How to File a Renters Insurance Claim (Process for Payouts on a Loss)

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You knew your building’s plumbing was old, but you thought you’d be out of there before anything terrible happened to it. 

An inch of water (and counting) and several panicked calls to your property manager later, you admit you thought wrong. Now, you’re left with the massive, thankless job of replacing numerous possessions, including your mattress, bookcase, and computer, ruined by the burst water pipe in your bedroom ceiling. 

It’s a good thing you have renters insurance — because you’re about to put your insurance company’s promises to the test. 

How to File a Renters Insurance Claim

Renters insurance covers property losses of the sort caused by a burst pipe in your apartment ceiling — or any other peril mentioned in your renters insurance policy. It’s known as personal property coverage.

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Usually, it also covers medical and liability claims arising from mishaps in your rental unit. For example, it would cover the party guest who slips on your slick kitchen floor and breaks their ankle or the delivery person who tumbles down your rental house’s icy front steps and suffers a concussion.

The claims-filing process is similar for both types of claims, but you’ll notice some differences in the order of operations.

Filing a Claim for Property Loss or Damage

Depending on the circumstances, a renters insurance claim for property loss or damage begins with a police report or a call to the property manager. You must then document the damage — comprehensively.

Don’t throw anything away or clean up until you’ve completed all these steps. If you erase evidence before the insurance company has fully investigated, you could jeopardize your claim. That said, if the property owner needs to make basic repairs to ensure the property remains habitable or not repairing the damage would make it worse, it’s OK to do what’s necessary. 

1. File a Police Report (if Applicable)

If your possessions are damaged in the course of a potential violation of law, call the police and file a report. 

“Potential violation of law” could mean any of the following:

  • Vandalism
  • Burglary
  • Suspicious fire
  • Theft by a guest

More ambiguous incidents, like a fuel explosion inside or outside your building, warrant a police report too. Incidents like a burst pipe or rough weather don’t require a police report.

The police report is vital because it backs up the story you’ll tell the insurance company. It’s an impartial record of the incident — and the extent of the damage — taken by a respected third party.

When dealing with the police, get the name and badge number of every officer and investigator you speak with, even if they don’t visit your apartment in person. Ensure they take copious photos of the damage, and request a copy of the report when it’s done.

2. Contact Your Property Manager

Next, contact the owner or property manager and let them know what happened. If you live in a multiunit building and the incident affected more units than just yours, they might already know, but call them anyway.

The owner or manager probably won’t help you file your renters insurance claim, but they need to know about the incident because they might need to file an insurance claim of their own. Regardless, they’ll want to assess the condition of your unit or the building itself. Be sure to document any lingering hazards, such as:

  • Broken windows
  • Damaged doors or locks
  • Exposed pipes or wiring
  • Suspected gas leaks
  • Nonfunctioning utilities (such as the power being out or the water being off)

If you feel uncomfortable remaining in your unit due to safety concerns or simply can’t stay there, tell the property manager right away. Your renters insurance policy might cover temporary relocation costs, such as staying in a hotel for a week or two while your unit undergoes repairs.

3. Contact the Insurance Company

Your next call goes to your renters insurance company or to your insurance agent if you need their help to file the claim. 

You might be able to file straightforward claims through your insurance company’s website. Look for a File a Claim button or tab on the homepage. But it’s not a bad idea to call the company or your agent directly if you have questions about the process, aren’t sure your policy covers the incident, or want to figure out whether it’s worth it to file a smaller claim. 

4. Document the Damage or Loss

If you filed a police report, the investigators assigned to your case will take photos and make notes of the damage. But you shouldn’t rely on their report to be the sole record of the incident.

So once you’ve made your initial calls, take the time to document what happened meticulously. Take photos and videos of the scene as you found it. Take photos of individual items that sustained damage. Create a list of damaged, destroyed, or stolen goods with the price paid for each and an estimate of the current replacement value. Make copies of receipts or invoices for any expenses incurred due to the incident, including replacements for damaged or stolen possessions and bills for temporary lodging if your apartment is uninhabitable.

If you’ve previously taken a home inventory, include it in your documentation. A home inventory helps back up your claim and could make it easier for the insurance company to reimburse you quickly. Not having one doesn’t mean the insurance company will deny your claim, but it does increase the chances of an insurance adjuster visiting the premises. 

5. Submit the Claim

You’re now ready to submit your claim. Visit your insurance company’s website to download or fill out the required forms and upload photos, videos, notes, and the police report to support your claim. 

