6 Mistakes People Make With Renters Insurance and How to Avoid Them

By Kaitlin Hurtado on December 29, 2019

The thought of renters insurance may make you sigh in frustration. Why do you need to shell out even more money that you aren’t really seeing working on something in action? However, though it is not always required when renting, renters insurance can save you from pretty sticky situations. From theft to natural disasters, renters insurance can save both you and your money.

Renters insurance, also often called tenants insurance, is a type of insurance policy that is similar to homeowners insurance. It protects you, the renter, in the case of an event where your personal property is damaged in different scenarios. There are different policies with varying amounts of coverage – there’s a renters insurance policy out there to meet your needs.

Renters insurance isn’t hassle-free. There are common mistakes that many people make when it comes to renters insurance. Keep reading to find out what the common mistakes are and how you can avoid making them.

renters insurance

Photo: Pexels

Mistake #1: Not buying renters insurance because you think you will not need it or it is not a requirement

Yep, you guessed it. The most common mistake surrounding renters insurance is not actually buying it. As life-saving as it can be, it is not always required by landlords when signing a lease agreement. You may think it’s saving you the money and hassle of finding a renters insurance policy, but it leaves you very unprotected as a renter. Not buying a renters insurance is not preparing yourself for the worst-case scenario – leaving you in an unfortunate situation if there comes a time where your property is damaged.

Just bite the bullet – think of renters insurance as an investment toward yourself and your belongings, because it is. By purchasing a renters insurance policy, you are effectively taking steps to protect you and your belongings. When you think of it that way, a monthly payment doesn’t seem so bad in the grand scheme of things, does it?

Basic renters insurance policies protect you from unfortunate accidents and often include protection from damages from fire, strong winds, lightning, vandalism, smoke, theft, a broken pipe. You can also opt for coverage for your personal property for those valuable jewelry pieces or electronics, liability protection for your guests, and additional living expenses if you feel like you need it (spoiler: you mostly always will).

Mistake #2:  Not considering multiple options of renters insurance from different insurance providers 

Renters insurance, just like car insurance or health insurance, is not one size fits all. While you may think that the first renters insurance policy you come across is the perfect fit, there may be a renters insurance policy better suited for you. Don’t be afraid to take time to shop around and weigh your options. There are plenty of tools online to help you compare different renters insurance providers.

For example, this one from Supermoney offers a comprehensive guide to comparing different renters insurance policies available to you. They have different providers sorted by ranking, from most recommended to least recommended — all based on actual customer reviews. They give helpful information on leading renters insurance providers for customers, including:

  • Lemonade Renter’s Insurance offers liability coverage, personal property protection, and property damage coverage
  • Liberty Mutual Renters Insurance offers the options listed above as guest medical protection, identity theft insurance, and are conveniently available by phone 24/7
  • USAA Renters Insurance offers all the options listed for the above insurance providers, along with reimbursed living expenses.
These are just a sample of the seemingly countless amount of renters insurance providers out there – so don’t be afraid to shop your options!
Tip: Uloop writer Francine Fluetsch’s article, “How to Choose the Best Renters Insurance Policy for You” offers plenty of guidance when it comes to narrowing down the right renters insurance policy for yourself.

Don’t go for the cheapest option as well. Just because an insurance policy looks enticing due to low premiums, doesn’t mean it is actually the best renters insurance policy just for you. It may not provide the amount of insurance coverage you actually need, which brings us to common mistake #3.

Photo: Pexels

Mistake #3: Underestimating the amount of renters insurance coverage you’ll need

Renters insurance is not going to be the insurance policy to break your bank — on average, a renters insurance policy costs around $100 a year. $100 seems like small change when you compare it to what you would pay in the case of an unfortunate event and find yourself without protection from a renters insurance policy. What is $100 a year in comparison to thousands in property damages that lead to replacement and repair costs, which can only be covered by you?

Corey Brinkman, the regional vice president of Renters Warehouse St. Louis – a company that manages thousands of homes across the country, told Quote Wizard the importance of renters insurance. “Most tenants don’t have renters insurance because they simply don’t have all of the information. They think they’re saving money, when in fact, renters insurance is relatively inexpensive,” said Brinkman.

He continued, “You can get coverage for as little as $10 to $20 a month, and it can protect you if there’s a fire or damage. As a professional landlord service, we have seen firsthand how not having renters insurance can devastate both renters and landlords. They are always sorry they didn’t have it.”

In the event that your policy needs to cover you, it comes as actual cash value (ACV) or replacement cost. Actual cash value will insure your personal belongings for what they were worth at the time of purchase, minus depreciation. Replacement costs are what it will cost to replace your belongings to their original condition, and it is also the more expensive option when it comes to personal property protection. Replacement cost coverage is more recommended as it offers you more coverage, giving you money for your belongings regardless of their existing conditions.

