Imagine a catastrophic fire that destroys your clothing, furniture and other personal belongings. Could you afford to start over from square one? With Renter’s Insurance, you have financial protection to overcome such a loss, replace your belongings and move on with your life. The protection and peace of mind you gain is immeasurable! A quick review will help you to understand key factors affecting the price of your policy.
Basic coverage
Renter’s insurance covers three basic areas – loss or damage of personal property due to clearly-stated threats, living expenses when displaced and liability protection against injuries to or property damage of others. The list of 16 to 17 perils covered range from fire and theft losses to those caused by water damage from faulty utilities and acts of civil disobedience.
Loss exposure due to location
Some locations pose a greater risk of loss – high crime areas, tornado belts and hurricane-prone regions, for example. Your premiums will be higher, because your potential for loss is greater. Also, basic coverage excludes specific perils, like flood, wind and earthquake damage. You will need to purchase a special rider to cover damage from these risks.
Value of personal belongings
The more you own, the higher your premiums. If you have high-end furnishingsor a lot of personal belongings, you need greater coverage limits that increase yhour cost. Carefully inventory your possessions to be sure you have adequate coverage.
Amount of liability coverage
If your income and financial worth is high, you may want above-average liability limits to protect you against loss. The increased limits will carry a higher premium.
Deductible amount
The amount of your chosen deductible will impact your final premium amount. The lower your deductible, the higher your premium. Choose a deductible you are able to live with, should you suffer a loss. A $1,000 deductible requires you to cover the first $1,000 of loss. Everything above your deductible is covered, within the limits of your policy.
Special property categories
Basic renter’s insurance limits coverage for special categories of property, such as coin collections, electronic equipment and other types of expensive property. You may purchase endorsements to cover the full value of your property, though you may need to document the real value. Coverage will increase your premiums, but you won’t endure losses resulting from the gap between coverage limits and true value.
Potential discounts
Multiple-line discounts may be available, if you use the same insurance company for vehicle, life, health or other insurance. Often, the bundled group of policies offer “loyalty” discounts for additional types of policies. Discounts might also be earned if your dwelling has protective devices such as burglar alarms, smoke detectors and fire sprinkler systems. It is always wise to ask your agent for guidance about your coverage and discount possibilities.
When you purchase insurance, you balance costs and risks. When you choose lower deductibles and higher limits, you are shifting greater risk to the insurer and will pay higher premiums.