If you’re having trouble finding the required forms or submitting your information electronically, contact your insurance company or your insurance agent. Your agent might offer to file the claim on your behalf, though you must be available to answer the insurance company’s questions.

Be sure to file your claim before any deadline imposed by your insurance company. This deadline could come as little as 48 hours after the incident. If more information comes to light or you incur additional expenses after you file, you can update your claim.

6. Prepare for the Investigation & Claims Adjuster Visit

If your claim is fairly small and straightforward, the insurance company might take you at your word and accept your claim without much trouble. In this case, you can start cleaning up your place and move on to the next step — reviewing your settlement offer.

If your claim’s value is higher, the circumstances are murky, or you haven’t provided enough documentation to support your claim, your insurance company could investigate further. Wait to throw out damaged possessions or clean up your space until you hear back.

If your insurer wants to investigate further, expect a call and possibly a visit from a claims adjuster. This person’s job is to verify your story and determine how much compensation you actually deserve for the loss. 

If they visit the property, they’ll take pictures of the damage and make notes for their own report. Be prepared to point out less obvious evidence of damages or losses, and have your home inventory handy to corroborate your claims.

The claims adjuster might also want to talk to others involved in or who have knowledge of the incident. That could include your roommates, houseguests, and the property owner or manager. It could also include the police investigator who wrote up your report.

7. Review the Settlement Offer 

If the insurance company accepts your claim, you’ll receive a settlement offer. 

It’s a formal payout offer for the amount the insurance company is willing to pay to settle your claim after subtracting your policy deductible. It could be about what you thought the damage or loss was worth — less the deductible — or significantly less, depending on how the insurance company values the claim. 

A lot depends on whether the insurance company uses replacement value or actual value when calculating your total personal property claim value. Replacement cost pegs the value of lost or damaged items at what it actually costs to buy new replacements for them. In contrast, actual value (or actual cash value) takes depreciation into account. The difference can be stark: A three-year-old TV with a replacement value of $500 might have an actual cash value of just $100 or $150. 

If your policy has a maximum coverage amount for certain types of personal belongings claims and your place sustained a lot of damage or became uninhabitable for months, you could find your total payout capped at an amount much lower than what you deserve. 

In either case, it’s your responsibility to review the settlement offer and determine whether it’s acceptable to you. If you’re not sure, ask your insurance agent. 

Filing a Claim for Personal Liability and Medical Payments

Renters insurance covers more than your personal possessions. It also protects you from costly liability issues arising from mishaps in your rented home. Without it, you could be on the hook for houseguests’ medical bills, among other injury-related expenses.

Filing a personal liability or medical expenses claim with your rental insurance company is a bit different from filing a property damage claim. To get it done, follow these steps in order.

1. Document the Damage

First, take copious photos and videos of the scene of the incident as soon as you can. For example, if a guest at a party you hosted fell through a railing on your second-floor unit’s balcony, you’d want to take photos of the damaged railing and the area where they hit the ground. 

Next, create a record of the incident as you remember it. If no video record exists, a written record will have to suffice. Describe where you were when it occurred, how you became aware of it, and the sequence of events that followed. 

2. Give Your Insurance Information to the Injured Person

You won’t be filing this claim yourself — the injured person will. To do that, they need your insurance information: company name, your name, and policy number.

It’s their responsibility to reach out to you about this, either directly or through a lawyer. However, you should do everything in your power to help them file the claim, including giving them your insurance agent’s contact information or helping them navigate your insurance company’s online claims forms. 

3. The Injured Person Submits the Claim

When they’re ready to file, the injured person submits their claim to your insurance company. They’ll provide hospital bills, physical therapy bills, receipts for medical equipment like crutches or wheelchairs — any costs arising from their injury. 

Don’t worry about submitting your photos, videos, and notes on the incident at this time. But do hold onto them until the injured party settles the claim, as your insurance company may want to review them.

4. Prepare for the Investigation & Claims Adjuster Visit

Be available to answer any questions from your insurance company during the investigation, and don’t be surprised if they send a claims adjuster to assess the scene of the incident. If you haven’t already done so, the claims adjuster visit is a good time to share your own documentation.

5. The Injured Person Reviews the Settlement Offer 

After completing its investigation, the insurance company sends the injured person a settlement offer for review. If they accept, the insurance company reimburses them and closes the claim. 

For medical-only claims, your insurance company typically covers the portion of the injured person’s medical bills not covered by their own health insurance. 

For personal liability claims, where the injured person sues you for damages, your insurance company covers the amount of the judgment and the injured person’s legal fees if you lose. If you win, your policy might cover your legal fees, but you won’t owe anything to the injured person.

