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How You Can Reduce the Cost of Renters Insurance

Keep the cost of your renters insurance coverage low with these money management tips.

What is Renters Insurance and Do You Need It? 

If you rent your apartment or home, you should definitely consider the benefits of paying for a renters insurance policy. Think of it like a homeowner’s policy for people who rent. When you rent, the landlord is responsible for covering damage to the building if there is a catastrophe; however, your landlord is not responsible for replacing your personal belongings if something unexpected happens. This means you will have to cover the cost if you replace your furniture, clothes, electronics, or other items. 

Renters insurance covers the cost of replacing your belongings for a small monthly fee, giving you peace of mind in an emergency. 

What Does Renters Insurance Cover? 

The type of insurance you choose, and the value of your belongings determines what is covered. When you sign up for insurance, you will be given an estimate of the value of your belongings, and a list of specific items of higher value, such as jewelry, electronics, etc.. Basically, renters insurance can cover anything you own. The real question is: what do you need to cover and what is the total value of those items? This blog will help you determine what the best renters insurance policy is for you. 

What Is the Average Cost of Renters Insurance? 

The cost of your renters insurance will vary depending on your needs. On average, the cost of a renters insurance is $12 monthly or $148 annually. However, the cost of your policy will be determined by several things, including: 

·   Location of your rental property and crime statistics of the area 

·   Value of covered items 

·   Payment conditions 

·   Bundled plans and other benefits offered by the insurance company 

Luckily there are several ways to lower the cost of a good renters insurance policy that won’t break your monthly budget.  

How Do You Decrease the Cost of Renters Insurance? 

It’s always smart to look for the best renters insurance you can get. Every dollar you save is one you can use for an emergency or something fun you want to buy in the future. There are many ways to save as much as possible on your renters insurance while making sure all your valuables are covered. 

7 Tips for Saving on Renters Insurance 

  1. Shop around for the best policies. Not all renters insurance is the same, and not every insurance company has the same reputation. Compare your options and read reviews to make sure you get a policy that makes sense for you. Reviews will help you feel confident about the company you work with. 
  2. Bundle coverage with your vehicle or other assets. Before you look into insurance policies, it might make sense to call your car insurance company for your first quote. Many companies bundle auto, renters, and life insurance into packages that can result in a lower monthly cost. 
  3. Increase your policy deductible. One way to lower the cost of renters insurance is to raise the deductible you would pay if something happened. For example, moving from a $500 to a $1,000 deductible could save you a lot each month. 
  4. Decrease coverage limits. Many policies cover thousands of dollars more than you would ever need to file for in a claim. Make sure you accurately estimate the value of your possessions. There is no reason to have a policy that covers more than what you currently own. And if you eventually get more valuable items, be sure to update your policy to include those as well. 
  5. Location matters. All insurance providers consider location when evaluating the cost of insurance policies. Crime statistics and other factors about your location will impact the cost of your policy no matter where you live. If you have been thinking about moving, here are some tips that can help you do it on a budget. If you live in a higher-crime area, ask your landlord to install a security system, which can help lower the cost of your renters insurance. 
  6. Consider payment options. Some policies give a discount for paying annually, making automatic monthly payments, or participating in other unique promotions. The insurance industry is competitive, and most companies have perks they use to attract new policyholders. 
  7. Keep your credit score up! Your credit score is used for rental insurance companies to determine your risk of filing a claim. Having good credit will put them more at ease and could result in a lower premium. 

Tips for Reducing Expenses to Afford Renters Insurance 

You may be thinking that renters insurance may not be necessary or worth the extra $15-20 per month on a tight budget. Maybe you live in a secure building with new electrical and plumbing, so it may not seem like an emergency or burglary is likely. Or you may not think the value of your items is worth the added expense of a monthly renters policy. Many people talk themselves out of renters insurance for these very reasons. However, this small expense can wind up saving you thousands of dollars in the unfortunate event of a fire, theft, or water damage. 

Quick tips for making renters insurance work within your budget:

  • Review your streaming subscription services. Are you paying for things you don’t use? Or can you take advantage of offers to reduce your monthly fees for streaming services? 
  • Cut your entertainment budget. By limiting the number of happy hours or coffee runs by 1-2 drinks per month, you can save enough to pay for renters insurance in most states. 
  • Plan your grocery list—and stick to it. If you don’t go to the grocery store with a plan, you’re probably going to spend a lot more money than if you know exactly what you need. Taking this approach to shopping can save you more than enough for a solid renters insurance policy. 
  • Analyze your situation. At the end of the month, review your bank statements and create your next month’s budget. You will quickly see where you spend too much and how you can easily make room for this important safety net. 

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