Is Renters Insurance Worth It?


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ByMark Fitzpatrick
Edited byCasie McCoskey
ByMark Fitzpatrick
Edited byCasie McCoskey

Updated: May 22, 2024

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From safeguarding your personal belongings to covering unexpected liabilities and additional living expenses, renters insurance is a multifaceted tool that offers you peace of mind when life throws you a curveball. With an average cost of $13 per month, it's a bargain compared to replacing everything from scratch, paying for costly medical expenses or the cost of a hotel if you need to relocate temporarily.

From getting enough coverage and comparing quotes to adjusting deductibles and opting for discounts, tailoring your policy is the key to making renters insurance worth it. This way, you can get robust protection without overspending.

Why Renters Insurance Is Worth It

Renters insurance offers the protection you need for your personal belongings in case something unimaginable happens — be it a fire that razes your belongings or a storm that floods your home. While not legally required, securing renters insurance is a wise decision to protect your possessions and provide peace of mind. From theft to natural disasters, the risks are real, and the key reason why renters insurance is worth it is that it offers a solution that's both practical and essential for anyone renting a home.

Financial Security: Renters Insurance vs. Replacing New Stuff

Renters insurance is designed to protect your personal belongings — and it’s a standard feature in all policies. Renters insurance costs an average of $13 per month or $159 per year for $20,000 in coverage, which is considerably less when compared to the cost of replacing appliances, clothes and valuables in case of a catastrophe.

Even if you want higher personal property coverage limits, getting $50,000 costs an average of $20 per month, while a $100,000 limit is $31 per month — a bargain compared to replacing everything from scratch. Generally, renters insurance is worth it because it offers more than a safety measure; it's a strategic financial choice that ensures you won't face the overwhelming costs of starting over.

Legal and Medical Coverage: Peace of Mind for Unexpected Accidents

Liability coverage is a crucial part of all standard policies. This part of your policy will cover the cost of guests' injuries on your property or fees from legal issues after an accident.

The financial implications of an accident in your unit can be staggering, especially if you consider the rising costs of healthcare. If your guest suffers a simple fall, medical expenses can already reach an average of $64,526 — a price that’s difficult to pay out of pocket. With renters insurance, you can get liability coverage of at least $100,00 for a mere $13 per month, which can help you pay for your guest’s medical expenses. Remember, unexpected accidents can happen at any time, but for a small price, renters insurance ensures that you're not left to face these costs alone.

Temporary Housing: Helping You in Difficult Times

Additional living expenses coverage is a crucial component of renters insurance, offering support when a covered event makes your home uninhabitable. For instance, if your unit gets destroyed in a fire, this coverage will take care of your temporary housing costs, such as hotel stays and meals, ensuring that you are not left in a lurch during a difficult period. Some expenses that are covered include:

  • Temporary housing (hotels, AirBnBs or a temporary lease)
  • Meals
  • Laundry
  • Transportation
  • Storage fees
  • Pet boarding
  • Moving costs
  • Furniture rental
  • Utility installation and fees

Whether a fire, flood or other disaster displaces you, renters insurance is worth it because this coverage ensures you have the resources to find temporary housing without financial strain.

Relying on Landlord's Insurance: The Risk You Shouldn't Take

While your landlord has insurance to cover losses to the building itself, it won't cover your personal property and certain liabilities. You cannot rely on your landlord's policy to safeguard your belongings. Renters insurance, however, protects against losses to your personal property, including a surprisingly long list of perils such as fire, theft, vandalism and more. It also provides liability coverage if a guest suffers an injury in your home or if you accidentally injure someone. Relying solely on your landlord's insurance could expose you to significant financial risk, especially if you underestimate the value of your belongings.

Making Renters Insurance Worth It for You

Renters insurance is most worth it when you tailor it to your needs — after all, there is no one-size-fits-all policy. From adjusting your limits to applying for discounts, you can optimize your policy to get the protection you require without unnecessary extras.

Get Enough Coverage

Getting enough overall coverage is essential to avoid paying hefty fees out of pocket. Starting with liability coverage of $100,000 provides a strong foundation for protecting against potential legal or medical costs, but we recommend also considering your personal property needs.

By taking the time to understand your unique needs and selecting the appropriate coverage levels, you can create a renters insurance policy that offers robust protection without unnecessary expenditure.

Assess The Value of Your Possessions Properly

The value of your possessions is a key factor in determining your personal property coverage limits. Properly assessing the value ensures you have enough coverage and can avoid paying out of pocket. To properly evaluate your possessions, follow these steps:

1
Take Inventory of Your Belongings

List everything you own, including clothes, electronics and furniture.

2
Determine Current Value

Estimate the current market value, considering age and condition.

3
Consider Professional Appraisal

For valuable items, a professional appraisal may be necessary.

4
Compare with Coverage Limits

Ensure your total value aligns with your coverage limits.

5
Adjust as Needed

Modify your coverage to match the value of your possessions.

By taking these steps, you can confidently secure the right amount of coverage and make your renters insurance policy worth it.

Compare Quotes From Different Insurers

Comparing renters insurance quotes is a vital step in finding the best and most affordable renters insurance tailored to your needs. Beyond premiums, it's essential to consider the insurance company's financial stability and reviews from other customers. Consider the company's reputation for customer service and claims handling.

By taking the time to compare quotes and evaluate different insurers, you can find a cheap renters insurance policy that provides the right balance of cost and coverage, ensuring peace of mind for you and your belongings.

Adjust Your Deductible

Increasing or decreasing your deductible is a strategic way to adjust your renters insurance policy to your unique financial situation. Insurance deductibles are the amounts you must pay before your policy takes effect, and it plays a vital role in determining your premium. Usually, a higher deductible results in lower premiums, but it also means more out-of-pocket costs. Conversely, a lower deductible results in higher premiums but less financial burden if you need to file a claim. Carefully evaluating your risk tolerance and financial position will help you choose the right deductible, making your renters insurance policy truly work for you.

Opt for Discounts

Most insurers offer a variety of discount opportunities, such as discounts for having multiple policies or for using auto-pay. These discounts can make renters insurance even more cost-effective. Whether it's a discount for being a long-term customer or having a security system in place, these savings can add up, providing you with the coverage you need at a price that fits your financial situation.

Get Additional Coverage

Most insurers offer optional coverage to complement your renters insurance policy, providing tailored protection for your specific situation. These options include additional coverage for valuable possessions, such as musical instruments or antiques, or specialized protection against risks like identity theft or flood damage. These endorsements enable you to enhance your policy to suit your particular needs, providing comprehensive protection without overpaying for coverage you don't need.

Sources

National Library of Medicine. "Cost of Inpatient Falls and Cost-Benefit Analysis of Implementation of an Evidence-Based Fall Prevention Program - PMC." Accessed August 9, 2023.

About Mark Fitzpatrick


Mark Fitzpatrick headshot

Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.