Remember that reimbursement kicks in only after you hit your policy deductible. If the claim is worth $10,000 and your liability deductible is $1,000, the insurer covers $9,000 and you pay $1,000 out of pocket.

Likewise, every renters insurance policy has a personal liability and medical expense coverage limit. If the victim’s injuries are severe, you could blow through this limit. Umbrella insurance provides an additional layer of liability protection — typically starting at $1 million — in such cases.

Renters Insurance Claim FAQs

Filing a renters insurance claim can be confusing and stressful. These are some of the most common questions that come up during the process.

How Long Does the Renters Insurance Claims Process Take?

It depends on the type of claim, the claim value, and what caused the damage or injury.

The insurance company can usually resolve simple, lower-value renters insurance claims within a business day. You file the claim online and upload supporting documentation, and the insurance company gets back to you with a settlement offer within hours.

More complicated claims can take days or weeks to resolve. You might need to provide more documentation, including receipts for expenses incurred days or weeks after the event. If the claim involves significant damage to your unit, you’ll likely need to wait for a claims adjuster to visit and write a report about what happened too.

Does Renters Insurance Cover Temporary Living Expenses?

Some renters insurance policies do cover additional living expenses if you’re forced to move out of your unit temporarily. Usually, the policy caps this coverage at a specific amount of money or number of days.

Check your policy for details about this type of coverage. If you don’t have it and think you need it, ask your insurance company or insurance agent to price it out for you. Temporary living expense coverage will increase your premium, but you’ll be glad you have it if you have to move out of a damaged apartment.

Will Filing a Renters Claim Affect My Insurance Rate?

Probably. How much is a more interesting question. 

Generally, liability, fire, and theft claims increase premiums more than medical claims. Don’t be surprised if your premium jumps by 20% or more after a fire or theft claim. Medical bill-only claims should still increase your premium, but by a more reasonable rate — typically under 20%, depending on your insurer. 

What Happens if the Insurance Company Denies My Claim?

It depends on why the insurance company denied your claim. 

Sometimes, there’s not much you can do about a denied claim. If your policy specifically excludes the type of incident or expense, your insurer has every right to deny the claim. Even if your policy covers the claim type under normal circumstances, a smaller claim might fail to hit your deductible.

That said, if your claim is truly legitimate and the insurance company denies it anyway, whether due to suspected fraud or a differing interpretation of your policy’s terms, you can appeal. It’s a time-consuming process that requires you to submit additional documentation, but it’ll pay off if the insurer reverses its decision.

If the company denies your appeal, you can hire an insurance attorney to press your case. They’re well-versed in insurance legalese and can craft arguments you wouldn’t even know to make. In the worst case, they can take your insurer to court.

Final Word

Filing a renters insurance claim could be easier than you think. The best renters insurance companies generally have online or app-based claims processes that let you submit and get approval for uncomplicated claims without ever meeting face-to-face with a claims adjuster.

Even if you have to welcome a claims adjuster into your apartment, it’s not the end of the world. If you’ve filed a police report, documented the damage or injuries, and kept good records of your expenses, your chances of getting a legitimate claim approved are quite good.

Sure, the process takes some time. But that’s a reasonable price to pay for avoiding a big hit to your bottom line.

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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.


College Budget Template & Free Tools [Step-by-Step Tutorial]

Save more, spend smarter, and make your money go further

Looking for a budgeting template to help you plan college expenses? 

You’re in the right spot!

In this post, we’ll walk you through how to build a college budget using the budgeting template below to help you take control of your finances. 

College Budget Template (.XLSX)

If you’re a fan of automation. You can also set up the exact same student budget and automatically track your finances over time using the Mint app. 

Automatically track your spending over time with the Mint mobile app, or use our college student budget template to input your income and expenses each month. Either way, using a budget can help you start working toward your financial goals.

We’ll cover two ways to go about making your college budget:

Sign up for Mint for free to automate your college budget.

With the Mint app, you enter your budget info once and it does the rest!

Budgeting Using the College Budget Template

The college expenses worksheet is an Excel spreadsheet you can download for free. The template uses the same categories as the Mint app, but you’ll have to manually input your income and expenses.

With a college student budget worksheet, you can add your income and expenses to get a better look at your financial situation. To get started, download the college planning spreadsheet below. Here are the steps you’ll follow to complete the budget template:

Step 1:

First, select the “Income Inputs” tab at the bottom-left of the page. You’ll see a table that lists the different types of income you may receive. Fill out the “ESTIMATED” and “ACTUAL” columns, which will then automatically populate the “DIFFERENCE” column.

