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Landlords know how important insurance can be, especially when it comes to protecting their properties. However, tenants aren't really covered if there's a natural disaster or event. They need to have renters insurance. What does it cover, and how does it work? These are the questions both tenants and landlords want to know.
In fact, renters insurance coverage is so confusing that the Culverhouse College of Business has created a brochure to help people understand what it offers.
This guide will help you understand everything you need to know about renters insurance in Alabama. You'll learn what personal property is covered, the amount tenants might pay per month, and the top companies offering renters insurance. Let's jump in!
What Is Alabama Renters Insurance?
Alabama renters insurance covers a tenant's personal property after they're damaged from storms, fire, and other covered perils. It also protects them against theft. Overall, renters insurance will also help with liability if someone gets injured on their rental property.
Renters insurance is considered a necessity because the state often sees hurricanes, floods, and other natural disasters. Though floods aren't usually covered in a traditional renters insurance policy, most companies offer endorsements for flood insurance.
Generally, renters insurance is fairly cheap, but it's often hard for tenants to know how to select a policy. This article will give you the information you need. Then, you can either share it with your renters or tell them what you learned.
Average Cost of Renters Insurance in Alabama Per Year
The average cost of renters insurance in Alabama runs about $278 per year, which is roughly $23 per month. Most people focus solely on the renters insurance rates they'll pay when finding a policy. However, there are other things tenants should consider.
In a sense, the exact price of renters insurance will vary because of many factors beyond the company chosen. Tenants won't know exact rates until they determine their coverage needs and budgets.
How Much Does Alabama Renters Insurance Cost (Based on Popular Cities)?
Did you know that the average cost of renters insurance in Alabama can vary based on the Zip code? Renters insurance rates are often higher in Fairhope, though it's lower in Alabaster. Here are the prices tenants can expect to pay for renters insurance by city, according to ValuePenguin:
- Tuscaloosa - $298 per year
- Pelham - $313 per year
- Montgomery - $360 per year
- Mobile - $606 per year
- Fairhope - $695 per year
- Birmingham - $466 per year
- Auburn - $304 per year
Does the State of Alabama Require Renters Insurance?
State laws don't require tenants to get Alabama renters insurance, but landlords can make them carry it as part of the lease agreement.
Landlords have their own coverage, which protects them from structural damage and the like. However, it won't shield them from everything that might go wrong. Therefore, it's wise for a property management company and landlord to require tenants to have renters insurance for reduced liability risk and more safety.
Even if you don't require tenants to carry renters insurance, you should mention it to them. That will help them plan their budgets and protect themselves.
What Does Renters Insurance Cover in Alabama?
Alabama is known for flooding, which is the most common natural disaster in the state. This happens because it has a lower elevation than other states. Likewise, it's susceptible to tropical storms, hurricanes, and thunderstorms.
In most cases, renters insurance companies in Alabama will cover those situations under the standard renters insurance policy. However, renters insurance won't protect against floods, so renters will need flood insurance.
Generally, renters insurance is there to protect tenants from emergencies they can't foresee or predict. A covered peril is an event where the insurer reimburses the tenant after they have filed a claim. Here are some of the more popular covered events a renters insurance policy will cover:
- Lightning
- Accidental water discharge (plumbing failures)
- Weight of sleet, ice, and snow
- Windstorms and hail
- Vandalism, riots, and civil disruptions
- Theft
- Smoke
- Fire
- Electrical surges
- Falling objects
- Explosions
A standard renters policy will likely cover theft, liability, loss of use, medical payments, and the tenant's personal property. Let's learn more about them.
Liability Coverage
Liability coverage will protect the tenant against a lawsuit from someone who suffered property damage or bodily injuries that you or a family member caused. It will also cover the legal fees.
For example, someone visits the tenant's property and is bitten by the dog. Liability coverage pays for the injuries.
Personal Property Coverage
Personal property coverage will pay to replace or repair the property that was destroyed, damaged, or stolen from covered perils. It's a standard part of a renters insurance policy.
Medical Payments
This part of the renters insurance policy will pay for medical care if someone is hurt in the rental unit, regardless of who was at fault. It can also cover expenses if a tenant injures someone outside the unit.
Loss of Use
Loss of use will cover a tenant's basic living expenses, such as toiletries, meals, and housing, if their rental unit is uninhabitable because of destruction or damage. It's often part of all renters insurance policies.
What Does Renters Insurance in Alabama NOT Cover?
Renters insurance in Alabama typically will not cover damages to personal belongings because of natural disasters like earthquakes and floods. However, tenants can get additional coverage for those events in a separate policy.
Likewise, renters insurance probably won't cover damages from pests or business-related losses. Some renters insurance policies will offer business damages as an endorsement. However, the tenant should tell the provider to ensure they get appropriate amounts of coverage.
Overall, renters insurance will only reimburse the tenant up to their coverage limits. Therefore, expensive items, including electronics and jewelry, might not automatically be covered. Tenants should ask the insurer about exclusions and limits before buying a policy.
How to Choose the Right Policy
Tenants will likely want to find the cheapest renters insurance companies in Alabama because they wish to save money. Here are a few tips to help:
- Compare Renters Insurance Quotes - It's wise to compare renters insurance quotes from at least three companies to ensure the tenant gets the best deal.
- Discounts - Discounts can help tenants find an affordable premium for renters insurance.
- Enough Personal Property Coverage - Reputable renters insurance providers will have many options to meet the tenant's needs. Basic ones are often what most people get, but it's wise to check into unique features and add-ons.
- Customer Satisfaction - Read reviews from trusted websites to see how the renters insurance company performs.
