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The insurance market is saturated with dozens upon dozens of insurance companies, carriers, agents, brokers, marketplaces, and aggregators all offering “the best” renters insurance policies, coverage, and discounts. In an ideal world, that would mean companies are competing for their customers’ business by offering genuinely great deals. We don’t live in an ideal world, however, and not all insurance policies are created equal.

Luckily, not all renters’ situations are created equal either. The best policy and policy provider for Tom isn't necessarily the most appropriate for Harry. The downside of this, of course, is that navigating the industry can be extremely frustrating, especially if you also have a job, family, and personal issues to manage.

In order to make the decision on whether to get a renters insurance policy, it is important to know what’s covered, the three types of coverages typically available, and what to watch out for when purchasing your own policy. The editorial team at Money studied the market and this is some of the information they gathered.

Please note that each insurance company has different exclusions and coverage limits. Not fully understanding what's included and excluded could lead to problems and frustrations down the road when you have to file a claim.

There are three essential types of coverage:

  • Personal property: Anything that belongs to you that isn’t part of the physical structure of the place you are renting. In many cases, personal property doesn’t need to be inside your home in order to be covered by your policy—think in a hotel room when traveling, or even in your car.
  • Personal liability and Medical Payments to Others: Accidental damage or injury (including pet bites) to someone else while on or in your property. If an accident occurs that requires someone else to seek medical attention, the insurance could also potentially cover that person’s healthcare costs.
  • Loss of Use, also known as Additional Living Expenses (ALE): If your living space becomes unavailable due to events outside your control (fire, water damage, etc.), the insurance company will cover any expenses whether in a hotel or other lodging space while yours is fixed.

They may even cover the cost of boarding a pet, storing property, or transportation costs to and from work at your temporary accommodation.

Once you’ve determined the best type of coverage that fits your lifestyle, take a detailed look at determining your coverage limit. It varies depending on the type of coverage chosen!

Note that there are some typical exclusions for coverage. These include animals, your roommates and their belongings, and even flooding or earthquakes. It’s always important to ask your provider what these include.

Insurance is all about risk management. If an insurance carrier considers you to be negligent, to have a questionable credit history, or to lack enough security measures in place, or if you have frequently missed payments or have a criminal record that deems you a “moral risk”, your carrier might cancel your policy or outright refuse to insure you.

One way to minimize the risk of your policy being canceled is to demonstrate consistent responsibility: keeping receipts (especially of your most valuable belongings), maintaining your property (general upkeep), taking safety measures (having alarms, deadbolts, and smoke detectors), and most importantly, updating your insurer of any events and changes to your property or situation. Although this constant accountability might seem like a lot of work, it can save you time and money at the moment of filing claims and prevent an insurer from cancelling your policy. Again, it comes down to how you are minimizing risks.

If you’re not a homeowner, for which you would need homeowners insurance, or a college student living on-campus, covered by your parents’ or the university’s insurance, you definitely need renters insurance. Many people think that they don’t need renters insurance because they do not own many things of value. However, the lowest insurance deductible tends to be $500. Unless you own less than that in valuables, not having insurance is increasingly risky.

An affordable laptop costs around $150. Low priced television screens go for around $100, and generic smartphones can be as low as $55. Together, that’s already $300. Add in a couple of books, a video game console, and a handful of gadgets, and you’ve got at least $500 worth of property.

Many renters average $25,000-$30,000 in property value. An average of $16 a month is definitely worth the peace of mind of knowing you will be covered if disaster strikes and that’s not even considering loss of use and personal liability if someone has an accident while at your place. Families and customers with higher coverage needs (over $50,000 in personal property) would likely pay more than $30 a month, though this is still a small amount in comparison to the value covered.

Insurance is all about risk management. If an insurance carrier considers you to be negligent, to have a questionable credit history, or to lack enough security measures in place, or if you have frequently missed payments or have a criminal record that deems you a “moral risk”, your carrier might cancel your policy or outright refuse to insure you.

One way to minimize the risk of your policy being canceled is to demonstrate consistent responsibility: keeping receipts (especially of your most valuable belongings), maintaining your property (general upkeep), taking safety measures (having alarms, deadbolts, and smoke detectors), and most importantly, updating your insurer of any events and changes to your property or situation. Although this constant accountability might seem like a lot of work, it can save you time and money at the moment of filing claims and prevent an insurer from cancelling your policy. Again, it comes down to how you are minimizing risks.

Lastly, there are ways to save. Some insurances will give ‘bundle discounts’ if you have other insurance or services with them. Other saving methods involve having safety devices installed in your home such as smoke detectors, security cameras, alarms, deadbolts, and more. There’s never harm in comparing quotes, doing some research about coverage before making your choice and asking your providers what type of discounts they might offer. Visit Money.com to read more about their findings on renter’s insurance and more.