If one of the income sources doesn’t apply to you, leave the value as “-” as a stand-in for $0.

Step 2:

Next, you’ll need to click the “Expense Inputs” tab, which should be just to the right of the “Income Inputs” tab that you’re already on.

Step 3:

Once you’re on the “Expense Inputs” page, fill out the “ESTIMATED” and “ACTUAL” columns just like you did before. You’ll see that each type of expense is broken down into greater detail in each respective table.

If one of the expenses doesn’t apply to you, leave the value as “-” as a stand-in for $0.

Step 4:

Now that you’ve added your income and expenses, click on the “Budget Summary” tab where you’ll be able to see a breakdown of your budget.

Step 5:

The “Budget Summary” tab is automatically populated with this information once you complete the “Income Inputs” and “Expense Inputs” tabs. In addition to the budget breakdown, you’ll be able to see a comparison of your total income and expenses as well as an expense breakdown spending category.

The “Budget Summary” can be used to help you make decisions about your finances.

College Budget Template (.XLSX)

Budgeting Using the Mint Mobile App

As we mentioned, the Mint app is an easy way to automate your budget to save you time each month. Using the mobile app also lets you get actionable insights that can help you make more informed financial decisions. 

Follow the steps below to create a budget in the Mint app. You can also watch this short video:

Note: This video has been created with a fake demo account.

If you don’t have Mint yet, you’ll need to download the app to sign up.

Step 1: Create Your Budget

To create a budget, click “Monthly”. If it’s your first time setting up a budget in Mint, a message that says “Create a budget” will pop up. Click the button to get started.

Step 2: Add Your Income

To add your income, click “Tell us your monthly income”. This will take you to the next page, where you’ll input your monthly income. Sources of income might include earnings from your part time job or even financial aid distributions.

Note that if you already have bank accounts connected to your Mint account, this information will auto-populate.

Once all of your income sources have been added, click “Done–now add expenses”.

Step 3: Add Your Expenses

To get started, click “Add an expense”. On this page, you will see a list of recommended categories you can choose from, or you can search a specific expense category within the app using the bar at the top of the page. Once you input the amount for the expense, click “Add to budget”. You’ll repeat this process for each expense.

You’ll see there are a wide variety of categories to choose from, but If you want to mimic the Excel template within the Mint app, you can use the specific categories outlined below.

Grouping Category
Auto & Transport Auto Insurance
Auto & Transport Auto Payment
Auto & Transport Gas & Fuel
Auto & Transport Parking
Auto & Transport Public Transportation
Auto & Transport Ride Share
Auto & Transport Service & Parts
Bills & Utilities  Home Phone
Bills & Utilities  Internet
Bills & Utilities  Mobile Phone
Bills & Utilities  Television
Bills & Utilities  Utilities
Education Books & Supplies
Education Student Loan
Education Tuition
Personal Care Dentist
Personal Care Doctor
Personal Care Gym
Personal Care Health Insurance
Food & Dining Groceries
Food & Dining Alcohol & Bars
Food & Dining Coffee Shops
Food & Dining Fast Food
Food & Dining Food Delivery
Home Home Supplies
Home Mortgage & Rent
Entertainment Amusement
Entertainment Movies & DVDs

Watch this short video for a demonstration of adding and editing categories: 

[embedded content]

Step 4:  Return to the Dashboard

To return to the budget dashboard, click “View your budgets”. This will bring you to the page where you can see an overview of your budget.

Step 5: Confirm That Everything is Correct

You’ll want to double-check all of the values and categories you’ve added to your budget. Mistakes on your budget can impact your financial stability, so this step is especially important.

To ensure everything is correct, you can verify the values you’ve input into Mint against your bills for each expense. For income, you can double-check your pay stub and other documentation. All values should match.

If anything is categorized incorrectly, you can update them as needed. Note that Mint will categorize anything it doesn’t know how to allocate as “Everything Else”. You may need to add custom categories to accommodate those expenses.

Managing your college budget is easy with Mint.

You can automate your monthly budget for free with Mint after one easy set up.

College Budgeting Tips & FAQs

Why Should College Students Budget?

Budgeting is an important part of making sure you have enough money to get by and maybe even have enough to start saving for the future. While you might be a student right now, the choices you make impact your financial future, so using a budget can help you start forming good financial habits.

You might use your budget to start investing, paying off debt, or prioritize other financial goals. Whether you use the college budget template or the Mint app, learning to budget is a useful skill that can serve you well for the rest of your life.

