With more than 60% of Chicago residents living in rental housing, there is a significant need for renters insurance in Chicago. Imagine coming home to find your apartment was broken into and your TV, laptop, and bike were stolen. Unfortunately, after experiencing a traumatic event, replacing your possessions will cost you if you don’t have renters insurance.
What is renters insurance?
Renters insurance covers incidents like break-ins that result in the damage or theft of a renter's belongings. Renters insurance is sometimes called tenant insurance. Along with theft coverage, it covers accidents or damage to the property from fire or neglect and legal claims due to injuries on the property. If the rental becomes uninhabitable, renters insurance covers the additional living costs for a hotel or another rental until repairs are complete.
Renters insurance is an excellent way for tenants to protect themselves and their belongings, though there are a few limitations. First, tenants should know how much coverage they need to insure their belongings. If they own high-value items or have a lot of items, they will want to be sure the coverage limits are not exceeded.
What renters insurance covers for tenants
There are two types of renters insurance policies. A replacement cost policy pays the cost of replacing damaged or stolen items, minus the deductible. An actual cost policy pays what the property was worth when it was stolen, minus the deductible. For example, if your four-year-old smart TV was stolen, a replacement cost policy would pay enough to buy a new smart TV of similar quality. The actual cost policy would pay what the TV was worth at the time of the theft.
Renters insurance in Chicago also covers damages from accidents that could otherwise quickly drain a renter’s savings. For example, suppose you left the washing machine running when you went to work, and there was a leak in the piping, which caused a flood that ran into the downstairs apartment. A renters insurance policy covers this type of damage up to the coverage limits.
If a friend is visiting and they trip and injure themselves, and their phone smashes against the wall as they fall, renters insurance would cover their medical bills and the cost of replacing the phone.
Lastly, if your rental apartment becomes uninhabitable because of a fire, tornado, or a broken window, renters insurance would cover the cost of a hotel when your apartment is unavailable to you.
Renters insurance is an inexpensive way to protect your belongings against break-ins, theft, and liability in the case of an injured friend or an uninhabitable apartment.
What renters insurance doesn't cover for tenants
The main issue tenants miss regarding renters insurance is the coverage limits. When tenants purchase renters insurance, they often do not buy a policy that covers the value of all of their belongings if there is a claim. It’s best to inventory your possessions and know what type of policy you need before buying insurance.
Renters insurance does not cover damage to the structure of the building itself. This falls under the landlord's property insurance unless caused by a tenant’s neglect. Renters insurance does not cover damage from major weather events like earthquakes, floods, sinkholes, and landslides.
If a tenant’s pet causes damage by scratching or biting at the floors, walls, or window sills, it’s not covered by renters insurance. Neither is the remediation of pest infestations (including bed bugs).
A typical renters insurance policy does not cover a roommate's belongings unless they are specifically named as one of the insured, or they get their own renters insurance policy.
Is renters insurance required in Chicago?
Even though renters insurance is not required in Chicago, it’s important for renters to understand that their possessions are not covered under their landlord’s insurance policy. Because of that, more landlords require it as part of the lease agreement. Renters insurance helps tenants and landlords avoid potential disputes regarding damaged property and liability in legal claims. It helps everyone get back to normal if a loss event occurs. Landlords can build trust and authority with tenants by educating them on the value and affordability of renters insurance.
What is the average cost of renters insurance in Chicago?
Renters insurance is affordable in Chicago. It costs $124 annually or $10 monthly, which is 22% less than the national average. Renters insurance is a low-cost way of protecting personal belongings and is cheaper than replacing stolen or damaged items or paying damages in a liability claim.
Four main factors that affect renters insurance rates in Chicago:
- Severe weather: If you live in an area with a high risk for severe weather like tornadoes, you will have a higher insurance premium.
- Personal property: If your belongings are high-dollar or you have a lot of possessions and want them to be covered, your premium will be higher.
- Coverage amount: No matter what type of renters insurance you purchase, you will pay a higher premium if you want a higher coverage limit.
- Location: Your neighborhood affects your premiums. If your neighborhood has a high crime rate, you will pay more for your insurance.
Why a landlord in Chicago might require renters insurance
Landlords encourage tenants in Chicago to buy renters insurance to cover the value of their personal property and cover liability. Even the most careful tenant might do accidental but massive damage to their rental unit.
There could be weather events that are not considered catastrophic, like a tornado or ice storm, which the landlord cannot foresee happening but affect the renter’s ability to live in the apartment or house. In those cases, having renters insurance helps the tenant by paying for an alternative place to live while the property is being repaired.
A renters insurance policy reduces risk and makes the claim process easier if something goes wrong.
How landlords should notify tenants about getting renters insurance
Landlords should be upfront about their requirements for rental insurance during the application process. If a tenant is coming up for renewal, the landlord can send a letter stating that rental insurance is now a lease requirement. This way, tenants would need to purchase rental insurance to renew their lease.
How to get renters insurance through RentSpree
RentSpree partnered with the renters insurance company, Sure, to provide fast and efficient coverage. RentSpree is a property and tenant management platform that landlords can use to help them manage their property. Tenants can also use RentSpree to easily apply for available apartments, pay rent, and purchase renters insurance.
How RentSpree’s renters insurance works
Landlords can select a property on the website, label it as requiring renters insurance, and notify tenants that they’re required to obtain renters insurance. Once purchased, tenants can either upload proof of an active policy or purchase renters insurance conveniently through RentSpree.
Invite tenants to purchase renters insurance with RentSpree
Through RentSpree, tenants can sign up for renters insurance while signing their lease. RentSpree will send the landlord proof of insurance and save it on the tenant dashboard in case it needs to be sent to another party. Rental insurance through RentSpree is seamless, streamlined, and easy.