not as hard as your friend’s head going through the drywall.

Travel

Did you know renters insurance can cover you outside of your home? Let’s say you’re packing up for a 2-week trip. You pack up most of your clothes, shoes, electronics, etc. and two days into the trip, you stop at a gas station. While you’re inside, someone breaks into your car and takes your suitcase, which happens to have half your life in it. Your renters insurance will cover the loss of those items during travel, even though they weren’t in your home when they were stolen.

Additional Expense

Now, this one might be new to you, but renters insurance can actually cover other expenses you might not have thought of. For example, if you need to stay in a hotel because your apartment burned down, rental insurance can cover this cost. Rental insurance can also cover the cost of food while you’re relocated. One unexpected coverage option provided to clients is food coverage in the case of a power outage. Back in 2012, a mass power outage occurred in my town. It was about 102 degrees outside and the power had been out for days. Because of this, all the food in my refrigerator and freezer went bad because I had been at work for 14 hours before I was able to get home and transfer everything into coolers. My insurance company actually reimbursed me for the food I lost. Which was great because I had purchased groceries the day before the power outage.

What Renters Insurance Doesn’t Cover

Keep in mind, most renters insurance policies do not cover damage from floods or earthquakes. So, make sure you ask about this. Otherwise, if something happens to your things as a result of a natural disaster, you won’t be able to recoup your losses, at least not without spending more of your own money. Also, keep in mind that not every policy is the same. You’ll still have a deductible, so you’re not completely out of paying for what you’ve lost. But, in most cases, your deductible will be much cheaper than going out and purchasing everything all over again.

How much coverage you need will also determine how much your monthly premium will be. For instance, if you’re an antique collector, you’re going to pay more. Some insurance companies might also require that you have separate or additional coverage for these items. This is why it’s important to discuss what you have with the insurance agent. Do not assume that because it’s in your home or you own the property that it will be covered or that it will be covered in all cases. Some insurance companies do cover personal loss as a result of a flood, but not a hurricane. Some will cover you at no additional cost for a fire, but not a flood. And the list goes on. Every company is different. Some will charge more for these additions, while others have you covered in all cases and only charge more based on how much your things are worth.

Top Three Rental Insurance Providers

Not all renters insurance providers are created equal. With that being said, there are definitely a few that stand out. Below is a list of the current top providers.

Lemonade

Lemonade offers some pretty nice options to your coverage. For example, they offer something called “zero everything,” which lets you “undo losses,” as they put it. This means you can receive your claim payment without a deductible. On top of that, you get full replacement cost of whatever your claim was, so long as it was approved, of course. You also don’t have to worry about your rate going up, so long as you don’t file more than two claims in a year.

Pros

• No rate-hike with first two claims (resets every year)
• Lemonade uses soft credit checks (sometimes)

Cons

• Zero Everything is not available everywhere
• Hurricane deductibles are their own entity
• A standard policy only includes up to $1,500 for jewelry, so if your wedding ring alone cost $6,000, you’ll need extra coverage

Young Alfred

Young Alfred is an insurance comparison site. Which we think is awesome because it lets you compare some of the top companies based on your needs. Do you need basic coverage? Are you on a budget? Do you want top of the line? Do you own specialty items? Maybe you live in a flood zone. You tell Young Alfred what you want or need, and they’ll show you a bunch of different options to help you decide what works best for you.

Pros

• It’s a free service
• No brokerage fees

Cons

• You have to pay a filing fee for an SR22, which is typically between $20-$25
• Young Alfred only offers insurance in 41 states

Progressive

Progressive offers a variety of insurance bundling options. However, you’re going to pay for it. Compared to Lemonde’s $5/month coverage, you’re paying a lot more, like $30 more. But, you’re also getting more for your money.

Pros

• Your hotel and meals are covered in a case where your home needs repairs and isn’t safe to live in
• If someone else gets hurt in your home, their medical bills are covered

Cons

• More expensive

USAA Renters Insurance

Unfortunately, USAA does not fall into our list of top rental insurance providers, but that doesn’t mean they aren’t worth your consideration. We’ll still give them a mention since many of our readers qualify for USAA services. And since we’ve already written a pretty extensive blog on USAA Renters Insurance, we won’t go too much into that here. But, just as a quick recap, and to use when you’re comparison shopping, here’s a list of what USAA covers and when. Most of these things are covered by other rental insurance providers, but again not every company is the same. Talk to an agent and read the fine print before you sign-up for a policy.

What USAA Covers

• Clothing
• Electronics
• Silverware
• Phones
• Military Equipment
• Jewelry
• Storage
• Fine Art
• Bicycles
• Sports Equipment
• Cameral
• Liability
• Coins
• China or Crystal
• Music Equipment
• Guns
• Furniture
• Stamps
• Antiques
• Computers
• Appliances
• Furs
• Hearing Aids

When USAA Coverage Applies

• Fire and lightning
• Flood and Water
• Windstorm or hail
• Collapse of building
• Volcanic eruption
• Earthquake
• Smoke
• Freezing
• Falling objects
• Explosion
• Theft
• Aircraft
• Vehicles
• Vandalism and malicious mischief
• Riot and civil commotion
• Sudden and accidental tearing apart, cracking, burning or bulging
• Sudden and accidental damage from artificially generated electrical current