What Are Some Basic Expenses College Students Should Budget for?

Some of the expenses college students may want to budget for include:

  • Rent
  • Food 
  • School supplies
  • Utilities
  • Transportation

Using a college budget template can help you figure out what you’re spending and where you can cut back as needed.

Do College Students Need an Emergency Fund?

Sticking to a budget can help ensure you can afford everything you need, but if you can afford to, you may want to consider starting an emergency fund. 

A college student emergency fund can help you deal with unexpected expenses and other financial problems you may run into–like an unexpected increase in rent, car repairs, or laptop replacement–which is why the U.S. Department of Education’s Office of Federal Student Aid recommends it.

How Do You Determine Your College Budget?

To figure out your college budget, you’ll need to look at your monthly income versus your monthly expenses. Reducing spending in certain areas gives you more money to work with, so you can cut back in some areas if you don’t have enough of your budget allocated for food or bills. While spreadsheets work, the Mint app automates your  monthly budget, making it a simple, time-saving solution for college budgeting.

Get Mint to start budgeting.

What Are Some Key College Budgeting Tips?

  • Prepare for anything: You never know when you’re going to need a significant amount of cash to pay for a new textbook or medical bills. Even though you might not have a lot of money to spare, you may want to try to create an emergency fund so you’re prepared for anything.
  • Set long-term goals: Build your budget with the future in mind. Set long-term financial goals and find ways to achieve those goals through budgeting. Your goal might be to pay off your credit cards now so you can focus on student loans after graduation or to start an investment account so you can start your retirement fund early.
  • Get creative with spending: As a college student, you can save a lot of money by using coupons and splitting costs with roommates, like by sharing your subscriptions.

Save more, spend smarter, and make your money go further


Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint


What Is a Health Reimbursement Arrangement (HRA) and How Is It Used?

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Whether you work for a large employer or a small business, health reimbursement arrangements (HRAs) provide a tax-free way to cover medical costs. 

An HRA essentially gives you a stipend to reimburse you for health care costs like insurance premiums, copays, prescriptions, and over-the-counter drugs, relieving some financial pressure, making them one of the most critical benefits employees seek.

This guide details everything you need to know about health reimbursement arrangements, including how HRA plans work, how they’re different from health savings accounts and flexible spending accounts, and what you can do with the funds. 

What Is a Health Reimbursement Arrangement (HRA)?

Health reimbursement arrangements, sometimes called health reimbursement accounts, are employer-funded accounts that help employees and their covered dependents pay for out-of-pocket health care expenses. HRAs work in tandem with your employer-sponsored health insurance plan to reimburse things like your copays, deductibles, or prescription medication.

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An HRA plan is a valuable tool to pay for medical costs not covered by your health plan. It reimburses you with tax-free money provided by the employer as an employee benefit.

How an HRA Works

Imagine you have a sick child who needs prescription medication. The copay for the brand-name drug (with no generic available) gives you sticker shock. Suddenly, high out-of-pocket bills overwhelm your monthly budget, forcing you to make some financial adjustments.

Fortunately, you submit a reimbursement request on your HRA and receive a check for the amount you spent at the pharmacy.

Employers set up HRA programs to provide extra funds for qualified medical costs you, your spouse, or your dependents incur. Employers are the sole source of HRA funds; employees cannot contribute to their HRA.

Every year, the participating employer determines how much they will contribute to your HRA. The IRS requires that every employee have access to the same amount of HRA funds. Fortunately, unused account balances roll over to the following year.

Types of HRAs

There are three types of health reimbursement arrangements. Which type you have access to depends on your employer’s circumstances. 

Qualified Small Employer HRA (QSEHRA)

Small businesses employing fewer than 50 full-time workers can set up a qualified small-employer health reimbursement arrangement, also known as a small-business HRA. 

These businesses are exempt from providing employer-sponsored health insurance. So employees must get their insurance through the national or a state marketplace if their employer doesn’t offer one.

Funds in your small-business HRA can subsidize health insurance premiums or refund medical expenses you pay out of pocket.

The IRS limits how much your employer can contribute to a small-business HRA. The amount changes with every tax year. For example, in 2022, the IRS capped employers’ contributions to $5,450 for self-only employees and $11,050 for employees with a family.

Individual Coverage HRA (ICHRA)

Some employers don’t offer employee health insurance but are willing to provide a stipend to cover the premiums. The individual coverage HRA helps employees pay for health insurance if their employer has no employee health care plan.