- Technology - It's often easier for tenants to use an app or website to get quotes and file claims. Technology will help them save time while they pay bills, check claims, review documents, and more.
- Price - Tenants shouldn't have to pay high fees for renters insurance. Therefore, it's wise to check for the lowest rates, but remember that it's not all about the cost.
Available Renters Insurance Discounts in Alabama
It's possible for tenants to lower their renters insurance rates by using discounts. However, it's important to realize that each company is different.
Here are the top renters insurance discounts available:
- E-discounts
- Claims-free discount
- Multi-policy discounts
- Autopay
- Loyalty discount
- Protective devices discount (smart home technology, sprinkler systems, etc.)
- Higher deductible discount
- Welcome discounts
- Occupation discounts
- Smoke-free discounts
- Early shopper discount
- Secured community discount
- Pay-in-full discount
How Does a Renters Insurance Policy Protect the Landlord or Property Manager?
Most people focus on the benefits of renters insurance coverage for tenants, but how can it help a landlord?
Here are the reasons to consider requiring renters insurance in Alabama:
Protection from Lawsuits
One of the biggest reasons to require tenants to have renters insurance in Alabama is that it will protect you from lawsuits if the tenant's belongings get damaged within the property because of a natural disaster or fire.
You might think your liability coverage will protect you, but it probably won't.
No Personal Property Damage Payments
Similar to lawsuits, tenants can sue you for damages to their property if they can't cover it. Though you might think they're nice, you can't assume they'll behave rationally after an accident or emergency. Renters insurance may protect you more than you know.
Keep Your Premiums Down
When tenants don't have renters insurance, you might be hit with damage claims and lawsuits. Though that means you're paying money out of pocket, it also means your insurance premiums might increase. Sometimes, insurers will cancel policies if there are too many claims.
Allow Pets
Most landlords don't think that renters insurance has anything to do with pets. However, it might cover property damages that come from having pets and offer liability for dog bites.
However, tenants should check with the company to ensure the policy covers pets because some don't.
Top 5 Best and Cheap Renters Insurance Companies in Alabama
As a landlord, it's helpful to know what the cheap renters insurance companies in Alabama are. You can give this information to your tenants and get peace of mind. The top choices include:
1. Allstate
Allstate might not be the cheapest renters insurance company out there, but it has a great multi-policy discount. If you bundle auto insurance and renters insurance, you can save 25 percent off the renters policy and 10 percent off the auto policy. Plus, the website is very easy to use and has educational resources.
Overall, Allstate has a decent per-month charge, and it has coverages that other insurers don't offer, such as:
- Electrical current
- Malicious mischief
- Theft outside rental
The discounts available include:
- Multi-policy
- Claims-free
- Autopay
- Safe home
- Older generations
Get a quote online today!
2. Liberty Mutual
Liberty Mutual is a great company that offers cheap renters insurance in Alabama. The national average is lower here than with other insurers.
For about $5 per month, renters can protect their belongings and keep them safe. However, the monthly price depends on many factors, including the safety of the neighborhood, coverage amounts, and the total value of property.
There is replacement cost coverage, but it comes at a higher rate, which can raise the tenant's bill.
Here's a list of the discounts available from this brand:
- Paperless discount
- Autopay
- Protective devices discount
- Continuous coverage discount
- Claims-free
- Multi-policy
Tenants can get a quote here.
3. Farmers
Farmers is a great source for renters insurance. It offers many discounts and various coverages to meet the tenant's needs. Overall, it's a great choice because it provides:
- User-friendly website
- Great mobile app
- Access to excellent customer service
- Multiple ways to file claims
- No red tape for cancellations
If tenants need a low per-month price, Farmers renters insurance may be the best solution. Discounts include:
- Smoke-free discount
- Welcome discount
- Occupation discounts for firefighters, police officers, teachers, and more
4. Progressive
Most people want the cheapest renters insurance coverage possible, and Progressive might be a great choice. The per-month price can be quite low, but if tenants need additional coverage and add-ons, it might be a little more expensive. Still, it will give more peace of mind.
Some add-ons include:
- Increased coverage for collectibles and more
- Water damage protection
- Personal injury protection
- Home computer coverage
The discounts available at Progressive include:
- Secured community
- Pay in full
- Electronic documentation
- Quote in advance
5. State Farm
State Farm is one of the top and largest insurers in the insurance industry. It has a great website, tons of renters insurance coverage options, and excellent customer service.
In fact, it stands apart from the crowd because it offers replacement cost coverage as standard. This might mean tenants pay a little more per month, but it makes all the difference if items are destroyed or damaged after a covered peril. Therefore, there is no depreciation to consider.
Discount options include:
- Higher deductibles
- Multi-policy discounts
- Safety discounts
What Is DoorLoop?
Knowing about renters insurance in Alabama is a great first step. However, landlords have to keep track of so many things, which becomes confusing. DoorLoop is an all-inclusive property management software that helps landlords of all sizes. It doesn't matter if they manage commercial or residential properties, either.
DoorLoop will help you
- Manage your portfolio.
- Manage maintenance requests with ease.
- Collect rent effortlessly.
- Offer a tenant portal.
- Manage accounting tasks.
- Use the free and custom website to help tenants apply online and market the landlord's vacancies with ease.
Learn more and schedule your demo with DoorLoop today!
Why Work with DoorLoop
With DoorLoop, it's easy to require tenants to have renters insurance policies. They can submit their own through the tenant portal and the application. However, we've made it effortless for them to apply for renters insurance directly on the site. This is powered by SURE/Lemonade, depending on the state.
Find out how DoorLoop can assist you in requiring renters insurance for your tenants today!
Frequently Asked Quesitons
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