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How Do You Compare Renters Insurance Coverage?

Updated: January 2020

You don't need to own your home to benefit from insurance. In some cases, your landlord may even require you to get renters insurance before moving in. Whether it's required or not, renters insurance may help protect you in the event that your belongings are damaged or stolen. If you're new to renters insurance, you may be wondering how to choose the coverage that's right for you.

The Insurance Information Institute (III) suggests getting renters insurance quotes from at least three insurance companies to compare prices. But keep in mind that not all insurance policies are alike. The III says renters should not select a policy based on price alone. Be sure to compare the types of coverage each policy includes. And, says the III, choose an agent who takes the time to answer any questions you may have. Here are some tips to help you get started comparing renters insurance coverages.

Video Transcript

If you're shopping for renters insurance, you're probably already comparing prices. But you may want to consider other factors as you decide which policy is right for you.

Once you have multiple renters insurance quotes in hand, start by looking at the coverages each one offers.

For instance, most renters insurance policies include coverage for personal property, liability and additional living expenses.

Personal property coverage may help protect your belongings from certain risks, such as fire or theft. You'll usually have to decide what type of personal property coverage you want: actual cash value or replacement cost.

Actual cash value takes into account depreciation of your belongings.

Replacement cost coverage generally provides reimbursement for the amount it would cost to purchase the same or a similar item today.

Then there's liability coverage. Liability coverage may help prevent you from paying out of pocket for costs such as medical bills if you are found legally responsible for a visitor's injuries or repairs if you cause damage to the home you're renting.

Finally, coverage for additional living expenses may help pay for temporary housing and certain other increased costs, such as restaurant bills, if your rented home becomes uninhabitable due to a covered peril.

Make sure the renters insurance quotes you're comparing offer the same coverages — at they all include the protections you want and need.

Next, keep in mind that every coverage has a limit. That's the maximum amount the policy will pay toward a covered loss.

Ask yourself, "Are the limits the same in all the policies I'm considering?" and "What limit am I comfortable with?"

Make sure the renters insurance policies you're considering have comparable coverages and limits. That may help you accurately compare your options.

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Look at the Coverages Offered

Most renters insurance policies come with a few standard types of coverage to help protect you and your belongings. To help with your comparison, you'll want to understand these basic coverages:

Personal property coverage.
This protection helps guard the belongings you keep in your rental home, such as furniture, electronics and clothing, from certain risks. Suppose someone breaks into your apartment and steals your television and stereo, or your belongings are damaged or destroyed in a fire. Personal property coverage may help pay to replace your stuff after an unexpected loss, up to the limits stated in your policy.

Liability coverage.
This type of coverage can help protect you against damages or medical bills that you may owe if someone is injured at your home or apartment and you are found legally responsible. Liability coverage may also help protect you if you damage the home you're renting. Suppose you accidentally start a fire that damages the kitchen. Liability coverage may help cover your expenses in the event that you are sued for damages.

Additional living expenses.
This type of coverage may help pay for expenses such as temporary housing if your rented home becomes uninhabitable due to a covered peril. Additional living expenses coverage may help cover the reasonable increase in living expenses, such as the cost of hotel stays and food, after a fire or other covered loss.

Compare the Coverage Limits

It's important to remember that limits will apply to each type of coverage, which means there is a maximum amount the policy will pay out for a covered event. Also, remember that choosing a higher deductible means your premiums will typically be lower. When requesting renters insurance quotes from multiple companies, it's important to make sure you select the same coverages, limits and deductibles from each insurer. Conducting a side-by-side review of multiple renters insurance policies may help you choose the coverage that best fits your needs — and help you make an apples-to-apples comparison between quotes.

Know The Difference Between Coverage Options

As you compare quotes, it's also important to make sure that they are each based on the type of personal property coverage you plan to purchase. Personal property coverage typically helps cover costs in one of two ways:

  • Actual cash value
    takes into account depreciation and only pays the amount you might expect to get if you sold the item today, the III explains. For example, you might have spent $1,000 on a couch 15 years ago, but with a policy that pays you actual cash value, you'd likely receive only a portion of the purchase price following a covered loss.

  • Replacement cost
    is the amount it would cost to buy the same item again new today, or if the same item is no longer available, one that is of like kind and quality. This type of coverage may cost a bit more, but may prove worth it in the event that you need to purchase new items after a covered loss, the III says.

To help determine how much stuff you own and how much it may be worth, you may want to create a home inventory. This information may also be useful in the event that you need to file an insurance claim.

Contact a local agent to request a renters insurance quote or to ask any questions you may have about your coverage.

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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2020 Allstate Insurance Company, Northbrook, IL.
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