If you think that you do not have enough valuable items to qualify for renters insurance, you are wrong. Protecting your belongings not all about collectibles and jewelry, but everyday items like appliances and furniture pieces. Those things may seem insignificant, but the cost of replacing them can be costly and overwhelming if you are not properly covered by a renters insurance policy. Imagine a fire takes place in your apartment, damaging your belongings. It’s not just the valuables you are gonna replace, but everything that was lost – the sofa, your mattress, your bedding.

renters insurance

Infographic by Kaitlin Hurtado

Liability insurance is offered in $100,000 increments, and most insurance agents will suggest buying at least $300,000 in liability insurance coverage, if not more. This will come in clutch in the case that someone injures themselves on your property, whether it be a faulty step on the staircase or an accidental fall. Liability insurance can cover anything from medical fees that accumulate from an accident that took place on your property, or in legal fees in the event that someone pursues legal action against you for something that happened on your property.

This mistake also includes thinking it is okay to skip out on riders, endorsements, and floaters — all of these are add-ons that increase coverage, and all of them are optional. You may think that the basic personal property coverage limits are enough to cover you in the case of an event, but they may barely cover a fraction of your belongings with their set caps on more valuable items (collectibles, electronics, jewelry, antiques).

  • Endorsements offer protection with events not included in your policy, like losing a piece of valuable jewelry.  This one can be a bit tricky so be sure to understand the entirety of it and get your items appraised for their value if needed.
  • Agents advise people to keep photos of their belongings digitally so in the event of something like a fire, you have an inventory of your belongings and what state they were in. Be sure to take inventory regularly to have an up-to-date account of your belongings.
  • Endorsements, floaters, and riders create higher premiums for you to pay but may be very worth the cost if you have plenty of valuable belongings to protect.

Mistake #4: Consider doubling up on insurance policies from insurance providers for potential discounts

If you already have auto insurance, why not make things easy on yourself and take out renters insurance from the same provider? This may not be the case if they don’t offer policies for renters insurance, but many providers may offer discounts for existing customers taking out more than one policy. Why not save money when you can, especially if you already know when a specific insurance provider works for you?

It never hurts to ask or look. If you find that an insurance provider offers a reasonable renters insurance, you may be able to switch over your auto insurance for another discount. However, do be wary. While an insurance provider may provide you excellent auto insurance policies, they may not be able to do the same when it comes to rental insurance policies. Be sure to investigate into their different policies and find reviews when possible. Consider your options for what gets you the most out of your money even if it requires a little more investigated – saving money from a discount can definitely make it worth it.

Mistake #5 Miscalculating your deductible and premiums for your renters insurance 

Depending on the type of policy you take out for renters insurance you are going to be paying specific amounts for your deductible and premiums. A deductible is the amount of money you pay yourself when you first file a claim for your insurance coverage to kick in. Premiums are the amount of money – typically monthly payments – you pay to your insurance provider. The higher your premiums, the lower your deductible is, and vice versa.

 Make sure you decide both amounts with your budget in mind. If you want to make lower monthly payments in order to save up to pay for the higher deductible in the case that you need to file a claim, do so. However, just because you want to save money now, does not mean you should automatically opt for lower premiums. You don’t want to choose to pay lower premiums, only to have your savings wiped out when you find yourself having to pay your high deductible. Make sure you find an amount for both that works for you in different situations.
Mistake #6: Leaving out flood insurance coverage
When looking for a renters insurance, many basic renters insurance policies do not include coverage for damage from flooding. Many think that because other common natural disasters are covered in basic renters insurance policies, flooding is also covered but they are often not included in basic renters insurance policies. Many may think this isn’t a big deal, especially if you live in a low-risk flooding area. However, life happens and flooding can affect your home, no matter where you are.
Make sure to assess your risk for flooding for your home when considering renters insurance. You don’t want to be spending money on renters insurance, only to not be protecting yourself and your belongings from one of the most damaging incidents – flooding.

Just because it is not required, doesn’t mean you can just skip out on renters insurance. It’s an investment worthwhile, and with these tips in mind, a hassle-free one.

And if you still want more information on renter’s insurance, be sure to check out these articles on Uloop, all offering helpful information on renter’s insurance:

  • 4 Common Questions Students Have About Renters Insurance” by Tamiera Vandegrift. From defining renters insurance to seeing what kind of coverage you can get for your money, Vandegrift offers answers to common renters insurance questions.
  • What Does Renters Insurance Cover?” by Brittany Loeffler. This article provides an in-depth look at the type of coverage you can expect with renters insurance.
  • 8 Reasons to Get Renters Insurance” by Victoria Robertson. Still hesitating on getting renters insurance? Robertson offers 8 clear reasons why getting renters insurance is the right and smart move for you and your belongings. No further convincing needed after this read.

By Kaitlin Hurtado

Uloop Writer
Hello! I'm Kaitlin, a fourth year Literary Journalism major at UC Irvine. I'm a writer on Uloop's national team and a campus editor for UCI.

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