When you think about protecting the items in your apartment, condo or rented home, you might consider getting a great big dog with a great big bark to keep out would-be thieves.
But not all rentals allow dogs, and theft is not the only way you can “lose” your personal possessions.
That big dog can’t help much if the pipes burst and flood your apartment or a power surge scorches your brand-spanking-new laptop. This is where renters insurance can be your new best friend.
Once you start looking at insurance costs, you’ll see many options for cheap renters insurance premiums ranging anywhere from $5 to approximately $25 per month … and of course, the price can go up depending on your needs. But if you don’t need to insure extremely high-end items with extremely high-end replacement costs, you can likely find a policy that suits your budget.
All renters insurance policies have a dollar limit on the amount they’ll pay if you file a claim. These monetary limits can range from a few thousand dollars to well into the six digits, and you’ll pay more on a monthly basis for a higher limit.
For example, a policy that will cover your losses up to $5,000 will definitely cost less than a policy that will pay up to $200,000. So be sure you get enough coverage to protect your replacement costs but be careful not to buy more than you need.
Just like the price of your apartment, the price of renters insurance depends on several factors, including location. If you live in a zip code with high crime rates, the cost of your policy will likely be more than in surrounding zip codes that show less theft. Also, you’ll probably pay more if you’re insuring a rental house versus an apartment in a large building since statistics show that homes are more attractive to thieves than apartments.
Like health insurance, renters policies usually have a deductible, which is the amount you have to pay before the policy kicks in. If you want to pay the lowest monthly premium possible, your policy will likely have a high deductible, meaning you’ll have to pay more from your pocket when, and if, you file a claim.
Depending on where you live, your insurer may factor in your credit score, charging you less if you have a good (higher) credit score and charging you more if your credit score could stand some improvement. Whether or not you have an animal on the property can also impact your monthly premium.
One way to reduce your cost is to use the same company for all of your insurance needs.
Insurers like customers who purchase multiple policies. If you already have car or other coverage, ask your carrier if they offer a discount if you bundle your renters insurance with your other policies. You might just get a better price than if you buy a separate policy from a different insurer.
As your income and life circumstances change over time, your insurance needs will likely change as well. Be sure to adjust your coverage if you move, take on a roommate or acquire more expensive or hard-to-replace possessions. On the other hand, if you downsize or do some major tidying up, be sure to get a revised quote, because the less you have to cover, the less your policy will cost.