Since January 2020, individual coverage HRAs have created a new way for small employers to distribute tax-free money for health insurance. As a result, you can use your HRA funds to buy health insurance coverage through the or state marketplace or directly from a private insurer. Previously, rules prohibited employees from using HRA funds to pay for individual health insurance premiums. 

If you’re 65 or older, you can use the individual HRA balance to cover Medicare Part A, Part B, and Part C (Medicare Advantage) premiums. If you are still working and on Medicare, your employer may require Medicare coverage verification each time you request reimbursement from the individual coverage HRA.

Group Coverage HRA (GCHRA)

High-deductible health plans (HDHPs) offer more significant savings to employers since the premiums are typically lower than traditional group health insurance plans. However, employees must pay medical bills in full until they meet the deductible, which is several thousand dollars.

So some employers offer a group coverage HRA in conjunction with HDHPs. Since HDHPs can have higher out-of-pocket expenses, the group coverage HRA helps close the gap between the high deductible and the employee’s medical needs.

HRA vs. HSA vs. FSA

In addition to HRAs, there are two other programs that complement health insurance plans: health savings accounts (HSAs) and flexible spending accounts (FSAs). Typically, they all work on a reimbursement basis, but some employers offer debit cards for direct access to funds.

HSAs are unique because the account goes with you after leaving an employer but can only work with HDHPs. Although it requires cash contributions, you control the money and can invest the HSA balance in stocks, bonds, and mutual funds.

FSAs are similar to HRAs. However, they’re known for use-it-or-lose-it rules (they don’t roll over each year), and employees can contribute through salary reduction.

HRAs, HSAs, and FSAs have some important differences that could affect which one’s right for you. Those include:

  • Who funds it
  • How much money can be added annually (individuals; families)
  • Whether the employee pays taxes
  • What type of health plans it works with
  • Whether you can use it to pay health insurance premiums
  • Whether unused funds roll over each year
  • What happens to the funds when you leave the employer (portability)

Comparing the differences between HRAs, HSAs, and FSAs, you can see that there are pros and cons to each. So if you have access to more than one and can only fund one, consider the benefits and drawbacks carefully before deciding.

Funding Source Employer Employer or worker Employer or worker
Annual Cap (2022) Unlimited on most $3,650; $7,300 $2,850
Employee Taxes  No No  No
Plan Type Any  HDHP Any
Premium Coverage Yes No Not usually
Rollover Yes Yes Sometimes
Portable No Yes No

Advantages & Disadvantages of HRAs

An HRA is a powerful tool to manage health care costs. Essentially, HRAs are free money for employees with great flexibility in how you choose to spend it. Plus, employers also win because they can deduct 100% of requested reimbursements from their taxes. 

But there are advantages and disadvantages you should consider carefully.


HRAs have plenty of advantages for employers, such as their tax-deductible status. But HRAs have robust benefits for employees too.

  1. Contributions Are Not Taxable as Employee Income. Employees don’t pay income taxes on the amount their employer provides in an HRA, lowering their taxable income.
  2. Withdrawals Are Tax-Free. Employees pay no income taxes when making withdrawals for qualified medical expenses. 
  3. The Balance Rolls Over Annually. Your HRA balance doesn’t expire, allowing you to use the rest in later years. So if your health was good last year, but you experience a new illness this year, your HRA surplus helps pay for unexpected doctor’s appointments, treatments, or hospitalization. 
  4. You Can Use HRA Money for Many Things. HRAs have the most comprehensive list of qualified medical expenses. That includes (but isn’t limited to) medical bills and dental and vision expenses.


Although HRAs are a boon to employee health care protection, they have limitations too.

  1. You Must Have Health Insurance to Use the HRA. If you opt out of buying health insurance coverage, you’re not eligible to use an HRA.
  2. Your Plan Determines Qualified Medical Expenses. Your company’s HRA plan may cover things that other companies’ plans don’t. Check with your HRA administrator for a list.
  3. You Lose HRA Funds if You Leave the Employer. If you separate from the employer, you lose all funds in your HRA account. So if you’re planning a change, exhaust your HRA funds before departing.
  4. Your Employer Determines the Contribution Amount. Some employers opt for lower-cost group plans that force the employee to shoulder more financial responsibility. If the HRA contribution amount is low, the health care program may not offer the employee much protection.
  5. Employees Cannot Contribute to their HRA. Unfortunately, you cannot contribute part of your paycheck to your own HRA. Only HSAs and FSAs permit employee funding.

Health Reimbursement Arrangement FAQs

HRAs are great supplements to health insurance, but you probably have more questions. These answers will clear things up.

