Renters insurance costs will vary depending on the coverage required, the deductible and the location of the property insured. Renters insurance, in general, will cover personal possessions in the rental property. Stolen or damaged possessions will also be covered. Many renters’ policies will also cover people who may become injured while visiting on the rental property.
Average Cost of Renters’ Insurance
The average cost of renters’ insurance for a typical household is between $7 and $30 per month. Since the recent economic recession, renter’s insurance has been lower than normal. One source, the Independent Insurance Agents & Brokers of America, states the average cost of insurance is $12 monthly for $100,000 of liability and $30,000 of property coverage. Additional coverage will increase the premiums.
People considering purchasing renters’ insurance will be required to answer questions about the rental property. For instance, the renter may have to disclose the number of rooms in the home and the address of the home. The answers to these questions will affect the cost of the premium.
What Could Increase the Cost of Renters’ Insurance?
Believe it or not, being within 10 miles of a fire station could increase the renter’s insurance premium. A lack of smoke detectors and sprinklers can also increase renter’s insurance. Certain breeds of dogs can also raise an insurance premium.
A home devoid of smoke detectors or sprinklers may have higher insurance premiums. More damage is likely to occur in a home where early fire detection devices are not present. Insurance companies look favorably on these types of devices. Deadbolts and alarm systems increase the safety of a home and decrease the likelihood of theft.
Different coverage options will affect the overall cost of renters’ insurance also. These coverage options may include expensive furniture, appliance or electronics. Insurance companies are more likely to increase premiums as the price of the insured item increases. If the possessions are in a high risk area, the premiums will increase more.
Jewelry, furs or computers will require additional coverage. Most renters, for instance, schedule a separate policy for an engagement ring or diamond necklace. Since most renters’ insurance will not cover loss of data and other business related items, business items may also need to be insured separately. Identity theft insurance may also be added as an additional precaution.
Most renters obtain the loss of use insurance to protect all possessions in the event of a catastrophic event. The personal liability aspect of renters insurance will cover medical expenses of people injured on the property. If the injured party decides to sue, related expenses will be covered.
Costs Associated with Renters’ Insurance
Renters must be prepared to pay the cost of the deductible. This is the amount the renter must pay before the insurance company will cover the claim. Renters will pay a smaller deductible when the monthly insurance premium is higher.
Are Any Discounts for Renters’ Insurance Available?
Rental insurance companies offer discounts for a variety of situations. The most common situation includes multiple policy discounts. Insuring a car and rental property with the same insurance company will most likely result in an insurance bundled policy. Renters with no evictions or late payment history will also be offered a discount.
Other Potential Costs
Landlords or condo associations will not cover the personal belongings of an individual. Landlords will only cover damage to the building. Renters insurance is necessary to cover an individual’s personal effects. If a flood or earthquake occurs, personal items may not be covered by renters’ insurance. Renters should ask questions to determine if they need an additional policy to cover events such as floods or earthquakes. These policies will fill the gaps left by a basic policy.
Know the Type of Coverage Required
Select the coverage to fully cover household goods in the event of a loss. If the estimated cost of household goods is $25,000, then the loss will provide a $25,000 payout. Many renters may have household goods with a value of $25,000, but they may select a policy only covering $20,000 to lower the monthly premium.
Renters may also prefer replacement costs to simply an estimated cost of household goods. Replacement cost insurance will replace the item according to today’s prices rather than a depreciated payout. Most renters simply will opt for the total payout to make the process less complicated.
Contact an insurance company for a free insurance quote today. Protect household goods and visitors before it is too late.