5 Factors that Influence Your Renter’s Insurance Rates

One fact is definitive: whether you’re renting a house, a townhome, a condo or an apartment, you need renter’s insurance. Although your landlord may be responsible for the structure itself, anything inside the home that belongs to you is your responsibility.

Once you have determined the need for renter’s insurance, you will need to look at five different factors which may influence your renter’s insurance rates:

1. Coverage – The coverage you choose for your renter’s insurance policy will likely have the biggest impact on the rates for your renter’s insurance.  Therefore, it is important to carefully review your policy to make sure that you are (a) protected fully against loss, but that you are (b) not overpaying for coverage you do not need.
2. Deductible – Just like auto insurance, your renter’s insurance rates will vary according to your deductible, and the formula is quite simple: the higher the deductible, the less you will pay in rates; the lower the deductible, the more you will pay in renter’s insurance premiums.
3. Actual Cash Value – If you choose an Actual Cash Value policy, your renter’s insurance company will cover what the item was worth as the time of the loss. In other words, the Actual Cash Value option includes the cost to replace the item, minus the item’s depreciation.  Although an Actual Cash Value policy does not pay out as much as other types of policies, it costs much less in terms of premiums.
4. Replacement Cost – If you choose a Replacement Cost policy, you are covered for the actual cost to replace the item, without depreciation. Although a Replacement Cost policy costs more in terms of premium rates, it is often worth the added cost to the renter.
5. Safety Items within the Home – If you possess a number of items which are viewed by the renter’s insurance company as safety items, you may enjoy a discount on your renter’s insurance policy. Just some of the items which may afford you a discount on your renter’s insurance include: deadbolts, fire extinguishers, monitored burglar/fire alarms and sprinkler systems. Your renter’s insurance company may also offer you a discount if you have an auto insurance policy through the same company.

Steve Wyrostek – RentersInsurance.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.