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November 24, 2016

3 Reasons Costing You More on Renters Insurance

You’ve only been living in your new place for a few months, but you’ve just finally been able to start filling it with furniture and other décor. It feels good seeing all of your hard work begin to take shape. But what if I told you that all of that could be taken away? Don’t believe me? It can. What if I also told you how you could protect your home with hardly a cost to you?  

Don’t believe me? Read on. 

Protecting Your Investments

If you were a homeowner, you would buy homeowners insurance, wouldn’t you? Of course you would. You should have that same gung-ho attitude as a renter. The one thing that’s probably keeping you from signing a renters insurance contract is the cost. Yes, you’re absolutely right—renters insurance can be expensive, but that’s only if you don’t where to look or how to shop. Here are three reasons why renters insurance can be extra expensive, and three ways to knock the price back down.

Living at a Dicey Zip Code

Just like with car insurance, your renters insurance premiums can rise based on where you live. How can where you live be a determining cost factor? Based on the following:

-Crime rate in the area
-Population
-Weather forecasts
-Number of businesses in the area
-Number of residents at the complex
-Apartment complex accident history

Insurance agencies price insurance policies by a client’s risk. The higher the risk of a client filing a claim, the higher the insurance premium. If your area experiences break-ins (vehicles included) has low visibility at night and is prone to flooding during storm season, your renters insurance premium will be high. Before you move, look into the history of your neighborhood and that of your apartment complex. If you can flag it for any of the above, look elsewhere.

Living a High-End Lifestyle

Your renters insurance policy will have set financial limits of what it will cover of your damaged, lost or stolen items. The higher the ticket price of those items, the higher the coverage you will be paying. Insurance companies also have the right to deny coverage. If you purchased a brand-new $2,000 MacBook and didn’t report it to your insurance agent and it was later stolen, the insurance company can rightfully deny your claim. Insurance agencies are only responsible for covering what you have listed in your policy. It’s not their fault you didn’t include the new big-ticket item.

When researching what type of renters insurance policy to get, make sure you know how much money each piece of furniture, jewelry and electronic in your house is worth. Once you figure out the lump sum of your belongings, make sure you get the coverage for it.

Living with a Four-legged Roommate

You can have the best pup in the world who the whole neighborhood loves, but your insurance company isn’t going to care. It’s not that your insurance agent doesn’t like animals, (they might have several of their own!) it’s because 4.5 million people are bitten by dogs every year, making your pup guilty by association and labeling you as a high-risk client. 

There are ways to try and combat this renters insurance spike. If your pup is a therapy dog without any violent history, your insurance agent might be able to lower your premium. Make sure to check for pet liability insurance in your plan and ask about discounts.

It’s not hard to find affordable renters insurance policies, you just have to know where to look and how to play the game. Remember, the lower the score card, the better the premium. 

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: 3 Reasons Costing You More on Renters Insurance Rating: 5 Reviewed By: EconMatters