Factors Affecting the Cost of Renters Insurance

People who rent homes, apartments and condos often encounter the same dangers as homeowners. Whether it’s fire, smoke, vandalism, or a weather-related incident, all renters need to protect their personal property. Renters insurance protects belongings if they sustain damage in a covered incident. This coverage may help protect you from on-premises theft and hazards, including items stolen from your car or lost or damaged wherever you are.
paper family under renters insurance umbrella

paper family under renters insurance umbrella

Renters can usually choose from two personal property coverage options: replacement cost value or actual cash value. If you insure your personal property at its replacement cost value, you can replace items purchased formerly at today’s prices. If you opt for the actual cash value, you get the replacement cash value minus depreciation at the time of your loss.

Renters insurance may also protect you if you’re responsible for an injury or property damage to others. For example, if a guest slips and sprains an ankle at your birthday party, your insurance may give you financial protection. Liability may also cover your legal defense costs and judgments if there’s a lawsuit, regardless of whether the incident occurred within your rented residence or somewhere else.

Five Factors Influencing Policy Cost
Numerous factors affect the price of a renters insurance policy, but five can influence your policy price the most. These include:

Amount of coverage—You likely want to insure all your property because you could lose everything in an event such as an apartment fire. You may need supplemental coverage for items not included under your general renters insurance if you have valuable items. This additional coverage may increase your policy premium.
Where you live—Unfortunately, the cost of your insurance is affected by something over which you have no control: where you live. Some areas are prone to natural disasters like flooding and earthquakes, which aren’t generally covered by renters insurance. It would be best to have a rider or separate policy to cover these events in addition to your standard renters insurance. This addition also increases your policy costs.
Your deductible—This is the amount you pay for a loss before your insurance coverage begins. The higher your deductible is, the lower your insurance premium. And although this may keep your costs down, you want to ensure you can still pay the deductible if you experience a covered loss.
Actual cash value versus replacement cost—This factor influences your premium. When it says actual cash value on your policy, it’ll pay the item’s value at the time of loss, minus depreciation. Replacement cost coverage lets you replace your lost or damaged possessions with similar items at current market value. This coverage option generally costs more in your premium.
Discounts—Insurance companies often offer discounts for having smoke and fire detectors, sprinkler systems, fire extinguishers, burglar alarms and outer deadbolts. Your insurer can let you know if you qualify for any discounts that could help lower your policy cost.

If you’re unsure whether renters insurance is worth it, consider if you can afford not to have it. Although your landlord insures the physical structure you live in, your possessions are your responsibility. If something devastating happens, insurance could help you replace items lost or damaged.

Some landlords may require renters insurance. Your rental agreement should detail how much insurance is necessary to get a policy that provides enough coverage.

Your renters insurance coverage limits can be tailored to the value of your belongings. By creating an inventory of your possessions, you can more accurately determine the value of your items. Peachstate Insurance can help you get an appropriate policy and determine if you qualify for any discounts.

Factors Affecting the Cost of Renters Insurance

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