What Health Care Expenses Do HRAs Cover?

HRAs cover various costs not usually covered by health insurance, like:

  • Routine doctor’s visits and copays
  • Medical bills, including hospital stays
  • Deductibles and coinsurance amounts
  • Hospital copays and expenses
  • Prescription medication
  • Over-the-counter medicine
  • Vision care (exams, glasses, contacts, and corrective surgery)
  • Diabetic supplies (testing kits and blood glucose monitors)

These are just a few of the circumstances HRAs can cover. Some plans also include:

  • Monthly premium payments toward health, vision, and long-term care insurance
  • Acupuncture and chiropractic treatments
  • Dental treatments and orthodontics (not premiums)
  • Speech therapy
  • Mental health care, such as talk therapy and alcoholic and drug addiction treatment
  • Weight loss programs
  • Service animal acquisition, care, and training

Since covered items vary among companies, check with your employer for more details about qualified medical expenses.

What Health Care Expenses Do HRAs Not Cover?

Essentially, HRAs only cover expenses directly related to treating a medical condition. 

For example, HRAs will not reimburse you for gym memberships, child care, cosmetic procedures, marriage counseling, feminine hygiene products, and funeral expenses.

What Happens to Unused HRA Funds at the End of the Year?

Fortunately, HRAs roll over funds from one year to the next if you don’t use them. So healthy people can save HRA funds for a catastrophic health emergency.

However, if you change companies, your HRA balance returns to your employer.

Can I Get an HRA if I Don’t Have Health Insurance?

No, you must have health insurance to get an HRA. Either enroll in the employer’s group health insurance plan or a marketplace policy to be eligible for HRA benefits.

Can I Cash Out an HRA?

No, you must use all HRA funds for qualified medical expenses. You can only access the HRA funds by submitting a reimbursement request to your HRA plan. If you leave your employer, they retain your HRA balance.

What Happens to an HRA When I Leave a Job?

Because your employer paid for 100% of your HRA contributions, the money stays with them if you leave your job. Find a way to use up the HRA balance if you plan to change employers.

Final Word

A health reimbursement arrangement is basically free money your employer gives you to spend on medical fees. The HRA funds are tax-free for you and tax-deductible for them. 

HSAs are straightforward to use with your health insurance plan. For example, suppose you visit the doctor, then receive a $100 invoice two weeks later. You would pay the bill, submit your payment to your HRA program, and they would reimburse you for $100. 

Another critical point is that the detailed list of covered expenses depends on your employer. Still, HRAs have the most generous reimbursement list of the three types of health accounts. 

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Alyce Meserve writes about personal finance, retirement, insurance, travel, making money, credit cards, and more. When she’s not sharing personal finance strategies, you can find her on a cruise or writing about one, hanging out with her American Eskimo Dog, Casper, taking a road trip, and playing video games. Reach her on Instagram @alyce.meserve.


Where to Find Low-Cost and Free Mental Health Services

When you have poor or no health insurance, you might prioritize other issues over mental health care. A single session with a therapist could cost $100 to $300 or more, which can be a major burden — or just an impossible cost — for a lot of people.

This could mean ignoring undiagnosed issues or skipping treatment you know you need. Even if you don’t suffer from mental health issues, you might neglect your need for support through a major life event when you see the cost of therapy.

As with any physical ailment, not seeking mental health care could be detrimental to your health in the long term, so we want to help you find the care you need with whatever resources you have.

12 Ways to Find Free or Low-Cost Mental Health Services

Instead of forgoing care or winding up in debt over medical bills, try these options to find affordable or free counseling and other mental health care services.

1. Find a Training Clinic

Like other areas of health and medicine, students need to practice working with the public before they become clinical or counseling psychologists.

That’s good news for any of us who want to save money on therapy.

Training clinics are usually located near or as part of universities. You’ll attend sessions with a graduate student supervised by a licensed psychologist. These clinics typically charge on a sliding scale (which could be as low as $0, if that’s where your scale slides…)

To find one near you, you can browse the Association of Psychology Training Clinics for member clinics. Or just search “[your city] psychology training clinic.”

2. Visit a Community Mental Health Center

Community mental health centers may offer access to support groups, individual counseling or resources to learn more about your mental health concerns.

Find a center through the Department of Human Services at your state’s government website.

You can also find services through private nonprofit organizations. YMCA offers low-cost and sliding scale behavior health and family services for kids and adults. Look for counseling and mental health services through your local Y.

3. Attend a Support Group

While you miss out on the personalized care and complete anonymity of private sessions, support groups can be the perfect solution for free or low-cost therapy.

