Many things influence the price people pay for renters’ insurance. The age and location of your building affect insurance cosrs. Renters’ insurance pays to replace your personal property like clothing, electronic equipment and furniture if it gets lost, damaged or stolen. It does not pay if the building gets damaged,’
Buyers control some factors that influence how much they pay to protect personal possessions. Insurance companies control others based on company standards.
The policy holder sets the ‘deductible.’ This is the amount the insured pays if their property is damaged or destroyed. For example, a power surge melts your $1,200. The insurance company will pay to replace it, minus the “deductible.” Deductibles range from $100 to $1,000. The lower the deductible, the more you will pay.
Policy holders also choose if their policy pays “replacement cost” versus an “actual cash value” policy. An actual cash value policy pays current market value for damaged property. For example, your computer cost $1,200 three years ago. Today it’s worth only $300. The company only pays $300 for the damaged unit even though a new computer costs more.
With a “replacement cost” policy, the insurance company pays current market price so you can buy another computer. Remember, ‘replacement cost’ policies come with a higher price tag.
People can buy protection for a single expensive item, like a diamond ring. Adding a rider to the policy for a ring will also increase the premium. If you own a dog, your insurance will cost more, especially if you own a dog on the industry’s high risk pet list. The list includes Pit Bulls, German Shepherds, Dobermans and Rottweilers. Before bringing that cute puppy, make sure it isn’t on your company’s banned pets list. Companies can cancel your policy if your pet is on the list. Fido may offer a level of security, but consider installing a security system instead. This will reduce the price you pay for your policy, not increase it.
You also save save on renters’ insurance if you buy more than one policy from your agent. Typically that includes home and auto insurance but check with your agent. Other types of polices such as life and health insurance may also qualify you for a discount.
Credit scores can affect the price people pay for insurance. This varies from company to company. This means people with high credit scores and no claim history pay less for their policies. Someone with a poor credit score or a recent claim will pay more.
Insurance companies determine rates based on a variety of criteria known as underwriting guidelines. Location tops the list. If you choose to rent an apartment near water, in a high crime neighborhood, or in a remote area with no water source, your insurance will cost more.
Fire detectors, dead bolts, and fire extinguishers on the premise will help lower the cost of your premium. The cost of your policy is also based on the material used to build your building, its age, and the condition of the roof.