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No Dumb Questions
What does renters insurance cover? | S2 Episode 6 | No Dumb Questions
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Renters insurance is one of the cheapest and easiest ways to protect your belongings from disaster. Join Julia and Sara as they discuss:
- If renters insurance is worth it
- What it does and doesn’t cover
- How to get cheap renters insurance
Enjoy!
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Disclaimer: This podcast is produced by Insurify and is intended for educational purposes only. We are not licensed insurance agents, and we do not constitute personalized financial or legal advice. Personal situations vary, and you should always consult a licensed professional before making financial decisions.
Welcome back to No Dem Questions Insure Vice podcast about street talk uncoverage claims and savings and I'm Sarah. And I'm Julia. And today's topic is renter's insurance. Yes, one of the most overlooked types of coverage, but it's pretty affordable and I think it's pretty worth it actually.
SPEAKER_01I agree. Um a lot of people think, you know, I don't own the building, why would I need insurance? Yes. But uh, spoiler, your landlord's insurance does not cover your stuff.
SPEAKER_00So today we're gonna go over what does renter's insurance actually cover and is it actually worth it?
SPEAKER_01And I would say yes. To me, this is one of the best like cost to peace of mind ratios you can find, honestly. For sure. Um feels very worth it to me, but we will get into it so you can figure out if it's worth it for you. Yeah, let's do it. Great. So super quick, renter's insurance covers your belongings, your liability, and temporary living expenses if a covered peril means you cannot live in your apartment.
SPEAKER_00Yes, and just a quick note those covered perils basically the same as the home insurance cover perils. Yes. So yeah, listen to that episode if you're interested on those perils. Um, so yeah, it protects your stuff, not the building and not your roommate's stuff.
SPEAKER_01Yes, also an important note. And it's usually super affordable. Um, it protects your possessions and typically includes off-premises coverage. Um, for example, if your laptop is stolen from your car, that would be covered under renter's insurance.
SPEAKER_00Yeah. So it's not legally required by any state, but some landlords may require it as a part of your lease agreement. So make sure you check that in your lease and they'll probably also just let you know. Yes, yeah, for sure. All right, so let's dive a little bit deeper into renter's insurance. So obviously the ultimate question is what is renter's insurance? So it's a policy for people who rent, whether it's a studio apartment, a double decker, as we call it here in Boston, or a whole house, even. Um, it does not cover the building itself. That's landlord insurance. That covers the physical structure that's up to your landlord to get, that's not up to you. Um, it's not legally required, but your landlord can require it in your lease agreement.
SPEAKER_01Yes. And what does renter's insurance cover? Um, it covers your personal belongings and your liability when you're in your property. Um, and that's three main areas, which would be personal property, liability protection, and then loss of use, like home insurance covers as well.
SPEAKER_00Yeah. So very similarly to that personal property and home insurance, it covers your stuff. It's your furniture, your clothing, your electronics, not electronics that are like already in the unit, like a thermostat or something. Right. Um, and appliances you own. So like if you own a microwave but you don't own the refrigerator in the unit. Exactly. Yeah.
SPEAKER_01Yes. Um, and it covers covered events or apparels, which usually include fire theft, vandalism, certain kinds of water damage, and smoke, very similar to a home insurance policy.
SPEAKER_00Yeah. So let's get into a couple examples. Yeah. So an apartment fire damages your belongings. Your belongings are covered, but like I said, not the structure of the apartment. Um, okay, this is a good one. The unit above you leaves their water running and it overflows, goes through the floor, and destroys your apartment. In that case, your belongings are covered, not the unit again.
SPEAKER_01Yes, correct. And for liability protection, that covers injuries to other people that happen while they're in your space in your apartment, um, or damage to someone else's property that's in your space.
SPEAKER_00So a good example of this is a guest slips in your apartment. They have medical and legal costs, those are covered. A really good example of this is my landlord, puts in our lease that we have to shovel our sidewalk. So technically that liability is now on us if someone slips during the winter. So we have to be very careful to salt and shovel our sidewalk. That's such a good example.
SPEAKER_01Yes. Wow, awesome. Okay. Um, and read those kind of earlier, like a fire, the water, you know, if either of those cause your apartment to become unlivable, you can't use the kitchen or the bathroom, or you just can't use the apartment at all. Yeah. Um, loss of use coverage, which is part of a renter's insurance policy, will cover hotel stays, temporary housing costs, and extra living expenses up to a certain limit. This isn't just like forever and however much luxury. Um, usually there's a limit on your policy, so you'll want to know what that is, but it will be covered.
SPEAKER_00Exactly. And of course, it only applies if it's caused by a covered event. Yes.
