Does Renter’s Insurance Really Work? YES!

As MFA is a site dedicated to apartment rentals, we endorse renter’s insurance because: 1) It seems like a smart idea to insure your stuff against the unthinkable and 2) It’s SUPER inexpensive for the value it brings (Alex and I have been paying around $150/year for up to $20,000 of coverage).

In this post, I won’t argue the merits of renter’s insurance again. Like most types of insurance, it’s to protect against the odds. For more information, please check out our previous post here.

Nope, in this post, I’ll be reviewing how well our renter’s insurance with State Farm worked when our apartment was burglarized. Here, based on the likely order of your questions are the answers:

So, did they pay up? Yes. Mostly. Renter’s Insurance is an interesting form of insurance as it often involves paying plan holders cash. And, therein lies the possibility for fraud (few people may try to rip off their health insurance for another doctor’s visit). As a result, the industry has decided, no doubt aided by their number-crunching analysts, to cover, in most cases,  the estimated value of your purchases. This means that if it costs $300 to re-buy a purse, but that your purse (had it not been stolen) is now only valued at $100, you’ll get $100. Only when you send them the receipt showing that you’ve rebought the purse will you gain the full $300 value. So, while they honored our claims, there’s around 2K left on the table should/when we submit our full value receipts.

It’s time-consuming and a bit frustrating, but I can understand why they do it. Happily, you do not need to submit your receipts for every item lost – though it can get you a higher value in terms of reimbursement.  An alternative is that State Farm was able to find about 10 electronic items we lost and did offer to purchase them for us directly.

How fast did we get our items back? The process took slightly over a month. Luckily, we had savings to re-buy our most important items (e.g. my computer, Alex’s computer mouse) before getting reimbursed. That said, purchasing before you see the insurance payout means the risk of paying more for items than the insurance covers. Why? Because if they can buy it cheaper, that’s all they will cover. So, it’s not a perfect system, especially for those without savings. But, it certainly didn’t take 6 months to get our $ either.  We also kept finding items that were taken after we submitted our initial claim, so we need to re-submit.

Were there any surprises? Yes – though not necessarily State Farm’s fault. In our policy, as in most policies, there are limits to the amount claimed per category of loss. For instance:  jewelry, electronics, furs, etc. Alex bought our policy and didn’t think to tell me the jewelry limit – assuming we would be under. Well, unfortunately, because we got robbed right after our wedding, I had some family jewelry at home that was taken. So, we were about 2K over  – that we’re now paying ourselves.

Overall, I had a pretty good experience with State Farm. I found them to be a touch disorganized but, on the whole, a good company to work with for Renter’s Insurance.

Have you had to put a claim in on your Renter’s Insurance? If so, how did it turn out? Share below!

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Author My First Apartment

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I've lived in apartments in 6 cities (including 2 foreign countries). Does that make me an expert? As of now, my ceiling isn't leaking and I don't have rodents (knock on wood) -- so I'm going to say yes . . . but ask me again tomorrow:) These days, I'm enjoying life Chicago style, but my years in Brooklyn are never far from my mind. P.S. By day I work at, but these opinions are totally, 100% my own.

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Comments (8)

  1. Avatar Blaine

    Been with whatever 36 years a pipe broke in my basement which ruined over 4600 dollars worth of stuff state farm said they will send me a check for 850.00 dollars that I have to buy the rest of the stuff and submit the receipts. I live on ssdi I don’t have the money to buy the stuff I told them this they could care less

    • MFA Editors MFA Editors

      Hi Blaine,
      We are in no way experts in dealing with insurance companies, but usually a best way in any dispute with a large company is to write a letter to the president and explain your situation. Give as much detail as possible, about how long you have been with the company, what happened, what was lost, why you cannot buy first and submit bills. Another approach would be to buy one item at the time and submitting bills one at a time and waiting for money to come before buying next item, although the policy may have a deadline for submitting the receipts. Perhaps one of our readers is in the insurance field and has a better solution.
      Good luck!

  2. Avatar NYS Licensed Insurance Agent

    There is the real problem with naive renters insurance customers. Any respectable insurance agent will include full replacement cost on your items to get the same like kind and quality you have at the time of loss. Judging by the scenario you described with the purse it looks like there was actual cash value on the policy. Sounds good but factors into depreciation. ***ask for full replacement cost on your renters policy*** it is not much more expensive for the value it adds. at Geico pretty much every policy comes standard with full replacement cost.

    As far as limitations in my experience the most common are theft of jewelry, watches furs and also firearms. Things like cash tend to have limits too. Most good policies would cover electronics at replacement cost.

    This is just my personal experience and opinion.

    • Avatar Brenda Gill

      My over all experience with State Farm has made me bitter..I’ve been in my apartment for one month and Valentine’s day they broke and stole every thing they could tote out..State farm expects me to have recioets or paper work on things I’ve has for years..I don’t keep them things after a while they aren’t covering most of my items ..if you have a 20,000 policy and say you had 1500.00 in cash that was taken then they only give you 200.00 which is bs..sorry just a bad experience.. Iam now getting an alarm i see no need for insurance

      • MFA Editors MFA Editors

        Hi Brenda,
        Sorry about your loss. We are not defending State Farm, not knowing any of the details, but your situation is just an example of the many reasons why you do have to read every contract you sign, including the insurance policy. The policies typically have special lower limit for cash, jewelry, etc. If you own something especially valuable (an engagement ring, for example) you need to buy a separate policy to insure that item for full value.
        Good luck in negotiating a better settlement from your insurance company.

  3. Avatar Renters Insurance Network

    Hi Alissa, we came across your post on utilizing your renters insurance coverage and are glad you are getting some use out of it! We were curious as to whether you also drive a car and carry an auto insurance policy with State Farm as well? The only reason we ask is that by bundling 2 or more policies with the same insurer often provides an additional savings of 15-20% and while I’m not sure of the exact discount State Farm offers we thought we’d ask.

    • Avatar Deborah Arthur

      I was told by my State Farm insurance agent I would not be given a discount by bundling car and renter’s. I was told the same by Progressive. Very disappointing, Allstate has been the lowest cost renter’s insurance I could find. But with depreciation and the usual $500 deductible, chances are I would not receive much. I have it in case someone was ever injured in my apartment. I would like to know why renter’s insurance does not cover the person living there, as I would be the one most likely to, say, slip in the shower. There are gaps in health insurance and coverage under renter’s would be helpful. When I was a homeowner, it was definitely worth it. I think renter’s insurance can be a rip off, apartment complexes make you get to try to reduce THEIR liability in my opinion. Just keep receipts somewhere separate in case of fire or burglary. I had a fire proof lockbox, obviously during a burglary while on vacation, they took the box! I do not believe it should be allowed to be made mandatory in an apartment, it’s a scam. Again, as a homeowner, it was worth every penny (we also had a pipe burst one year), but I do resent being forced to have it.

      • MFA Editors MFA Editors

        Hi Deborah,
        You usually get insurance to cover a major loss or liability. How much would you lose if your apartment burned down (it happened to one of our bloggers) or was burglarized (happened to another blogger). At about $200 a year premium, we have always felt that the insurance is well worth it for most apartments.