Organizations like the Depression and Bipolar Support Alliance (DBSA), the Anxiety and Depression Association of America (ADAA), Alcoholics Anonymous (AA) and Narcotics Anonymous (NA) host free community support groups in person or online.

If you want to work with a particular therapist but can’t afford private sessions — because you lost insurance coverage, for example — ask if they offer group sessions. These should come at a lower rate you could potentially afford out of pocket.

4. Negotiate and Ask for Discounts

You might not realize it, but your medical bills are totally negotiable. By a lot.

Don’t be afraid to lowball here — this isn’t a business deal, so you don’t have to worry about making a bad impression.

When you receive a bill for services, contact the provider to simply let them know you can’t afford it. They may be willing to cut the cost by more than half if you can pay a chunk upfront.

If you don’t have the cash handy, ask for a payment plan. Get on it before the bill goes to collections, and ask for a monthly payment you can handle.

This illustration shows someone seeing a therapist online.
Getty Images

5. See a Therapist Online

Telehealth (or telemedicine) is convenient for a lot of people and could save you a ton of money on health care.

Through an app like Teladoc, you can meet with a health care professional for physical or mental health issues for a fraction of the cost — and time — of a trip to the clinic. Telemedicine doctors can diagnose, recommend treatment and even prescribe medication if necessary.

Or opt for a subscription to a therapy app like Talkspace or BetterHelp. You get access to a licensed therapist via audio or text messaging, or live video chat for around $60 to $150 per week, paid monthly.

6. Lean on Your Spiritual Community and Leaders

If you’re involved with an organized religious group, you could find the help you need within that community.

Does your organization host free support groups or retreats where you can connect with others in your situation? Maybe your minister or other leaders in the community offer free individual or couples counseling.

If you’re worried about opening up about your struggles within a small community, remember: Everyone coming to group therapy is looking for help, just like you are.

7. Use Services at Your School or College

College or university students and faculty often have access to health care services through their schools. Your tuition and fees subsidize them, so you might as well take advantage!

Children enrolled in a K-12 school may have access to sessions with a school counselor, as well. Lean on these options when your family can’t afford private mental health services.

8. Consult the Internet

Going online to self-diagnose your ailments is no replacement for professional diagnosis and treatment.

But if you already know what you’re dealing with, consulting a relevant association’s website could help when you have questions and lack access to a doctor.

For example, if you suffer from anxiety, you can find reliable resources at these websites:

Some people also find online forums like Reddit (content warning: suicide) or Facebook groups useful for connecting with other people who understand your situation.

Just be careful to take suggestions from random individuals with a grain of salt, and never rely on them for a diagnosis or medical advice

9. Call NAMI

If you prefer to speak with someone directly, you can call the NAMI Helpline (National Alliance on Mental Illness) to get answers about symptoms, treatments and resources. The Helpline itself doesn’t offer counseling, but it can help you connect with programs in your area.

10. Check Your Employee Benefits

Some companies and government agencies offer something called an employee assistance program (EAP), which could cover some free counseling sessions, among other benefits.

Check with an HR representative to learn whether your organization offers this kind of benefit and ask how you can take advantage of it.

In some cases, the available counselor is someone working as a consultant with your company and may consult with company leadership as well as counseling employees. They’re likely bound by certain confidentiality requirements, but if you have any concern about your privacy in the workplace, state those requirements in advance.

11. Stop by an LGBTQ Center

If you’re seeking safe and affirming support as an LGBTQ person, look for local LGBTQ centers and support or advocacy organizations. They might offer support groups, access to counseling or resources for LGBTQ-friendly care.

You can search “LGBTQ center in [your city or town],” or browse these resources:

  • The U.S. Department of Health and Human Services shares a list of LGBTQ support and advocacy groups.
  • The Trevor Project, focused on LGBTQ youth support, offers a crisis line you can call, text or chat online with. It also offers text, chat and phone counseling.
  • Find a PFLAG chapter near you for support for LGBTQ people, friends and families.

12. Join a Therapy Collective

Open Path is a nonprofit psychotherapy collective that offers low-cost counseling for people with financial need.

You can join the collective for a one-time fee of $59, then receive care for between $30 and $60 per session (up to $80 for couple and family sessions).

The collective lets you search for therapists in your area or speak with someone online, so you should be able to find the help you need no matter where you live.

OpenPath doesn’t require income verification for membership, but it asks that you only use the service if you’re uninsured, underinsured, have a household income less than $100,000 a year or otherwise can’t cover market rates for therapy.