Everything You Need to Know About Homeowners and Renters Insurance

Renters insurance is often overlooked by many people who do not own their homes. However, it is a critical protective measure that may save renters a major headache later on. Many people think they are protected in the event their homes get broken into, or damage occurs to their belongings. However, a landlord’s insurance policy typically covers the general property, and may not cover items in a rental that can get stolen, damaged or destroyed.

Homeowners insurance is just as important as rental insurance. While the names of these policies are similar, they are actually two very different types of coverage. For instance, mortgage lenders usually require home buyers to purchase an insurance policy. In addition, homeowners coverage insures the actual home, and a basic policy does not often include protection against property damage. To learn more about the importance of these two types of policies, continue reading below.

What does renters insurance cover?

If you are looking for cheap renters insurance, it is important to first review basic coverage options and add-ons. There are three main components to this type of coverage that may help you in the event of a natural disaster, break-in or similar emergency situation.

How much does renters insurance cost? Generally, it depends on the type of coverage you want. Adding onto your basic plan will raise your deductible and your premium. It also depends on where you live, the value of the items you want to protect and your credit history.

In addition, the best renters insurance will not necessarily charge you the most money. It is important to compare quotes from several different companies. When comparing quotes, make sure you ask for the same type of coverage from each company, so that your comparisons are accurate.

What does renters insurance cover? While it is more common to get coverage on an apartment, you may also get coverage for a condo or a house. The three main types of coverage include:

  • Personal property.
  • Liability.
  • Additional living expenses.

Covering your personal property may significantly reduce the cost of replacing a stolen or damaged valuable. Most plans will protect your belongings against risks or “perils,” including fire or theft. Every policy will also have a coverage limit, or a maximum amount that the company pays for damages or losses.

Liability coverage on apartment renters insurance may protect you if a person is injured and you are responsible. It may also cover the cost of another person’s property damages if you are responsible.

Finally, coverage on additional living expenses may help you pay for certain other costs associated with property damage. For instance, your policy may cover you for hotel costs if a natural disaster occurs, or for food expenses if you have to go above your normal food budget.

What are some of the most popular renters insurance options?

Is a popular plan such as State Farm renters insurance worth it? Ultimately, it depends on your needs and preferences. It is important to look not so much at the name of a company, but at its policies and customer ratings.

After performing a lot of research, you may still select a popular plan. However, you will be making an informed decision and will have a better chance at getting the best rate available.

Some of the most popular plans include:

  • Progressive renters insurance. While coverage may vary from state to state, Progressive promises to cover clothing, electronics, furniture, decorations, games such as pool tables, tools and appliances. Remember that there is a per-item limit for each category. You may also add on coverage for backed-up plumbing systems and personal injury, in the event of lawsuits that aren’t covered by liability.
  • Assurant renters insurance. While it is typical for renters to purchase a policy that gives them $25,000 of coverage, Assurant offers plans that will cover $5,000 to $95,000 in personal property, depending on your state. Thus, you may customize your plan to meet your needs, all while still getting the basic coverage options available.
  • Lemonade renters insurance. Lemonade offers a very modern take on renter’s coverage, with an app that claims to give you insurance in 90 seconds and payment on certain claims in three minutes. You may choose all the basic forms of coverage and add-ons if necessary. Plans start at $5 a month, though the average policy costs about $15.50 per month. Keep in mind that Lemonade is not available in every state.
  • Allstate renters insurance. As with State Farm renter’s coverage, Allstate offers additional liability coverage, identity theft restoration coverage and full-value coverage, which may protect you if your jewelry, art or other very expensive items are stolen. Generally, the amount that an Allstate policy may pay per jewelry item is $1,500.

What does homeowners insurance cover?

While home insurance may seem like just another expense to add to your mortgage, it is actually a good investment strategy and may offer you very helpful protection. If a disaster were ever to occur, you may not be able to cover it with your savings alone.

Home insurance companies typically offer two main types of policies: the HO-2 and the HO-3. HO-2 policies typically cover named perils, which include, but are not limited to:

  • Fire or lightning.
  • Theft.
  • Vandalism.
  • Windstorms and hail.
  • Damage caused by vehicles and aircraft.
  • Damage caused by ice, snow and sleet.
  • Riots.
  • Explosions.
  • Falling objects.

An HO-3 policy may give you coverage beyond named perils. In fact, it may cover you for all perils, except ones that are explicitly excluded. For instance, policies typically will never cover flooding, earthquakes, landslides, mold, infestations, nuclear hazard, government action and regular wear and tear.

The best homeowners insurance policies will provide the following types of standard coverage:

  • Damage to the home and attached structures
  • Damage to stand-alone structures, such as a fence or a swing set
  • Additional living expenses coverage, in case you need to stay in a hotel for a few days
  • Protection of personal property
  • Liability coverage, if you are responsible for someone’s injuries on or away from your property
  • Medical payments coverage, if you are required to pay for someone’s medical bills

Keep in mind that these type of coverage options are available for non-traditional homes as well. For instance, you may purchase mobile home insurance, condo insurance and more.

If you are looking for cheap homeowners insurance, you will want to stick to the standard policies and not include any add-ons. The cost of your premium may also vary depending on your state and your credit rating.

What are some of the most popular homeowners insurance options?

As with renter’s coverage, make sure you compare home insurance quotes from at least three companies and ask for the same type of coverage from each company.

Some of the most popular providers include:

  • Geico home insurance. Geico offers standard policies that will give you broad coverage for property damage, personal property damage in the form of named perils, limited coverage for jewelry and more. You may also choose your policy based on your home. For instance, a single-family home policy is not the same as a condo or co-op policy.
  • Progressive home insurance. Progressive is similar to Geico in that it offers traditional coverage options and several different add-ons. You may also save on your policy by installing fire alarms, burglar alarms, security systems and automatic sprinklers. If you are buying a new home, you may earn another discount as well.
  • USAA home insurance. USAA offers traditional policies that cover property damage, personal property, limited coverage and liability. It also has umbrella insurance, which may protect you for certain expenses in the event of a lawsuit. For instance, it may protect your savings, assets and investments, and pay for legal defense costs.
  • Allstate home insurance. In addition to providing standard coverage options and add-ons, Allstate also offers a host advantage policy and flood insurance. Host advantage may protect your belongings from damage or theft if you are home sharing. Flood insurance may help you buy coverage through the National Flood Insurance Program (NFIP).

What are the advantages of bundling home and auto insurance?

Many popular companies offer home and auto insurance, which combines two of your most important types of coverage. Bundling these two policies will save you time and effort, because you will not have to research other companies and compare quotes. It is also beneficial to your provider, because you are not taking your business elsewhere.

The best home and auto insurance providers will give you excellent discounts to make bundling worth your while. For instance, Geico’s multi-policy discount may save you money if you were going to purchase two separate policies.

If you want to bundle your car and home insurance, however, it is still important to do your research. Combining these policies for the sake of ease may actually be a disadvantage if you do not compare quotes. If you do not want to change your provider entirely, you may research different quotes and then present them to your agent to see if you can work out a better deal.

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