SPEAKER_01Very important. And speaking of covered event, as with any kind of insurance, you also want to know what is not covered so that you can know what to prepare for or where to buy extra protection. So something that's not covered, like with home insurance, is flood damage, earthquake damage, normal wear and tear, and pest infestations. Yes.
SPEAKER_00So flood insurance, like we went over last episode, is a separate policy. Renters don't typically need flood insurance unless you have possessions in a basement or you live at a garden level. That's when it might be worth considering. But of course, up to your personal profile.
SPEAKER_01Yes, of course. Um, and again, this does not cover your roommates' stuff.
SPEAKER_00Yes.
SPEAKER_01They will need their own coverage to cover their belongings. Yes. Now, the big question. Question. How much is renter's insurance?
SPEAKER_00All right. Renters insurance is a pretty chill $15 to $30 per month on ABAS. So chill. So much more chill than home insurance. Exactly. Um, but if you pay for it in full, you can get it for cheaper. So I actually pay for my renters yearly. I pay every January, and it's about $100 a year for me.
SPEAKER_01I also pay yearly and I bundle it with my auto insurance. And I get even more discounts. Right. I know. Um, and renter's insurance is obviously relatively cheap compared to other policies.
SPEAKER_00Yeah, but of course, like with every single insurance policy, your actual cost depends on your location, the coverage limits you choose, your deductible, and the value of your belongings.
SPEAKER_01Yes. And speaking of location, so let's look at a couple examples. Yes. Um, so renter's insurance in New York, and these are average costs. This can really depend on down to the zip code, right? Um, average in New York would be $18 a month. Um, California, $23 a month, Texas, $28 a month. You're seeing maybe a little bit more high risk from some of those perils like hurricanes. Um, and in Florida, we're very expensive for home insurance. You do also see a little bit higher cost for renters' insurance because of the same climate risks, even if they're not the cost isn't as high because you're not insuring the structure of a building. Yes. Um, your belongings most likely still have value. Yeah. Right. So that is why you'll see a little bit higher costs there. It's also very common to see more expensive rates in cities. Yes. There are more people, you know, there are often higher crime rates. Um, it's just the way you know it is. So, for example, the average I gave for New York, that's a state average, $18 a month in the state of New York. You might see a higher renter's insurance cost in the city of New York. For sure. For example. Yeah. So that's something to keep in mind.
SPEAKER_00So the best renter's insurance, of course, will provide enough coverage to cover your belongings at affordable prices and then fit your situation. So not too much coverage, not too little coverage, exactly where you need to be.
SPEAKER_01Yeah, exactly. And let's be real, I feel like most renters don't think they own that much until they have to replace everything at once, which is so hard. It's really hard.
SPEAKER_00So like your laptop, your phone, all of your clothes. All of your clothes. All of your furniture. Yeah.
SPEAKER_01That adds up really, really fast. Yeah. It really does. Kitchen utensils. Yeah. Bowls. The small space. It's like you're looking at toiletries.
SPEAKER_00It really adds up. Yeah, it really does. It's like, okay, a bowl is like five dollars, but then you lose all your bowls and you're looking at like $30 to pick out that, et cetera, et cetera.
SPEAKER_01Yeah, no, it can really add up fast. And yeah, without insurance, that's all out of pocket. Yeah. That's you with a shopping cart going to all of the different stores, buying all of this stuff at once. Yeah. Not does not sound fun. Um, and for example, right, can you fully replace that PC that you lovingly built by hand? Can you replace a nice piece of jewelry that was maybe a gift from somebody? An heirloom jewelry, right? Can you replace your TV? Even if it's older. Yeah, I have an older TV. I still don't really want to replace it if I don't have to. Yeah. Um, and especially, can you do all of that at once? Yes. That's hard. Yeah, for the costs, it's really worth it. Yeah. Yeah. So speaking of costs, how do we reduce that? How do we compare that? So here is how to get renter's insurance quotes. Because just like with any other kind of insurance, you want to make sure you're getting the best deal for the coverage you need. Exactly. So um, with renter's insurance, it's super easy to use online comparison tools. Um, and you can also go direct to insurers through a website or through an agent to explore and buy policies.
SPEAKER_00For sure. So comparing multiple quotes is obviously the easiest way to find the most affordable option. And then getting from the same insurer as your car insurance, like you do. Yeah. Great option for bundling insurance. And what they're gonna ask you is like the value of your possessions, um, where you live, your zip code, and they're gonna take all those things into account. But it's not as comprehensive as home insurance. You're just gonna really need to know like the basics of the value of the that you own and where you live, and you'll be able to get a pretty easy quote that way.
SPEAKER_01Yeah. And this is where doing a home inventory can really help. Yes. And even if you're not super nitty-gritty cataloging every little thing, knowing the big stuff, that will help. That's important.
