State Farm Renters Insurance Review: Does It Pay to Bundle?

Finally! A television ad campaign from State Farm that actually talks about one of their insurance products, as opposed to simply showing LeBron James dancing around in a parking structure.

But wait, it gets better. The new insurance-centric ad focuses on one specific product, State Farm’s renters insurance program. Yep, they offer more than just auto insurance policies folks, they offer a way to protect your personal property. By having renters insurance, you ensure that the replacement cost of anything you own is covered via your policy. And State Farm wants you to know all about the fact that they have more coverage options available.

In fact, they specifically tout the ability to get you a standard renter’s policy for as little as $4 per month if you bundle auto insurance with them as well. Not a bad price considering what premiums usually go for!

Insurance for only $4 per month!? While it may sound too good to be true, it is very possible because renters insurance doesn’t tend to cost all that much regardless of where you purchase it.

So, is this $4 per month renters insurance from State Farm a good deal or not? Or should you go spend those four dollars on items at a dollar store instead?

What option does a renter have through State Farm?

When insurers advertise a low rate flat for something, you have to dig down into the details to see exactly what is being offered. While $4 per month sounds really cheap for property coverage, especially for a State Farm policy, it’s not all that surprising because renters insurance tends to be low cost.

Let’s face it. We’re all out for the best deal we can get when it comes to our insurance expenses. And best typically means cheapest.

However, it’s more important to ensure the coverage is adequate, otherwise what’s the point? Not only do you need enough coverage to replace or repair your personal property, you also need to be covered against the right perils (this is equally important).

What do we mean? Well, you could have $50,000 worth of coverage for your personal property, but if you suffer property damage dealt by a sewer or drain back-up and you don’t specifically have coverage against that type of loss, you’re simply out of luck. Claim denied! A simple phone call could have told you what your coverage limits were before the incident occurred.

So be sure to verify with your State Farm insurance agent exactly what is, and more importantly, isn’t covered by their renter’s insurance policy with regards to your property. After all, $4 per month is pretty darn cheap as far as most premiums are concerned!

If it’s a named perils policy rather than an all perils policy, you should probably move on. Again, if things like water back-up aren’t covered, you may want to opt for a different insurer who offers more comprehensive coverage, even if it is a little more expensive.

There are plenty of renters insurance companies out there, and you may be the sort of person who wants all their bases covered. You can always request a renters insurance quote at any time, but include specifically what you’re looking to have covered and from what sort of life events.

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What renters insurance policies are offered through State Farm?

• Typical renters policy comes with $100k in liability coverage
• Deductibles are generally offered at $500 and $1,000
• Discounts offered for things like smoke detectors and/or fire extinguishers
• Cost can vary greatly based on location, deductible, and any add-on coverage you choose

Your personal financial strength is taken into consideration when you apply for various types of coverage. The more you own, the more you have to protect. State Farm says the typical renters insurance policy offers $100,000 in liability coverage, but points out that you should consider more coverage if your assets exceed that amount.

When it comes to deductibles, State Farm tends to offer a choice of either $500 or $1,000, meaning your losses need to exceed those amounts before they pay you a dime in claims.

The price you pay for coverage will be determined by things such as location, condition of the building, and so on. Put simply, it’ll be cheaper to get coverage in a low-crime area, or near a fire station, versus the opposite. Financial stability is easier to maintain in those areas, so no additional cost is necessary on the business end to recover the possibility of a higher amount of claims.

And you might be able to qualify for discounts if you have smoke detectors and/or fire extinguishers in the unit, which could significantly reduce your costs. So be sure to mention those when obtaining any sort of in person or online quote.

The cost of your monthly premiums, or your annual premium should you choose to pay once a year instead of once a month, with State Farm will vary based on your wide range of needs, the coverage you select, the deductible you choose, and whether you tack on optional coverage like earthquake or business liability.

Should I bundle auto and renters insurance with State Farm?

What we always say around here is that you shouldn’t buy one type of coverage just to save on another. If the auto policy through State Farm is way more expensive than alternative coverage through someone else, you may not want to purchase it just to get your hands on cheap renters insurance, because at that point the bundle discount won’t make sense.

So whether you should bundle additional coverages together or not is an excellent question to be asking. You should only consider getting added protection if it makes sense financially. A $4 monthly renter’s insurance policy may not be worth your time if you have to purchase a more expensive auto insurance in order to qualify for it.

In other words, if you’re overpaying $100 per month for State Farm’s auto insurance coverage simply to get cheap renters insurance, you may want to go back to the drawing board to find premiums that aren’t so pricey. You can get a separate policy from a company other than State Farm, though that’s generally advised against, since having two different companies insuring you may end up coming with an extra cost. Just triple check that you know what your policy options are, and whether or not they make financial sense.

We should point out that you might also qualify for multi-policy discounts if you bundle other types of insurance with State Farm, such as life insurance or a business policy. So if a different pair of policies make sense financially, there you go.

Do the math and shop around to find the best of both worlds. Doing so can net you an average cost across the entire cosmos of companies that are out there. You may have to pay $10 or $20 a month for quality renters insurance, but if your car insurance is $50 or $100 less a month with a different insurance company, you still win.

Just be sure to do your homework! And consider using an independent insurance agent, one who has access to all lines of insurance, including auto, home, renters, and so forth, with multiple carriers all at once to find you the most comprehensive coverage at the most affordable price. You don’t want to end paying additional living expenses for a policy that may not be best suited to your lifestyle.

Tip: Depending on who you rent from, renters insurance may be required as part of your lease agreement (Is renters insurance required?). If that’s the case, you may not need all the extra coverage, and a bare-bones, basic policy might make sense just to meet their demands.

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