What Factors Into the Cost of Renters Insurance
The cost of your renters insurance plan is determined by your insurance company using a wide range of factors.
Coverage Level
All renters insurance policies will insure you up to a certain price––often $100,000, $200,000, or even $300,000. The higher your chosen coverage amount, the more expensive the pricing of your premiums.
A claim costing above the coverage limit threshold for your policy may not be considered a fully covered loss by your insurance provider and policyholders may not receive full reimbursement.
Check out the three basic renters coverage types below.
Deductible
A deductible is the amount of money you have to pay out of pocket when you file an insurance claim. A higher deductible means lower monthly premiums––and vice versa.
Value of Property
The greater the value of your belongings, the more your personal property coverage will cost. A penthouse owner with a cherished collection of jewelry and racing bicycles will likely pay more for their renters insurance than a minimalistic studio-dweller.
Residence Type
Renters living in buildings with more security measures––like burglar alarms or alarmed gates––will pay less for their insurance due to a lower likelihood of vandalism, theft, and other types of property crime.
Credit Score
Renters insurance is often more expensive for those with a low credit score.
Owning Pets
Because pets frequently contribute to property damage, a furry companion could hike up your renters insurance rates.
Add-Ons and Bundling
What renters insurance add-ons are right for you?
Many renters insurance companies offer optional add-ons (sometimes also known as riders) for your renters insurance policy.
These add-ons will insure specific types of events not typically covered by a renters insurance policy ––like water damage or identity theft––for an additional fee.
Renters insurance companies also often offer bundling deals with their renters insurance. That means that you can “bundle” your renters policy with another policy, often a car insurance plan, from the same company to receive a discount on both. State Farm is one company that offers discounts to renters who bundle their policies with an auto insurance plan.
