For many people, renting a home is often the best option. You don’t have to worry about upkeep and maintenance; some landlords include certain utilities in the rental payment. Who doesn’t want less to think or worry about? But one thing you should be concerned about is getting a good renters insurance policy.
Renters coverage can be surprisingly affordable, and there are some things you can do to keep the cost low. This article will discuss a few ways to find cheap renters insurance.
Understanding Renters Insurance and Its Importance
Have you ever wondered what would happen to your personal belongings if a fire broke out in the home you rent? Maybe you assumed the landlord would compensate you for your goods, or you might have thought the landlord’s policy would cover your prized possessions. However, this is not the case at all.
A landlord may purchase landlord insurance along with their homeowner’s policy, but this only covers certain things. For example, if a fire breaks out, the landlord’s policy will cover the structural damage, which would include exterior damage to the siding, roof, outbuildings, and so on. It would also cover interior items that are part of the house, like cabinets, flooring, and appliances. However, the landlord’s policy will not cover your personal property.
Your personal property consists of things like your clothing, electronics, furniture, etc. If a fire destroys much of the home and its contents, you could lose many of your belongings if you don’t have renters coverage. This would be financially devastating. Many people have no idea how much their belongings are worth. Understanding what renters insurance does and doesn’t cover in Georgia is your first step in getting the upper hand.
If you’re concerned about the extra cost of purchasing such a policy, don’t worry. You will learn how to save on renters insurance after reading this.
The Power of Bundling Your Policies
The first thing you can do to immediately cut costs is bundle your insurance policies with one company. Many insurers will give you a discount if you purchase multiple policies from them. So, if you already have auto coverage, you can add a renter’s policy with the same company and get significant savings on both policies.
For example, let’s say your car coverage premium costs $700 per year, and you have a rental policy with a different insurer costing you $250 yearly. If you bundle both policies with a single company, they might give you as much as a 10% discount on both premiums. That would reduce the cost of your car coverage from $700 to $630 and your renters insurance from $250 to $225. Even if you already have rental coverage, trimming your premium payments is actually a great way to bring down the high cost of renting a place in Atlanta.
Opting for a Higher Deductible to Lower Premiums
You can opt for a higher deductible to lower your monthly premium payment. The deductible is the out-of-pocket costs you have to pay before your insurer begins covering damages to your belongings. So, say you select a $1,000 deductible, and your personal items worth $5,000 are destroyed in a fire. You would have to pay $1,000 toward the cost of replacing your property, and the insurer would pay the remaining $4,000. Having a higher deductible will reduce your monthly insurance payment. Just keep in mind that you’ll need to have that extra $1,000 in savings in case you have to file a claim at some point.
You’ll need to weigh the pros and cons of this option to make the best decision. An agent can review different premium costs based on various deductible amounts so you can look at the overall annual savings and decide what makes the most sense for your situation.
Unlocking Discounts Available for Renters
Make sure you ask your insurer if they offer discounts. Many insurance companies offer various discounts for renters, such as being a senior, being part of certain groups or alumni associations, having a good claims history, or being a loyal customer. It pays to inquire with your insurer about available discounts. You’ll never know what you may be eligible for unless you ask.
Understanding What Affects Your Renters Insurance Rates
There are several factors that affect your premium rate. First, the amount of coverage you require will have a bearing on what you’ll pay out every month. If your personal property is worth a lot, you’ll have to pay more to cover it in the event of an emergency. You’ll need to inventory your items to determine how much coverage you need.
You can also purchase insurance for actual cash value versus replacement cost. The replacement cost is typically higher because it calculates the price of buying the items brand new today. If you opt for actual cash value, the payout would be the value of your depreciated items on the day of the incident. This may not be enough to purchase everything new again, but it would mitigate the total costs while also lowering your premium.
Enhanced safety features may lower your renters premium. Some of these features are:
- Security/alarm system
- Security cameras
- Smoke detectors
- Deadbolt locks
- Sprinkler system
Finally, the place where you get your coverage is important, too. Some companies offer lower prices to remain competitive, while others may charge more but tout their better coverage. Either way, insurance companies will vary in how much they charge, so be sure to shop around for the best rate.
Smart Strategies to Maintain Affordable Coverage
There are strategies that you can put in place to maintain affordable coverage. Since coverage is optional unless your landlord requires it, it’s wise to keep costs low. Some are simple fixes, while others may take some work.
Credit Score
Maintaining a good credit score may play a part in lowering your costs. You can check your credit report to see if there are any errors and correct them. Also, look for ways to increase your score, like putting your bills on auto-pay.
Neighborhood
Living in a low crime vs higher crime neighborhood can reduce your rates. Maybe this isn’t possible, or you may have to wait until your lease is up. But insurance policies are based in part on where you live. So, if you can live in a lower-risk neighborhood, it will help.
Shop Around
As mentioned earlier, each insurer will charge a different rate. Just like any other product or service, you want to purchase from a company that offers a quality product at a reasonable price. Shopping around for the best carrier is an important step in the process.
Payment Options
Usually, paying your annual premium upfront will cost less overall. Your insurer may even offer you a reduction if you sign up for auto-pay. That said, your insurer will likely provide different payment options to suit your needs best.