SPEAKER_00In a pinch. Right. Yeah. All right. So let's get into some frequently asked questions about renter's insurance. Awesome. So, most importantly, what is the average cost of renter's insurance?
SPEAKER_01Yes. So, according to Insurify Data, the average monthly cost of renter's insurance is $22. And per year it's $264. So that's for about $30,000 of personal property coverage. But again, that will vary by location, by coverage levels for liability, et cetera.
SPEAKER_00What is an interested party on renter's insurance?
SPEAKER_01Ooh, all right, getting some terms. Let's do it. So an interested party on a renter's insurance policy is someone who has a financial stake in your apartment, but doesn't receive any coverage. So that would be a landlord, for example, or a property management company. And how that works, why it's important, is because an insurer can inform them of any changes made to the policy, even though they're not covered on the policies. Yeah, that's how that works.
SPEAKER_00Kind of similar idea when like a mortgage mortgage company gets notified by the insurer if you change the copy. Yeah. Exactly. What is a typical deductible for renter's insurance?
SPEAKER_01Sure. So, like with home insurance, a typical deductible ranges from 500 to 2,500. Um, remember, this is what you pay out of pocket if you have to file a claim. Um, usually you can get even lower than 500 with renter's coverage, which would mean a little bit higher premiums, but less out of pocket. So depending on your budget, what's important to you, you can select a deductible that works for you.
SPEAKER_00Yeah, for sure. What is the minimum coverage you can get with renter's insurance?
SPEAKER_01The minimum coverage for renter's insurance is I believe $100,000 worth for liability coverage and $10,000 worth for personal property contents coverage. That's pretty much the lowest you'll probably want to get to. Yeah, yeah.
SPEAKER_00So does my partner who lives with me need a separate policy?
SPEAKER_01Technically, yes, I believe, because in the eyes of the law, yeah, they're your roommate, I think. You know what I mean? So if you're unmarried, you don't have that legal contract binding you, et cetera. Um, you are probably going to need a separate policy to make sure that you have complete coverage for all of your belongings.
SPEAKER_00Yeah, for sure. Finally, how do I find cheap renter's insurance?
SPEAKER_01Yeah, like we've been talking about, um, compare renter's insurance quotes online or on the phone or on various websites with insurers. Make sure you get lots of different options that you know you are getting the best deal for what you need, as always. As always. You can adjust your deductible. Um, you can make it lower if you're maybe anticipating filing a claim and you don't want to have to pay as much out of pocket and you're okay with paying a little bit extra in premiums per month, um, or make it higher if you're comfortable with that possible higher out-of-pocket cost. Yeah. Um, and then definitely just, you know, a really important thing is just don't buy more coverage than you need. And a good way to do that is to create a home inventory or at least know your big ticket items, as they say. Yes. Um, so that you, when you're buying coverage, you're not paying for more than you actually need to cover your belongings. Exactly. Yeah.
SPEAKER_00All right. So if you're in the market for renter's insurance, you want to first estimate the value of your belongings. Like we said, a home inventory, save those receipts for big ticket items.
SPEAKER_01Yeah, that's a really good point. Um step two would probably be to decide how much coverage you need. So informed by step one, right? Yes. Um, but this would be, you know, do you only need $10,000 worth of personal property coverage or do you want 15 or 30 or 50? Yeah. Who's to say? Right.
SPEAKER_00Check if your landlord even requires it. Um, and like we said, they will either tell you this or to be listed in your lease agreement. But I think we're both in agreement that even if your landlord doesn't require this, it's good peace of mind to have.
SPEAKER_01It really, it just feels like the right move. It really is, yeah. Yeah. Um, and then last compare renter's insurance quotes. You know, look for coverage level, for price, and for deductibles to figure out how to pay the least for what you really need for the right coverage. Exactly.
SPEAKER_00All right. So, overall, rent's insurance protects your stuff, but not the building and not your unit.
SPEAKER_01Yes. It also protects you financially if something goes wrong.
SPEAKER_00Yeah, and it's definitely one of the most affordable types of insurance.
SPEAKER_01Yes, and one of the easiest to overlook, I think.
SPEAKER_00Yeah, but it's, I mean a small monthly cost.
SPEAKER_01Big financial protection. For sure. Yeah.
SPEAKER_00Thank you all for tuning in to this week's episode of No Dumb Questions. Send to a friend who you think could also use a lesson on Redgers insurance, and you can compare quotes using the link below. Until next time, stay covered and save money. You are listening to No Dumb Questions, an InsureFi podcast. This content does not constitute personalized financial or legal advice. This podcast is written, produced, recorded, and developed by Sarah Getman, Julia Taliessin, Riley Hines, Sidney Harrell, and edited by Angelica Coleman. Compare insurance quotes by clicking the link below.