Whether your landlord requires renters insurance or doesn’t, having renters insurance is the best way to protect your personal belongings while renting.
Consider it best practice for renters and landlords: Your property manager likely uses security deposit insurance from Rhino and landlord’s insurance to protect the rental unit. However, everything inside of the rental unit, like your valuable items, might need additional protection from renters insurance in cases of damage, theft, and other accidents/incidents. Renters insurance can even protect you and the people you love in case of injury!
Since renters insurance is pretty much customizable based on the type, amount, and value of your possessions, you might find yourself wondering: How much renters insurance do I really need? And more importantly, how much is it going to cost? All renters insurance companies are different, meaning policy coverage, and cost differs too, which can make answering these questions tricky. Lucky for you, there’s a way to get all the coverage you need for your valuable possessions, and keep it affordable at the same time.
There are many types of renters insurance coverage, but these three key coverage options protect renters in case of an emergency, damage, or an accident.
If your stuff is damaged or stolen, personal property coverage can reimburse you for the loss so you can replace or repair them. Personal possessions that are protected by personal property coverage include:
Furniture including your sofa, coffee table, or WFH desk
Jewelry, watches, rare gems, collectibles
Electronics, such as laptops, cellphones, televisions and more
Kitchen appliances like your toaster or the Cuisinart mixer you can’t live without
Books, decor, and plants
In some cases, stolen bicycles or scooters
And really, a whole lot more depending on the cause of damage and your circumstances!
Say you need your bathroom deep-cleaned after you move in, and you hire a service to do it. The cleaners show up and one of them slips and falls on the tile in your bathroom, hurting their elbow. Should the cleaning company or person decide to sue you for injury, then liability coverage can protect you. Liability coverage covers you if you cause harm to others or their property by accident. It covers the following: legal fees, medical bills and medical expenses for others, damage done to other’s personal property in your home, or damages that start in your home and then impact another person’s property.
Loss-of-use coverage can either be A) a percentage of the personal property coverage or B) a flat rate of money that you can use to cover the cost of having to live outside of your home.
In case your home is ever damaged to the extent that it is unlivable, say in the case of a fire or other natural disaster, a renter can use the loss-of-use coverage to reimburse costs for short-term or long-term accommodations, additional utilities, laundromat expenses, parking fees, groceries, pet care, and more. Any expense that can be attributable to you living outside of your home temporarily due to an incident is covered!
The goal is to purchase a renters insurance policy that offers an accurate coverage amount, and has a reasonable deductible with an affordable premium. Wait, what now?
Here’s what that means. A renters insurance premium is the amount of money charged by your insurance company for the plan you've chosen. These policy costs are usually paid on a monthly basis. You want this price to be low, obviously.
However, a low premium usually translates to a higher deductible. A deductible is the amount of money you have to pay out of pocket before your insurance kicks in. When you purchase renters insurance, you get a certain amount of coverage that can be used only after you’ve paid your deductible. Say your television is ruined by water damage because of a burst pipe in your ceiling, and that television costs $2000. If your deductible is $500, you’ll be expected to pay $500, and your renters insurance will cover the remaining $1500.
So while some renters insurance companies advertise that renters insurance starts $5, the average premium is actually around $14 per month, likely based on the renter history, credit score, and keeping the deductible lower. Keep in mind that the average deductible is around $500-$1000, and while some companies might go as low as a $0 deductible, you’re likely to pay more than the American average premium.
To calculate how much renters insurance coverage you need, you need to take into account how much coverage you need for your personal property and how much liability coverage you need. You can’t necessarily predict how much loss-of-use coverage you’ll need, but if you can determine how the replacement costs your belongings and how much you might need to protect yourself in cases of legal liability, you’re set.
To figure out how much personal property coverage you need, follow these steps:
Tally all your personal items that could potentially be covered by renters insurance.
Take photos of all of your personal items to save in case of damage or theft.
Determine how many expensive items you have, such as an engagement ring or expensive computer monitor.
Determine how many low-cost items you have like a toaster or a number of secondhand books.
If you have more high-cost stuff than low-cost stuff, opt for a renters insurance policy that reimburses you for the replacement cost value of the item. While the policy may cost you more, this means you’ll get the price you paid for the item reimbursed back to you.
If you have a good balance between expensive and inexpensive belongings, consider a renters insurance policy that reimburses you for the actual cash value (ACV) of the item. It will be the price of the item as it has depreciated over time, but these policies tend to have a lower monthly premium.
Liability protection is typically rolled into a renters insurance policy as a flat rate, typically $100,000 or $200,000 on average. To determine if you need liability coverage, ask yourself the following questions:
Do you work from home and host your coworkers in your space?
Do you like to have friends or family over a lot?
Do you have a partner who is not on the lease that spends time at my apartment?
Do you have a dog or pet that poses a risk to visitors? (Dog bites are covered by liability coverage!)
Are you redecorating or renovating your rental unit and have workers in and out of your home?
Do you hire anyone else to help you maintain your home?
Do you share a wall with your neighbors?
Is your building a new build or pre-war?
If the answer is yes to more than one question, or just one question, you’ll likely feel safer with liability coverage!
ProTip: When you’re looking to rent a new home, remember to ask your future property manager or landlord if they offer Rhino. Rhino renters can purchase renters insurance as an add-on to security deposit insurance, and receive 100k/15k in liability coverage and renters insurance for their personal belongings.
Okay, so you have determined how much coverage you need, and calculate what premium and deductible you can afford, now is the time to request a quote from your select renters insurance company. We recommend comparing quotes from at least three companies before selecting a policy to purchase.
Other factors to consider when selecting a renters insurance company:
Comparing quotes to the average cost of renters insurance based on your state
Reputation including customer reviews and their BBB rating,
Ask what your friends and family have used for their renters insurance
If you’re enrolling in Rhino, you can purchase renters insurance and security deposit insurance at the same time.
And there you have it, everything you need to calculate exactly how much coverage you need from your renters insurance policy, and how to get it at the price you can afford. Rhino specializes in keeping moving and renting more affordable for renters. We have eliminated the high-cost security deposit and replaced it with security deposit insurance that saves you money at move-in. In some states, you can also conveniently add on renters insurance so save even more at move-in. Learn more today.