How often should you shop around for renters insurance?

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There is no set-in-stone rule regarding how often to shop around for renters insurance. But if your insurance increases substantially, you move to another state or to an area with less crime, you may want to consider getting a new policy. Shopping around at least once a year upon renewal is a wise choice to maximize your savings.

Since renters insurance is relatively inexpensive, it may not enter your mind that you could be saving money by changing policies or companies. Take a look at times when you should shop insurance companies for a new renters insurance policy.

Key Takeaways

Only 57% of all renters have renters insurance, also known as an HO-4 policy.
The average renters insurance premium is about $27 per month.
Renters insurance covers your personal property, personal liability, and additional living expenses.
Shopping around for renters insurance before every renewal can save you money.

What does renters insurance cover?

Renters insurance covers your personal property— clothing, computers, furniture, exercise equipment, musical instruments, and more that might be damaged or stolen from your rental, minus your deductible. Your landlord’s insurance policy does not cover your property but only the building. Renters insurance also covers you if someone is injured or their property is damaged while on your property.

There are three types of renters insurance coverage — personal property, additional living expenses and renters liability coverage.

Personal property coverage

This insurance covers things you own inside your dwelling like your laptop and TV, clothing, furniture, and musical instruments, and some belongings outside of your home as well. High-value items, such as jewelry or artwork, may or may not be covered on your policy, but you can purchase a rider or add-on insurance to cover these items.

Renters insurance policies usually pay out personal property out based on actual cash value coverage, which reduces the cost to replace your items by standard depreciation.

Renters liability coverage

Also called personal liability insurance, renters liability covers you from a lawsuit if someone is injured in your apartment or there is accidental damage to a friend’s, family member’s or neighbors personal property.

Additional living expenses

Additional living expenses coverage pays for temporary housing if you’re unable to live in your rental due to a covered peril, like a fire. Any costs that are above and beyond your normal monthly costs while living in your home like eating out and transportation, are also covered up to your coverage limits.

How much does renters insurance cost?

According to the National Association of Insurance Commissioners (NAIC), the average premiums for renters insurance are between $15 and $30 per month. What you pay will depend on your policy, your possessions, the location and the size of the rental unit.

Is a renters insurance policy worth it?

Just over half, or 57% of renters have renters insurance, according to the Insurance Information Institute. But as the average cost of renters insurance is only $27 a month — about the price of a week’s worth of coffee or three Chipotle burritos — buying a policy just makes sense as a wise measure of financial protection. It also makes sense if you don’t have the $400 in a savings account to cover damage to your personal property or bodily injury to a guest if you have to make a claim.

What are the downsides to not having renters insurance?

The downside to not having renters insurance is if you have an occurrence that causes a financial loss and you don’t have the money in the bank to cover the loss or injury to others.

Case in point, if you leave the water running in the bathtub and it overflows into your neighbor’s apartment, causing $5,000 worth of damage to your neighbor’s property, your policy will pay for the damages. If you don’t have renters insurance, you’ll be responsible for paying for the damages to your neighbor’s property.

Also, if your property is stolen, your insurance will cover the loss, minus your deductible.

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Is there a ‘best’ time to shop around for renters insurance?

The best time to shop for renters insurance is when you sign a lease and then before each policy renewal. That way, you’re property is covered from a covered loss the moment you move in. If you move to another area, you may want to shop around for a new policy, or if you downsize to a smaller apartment or upsize to a larger unit.

If you purchase new furniture or electronics, you may also want to look at a new policy as the value of your property can affect the price you pay on your policy. Some insurers will bundle renters insurance with car insurance. By bundling, you can usually save on both policies.

Where is the best place to find a good deal on renters insurance?

By shopping around for renters insurance, you may save a few dollars every month. While that may not seem like a lot, over the course of a year, a few dollars can really add up.

If you have auto insurance, it may be best to start with your insurer. If you can bundle your car and rental policies, you may save money on your premium. One of the best ways to quickly find a good deal is to take a look at insurance companies that offer online quoting or quote comparison tools where you can find quotes for multiple insurance companies all in one place — saving you time and money in the long run.

Kathryn Pomroy

Contributing Researcher

Kathryn Pomroy is a journalist and freelance writer specializing in personal finance, insurance, consumer debt and banking, and all types of loans. She has written for dozens of major publications, small businesses and personal finance companies.