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How to Lower Your Insurance Costs as a Renter

by | Oct 24, 2022 | Renters

Lower insurance costs as a renter.

Insurance always tends to feel like an unnecessary expense when money is tight. After all, if nothing goes wrong, then what you paid toward it simply vanishes. However, if tragedy does strike, not having the help of insurance can make the situation cost much, much more. And renters’ insurance is no different.

Lowering Your Insurance Costs (Renter’s Edition)

When catastrophe hits a home that you own, your homeowners’ insurance covers the cost to repair the damages and to replace the things that were lost. But if you are renting a place to live, your landlord’s insurance will not cover your belongings in the case of such an emergency. Their policy will pay to repair the home itself, but not the things within it. That responsibility falls to you.

Therefore, getting a renters insurance policy is the best way to protect the things you own when renting a place to live. While the premiums, which typically fall between $15 and $30 per month, can put added strain on your budget, there are ways that you might be able to reduce that cost. In this article, we’ll lay out some of these methods.

Shop Around

As with any type of insurance, you should not simply take the first company’s quote that you contact. Reach out to get quotes and information from a variety of different providers before making a decision. This will give you a better idea of the price ranges and the various services that will come with those costs.

If you’re looking for reliable, secure, affordable coverage, you should check out The Renter’s Best Friend renter’s insurance program.

You might find a policy to be far cheaper than others, but there is usually a reason for that. Make sure that you understand the differences between the policies – such as what they will cover and what they will not, and what the reimbursement limit is set at. Look for the policy with the most affordable ratio between your premium and the amount of coverage it grants you.

If you have an established relationship with an insurance company, you may want to give extra consideration to sticking with them for your renters’ insurance as well, as we’ll discuss in our next tip.

Bundle Your Coverage

While you should compare quotes, policies, and coverage from several different companies, a good place to start your search is with the insurance provider that you already have. If you already have an insurance policy with them, such as for auto insurance, check to see if they also offer renters’ insurance. Most companies offer the option to bundle your various insurance policies together for a discounted rate.

In some cases, this could save you $100 or more per year.

Raise Your Deductible

In the case of an emergency, you will have to pay a certain amount out of your own pocket before your insurance policy begins its coverage – this is called your deductible. You can voluntarily raise your deductible, thus increasing the amount you will have to cover before your policy kicks in, should you need it. This will lower the cost that you have to pay monthly toward your premiums, but it should be noted that this can be a risky strategy. If an emergency does strike, this could backfire in a way that sees you having to spend more money than you might have otherwise saved.

Lower the Limits of Your Coverage

Another method of lowering the monthly cost of your insurance is to decrease your coverage limits. This is the amount the insurance company will pay out to mitigate the loss of any of your property covered by that policy. If you have an emergency fund in place to help cover the costs that you may need to pay out of pocket, then you might consider carrying less coverage. Just make certain to maintain enough coverage to include the cost of your personal belongings, so that you can avoid having to pay the cost of replacing them yourself.

Use a Different Method of Payment

Many insurance companies allow you to pay a full year’s premium in advance. While this may not technically save you any money, you will not have to make reoccurring monthly payments throughout that year. Some companies may even offer a discount as an incentive for customers to utilize this option. Keep in mind that, should the need arise, you should be able to cancel your policy at any time and receive a refund of the remaining portion of the amount you paid.

Setting up your account to autopay might be another way to get your premium discounted, as some providers offer this in order to guarantee that payments will be made on time.

Security and Safety Equipment

Renters are at a significantly higher risk of theft than those who own the home they live in. While only one-third of the total housing in the U.S. is occupied by renters, it is the latter who are 50% more likely to have a break-in when compared to homeowners.

Some renters’ insurance providers will lower the price of their coverage if your landlord installs equipment such as security systems and smoke detectors. Other equipment that may net you a discount could be fire extinguishers, new door hinges, a sprinkler system, upgraded locks, and window alarms.

Other Possible Discounts

There may already be discounts in place that you could qualify for. Many different groups receive discounts from specific insurers for a variety of reasons. You should check with your provider to see what discounts they might offer. Here are just a few suggestions:

  • Senior citizens
  • Partner insurance company through your employer
  • A parent who carries a policy with the same company
  • Being claim-free
  • Smokers who have recently quit

Switch to Actual Cash Value

Many policies for renters’ insurance promise you replacement costs, which is enough cash to replace any of your belongings as if they were brand new. Because of this, these kinds of policies will cause your premiums to be a bit higher. However, you might consider switching to a policy that instead ensures actual cash value instead.

This type of policy will only pay out against the value of your belongings as they were, with a depreciated value. It might not be enough to buy replacements outright but will help to mitigate the loss and it will lower your monthly payments of insurance premiums.

Consider a Move

One thing that impacts the cost of renters’ insurance is the location in which you live, with the price even being determined by the age of the building and what street or block you live on. If your area has a higher crime rate or older real estate in bad condition, consider moving if you can. These things put your neighborhood at a higher risk and, by proxy, make you a riskier investment to ensure. If you can afford to move, it will actually save you money when it comes to renters’ insurance.

Keep That Credit Score Up

In addition to your normal credit score, you also have an insurance score – which is also called your “credit-based insurance score”. This is a number that is mostly calculated from your credit history and is used to predict how likely you are to file a claim on your insurance as well as the cost of that claim. Insurance companies in most states are able to check this number to determine the price they are willing to offer you for coverage.

Maintaining a healthy credit score can help this number, so make sure to do what you can to keep that number as high as possible. In addition, refrain from making frivolous claims against your insurance whenever you are able.

Split the Cost

If you have roommates or family members who live in the rental property with you, you might consider splitting the monthly cost of the renters’ insurance. Some providers may charge extra but the expense per person will be lower than carrying individual policies. Just be mindful that the other people on your policy may file a claim, which will impact your insurance costs in the future as well.

Bottom Line: Pay for What You Need

Renters’ insurance isn’t required to have. Skipping out on it entirely would save you quite a bit of money, at least in the event that you are lucky enough to escape a catastrophe. But by their very nature, emergencies are difficult to predict and you can never guarantee that you can avoid one.

Floods, fires, burst pipes, burglaries, structural damage, hurricanes, tornados, and other disasters are difficult enough to get through when they strike. The last thing you want to be worrying about is how to replace your stuff. And that is where renters’ insurance can have you covered.

But your peace of mind doesn’t mean that you have to cause yourself financial strain. Consider the tips outlined in this article for shaving down the expense of providing you and your belongings the right level of protection that they need.

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