To many, insurance can seem like a required nuisance. It's a bill you must pay on top of other bills, and it provides coverage for incidents that might never befall you.
But while insurance is essential, it doesn't have to be expensive. And you shouldn't pay more than your policy is worth.
Know Your Insurance Needs
Before purchasing a renters insurance policy, it's important to know how much coverage you need, so that you're not paying for unnecessary coverage. You can do this by calculating the total replacement cost value of the personal belongings you wish to insure. This is the total amount of money it would take to replace your belongings in the event they were damaged or destroyed by a covered incident. Keep in mind that certain expensive belongings have limited coverage under renters insurance, including jewelry, furs, art and electronics. If you have these types of items, you may need to purchase additional policy floaters for additional coverage.
You want enough coverage to completely cover the total replacement cost value. Thankfully, renters insurance doesn't need to cover the physical dwelling, such as a home or apartment complex. The physical structure should be insured by your landlord, so don't purchase additional property coverage you don't need.
It's also important to know your liability risks. Renters insurance covers general liability for bodily injury and property damage that occurs on the rented property. If you frequently host parties or invite people over, you may need higher limits of liability insurance.
Factors That Affect Your Rates
It's also important to note which factors affect your renters insurance rates. Some factors can raise your rates while others can be used to lower them. The most common influences on renters insurance premiums are:
- Location
- Credit score
- Value of insured items
- Deductible
- Coverage limits
If you don't mind paying more out of pocket after a claim, you may raise your deductible in exchange for lower monthly premiums.
Check your area's average rates to compare how much you're paying. The average cost of renters insurance in the United States is around $15 a month. Alabama has some of the highest rates at around $19.58 a month while renters in Idaho pay an average of about $12.75.
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