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Renters Insurance Cost

Homeowners with a mortgage are required by law to carry homeowners insurance. Renters, however, are under no such obligation, unless your apartment or condo owners require it as part of the renter's contract. You might be tempted not to bother with it; after all why spend all that extra money for renters insurance coverage you'll probably never need?

In fact, renters insurance costs only about a dollar a day for policies that cover up to $35,000 in damage and $100,000 in liability. With luck you may never need to make a claim; but if you do, it's a comfort to know you're covered.

Renters insurance offers psychological security - you'll sleep better knowing you're covered - but the financial security it offers is very real. If you're a renter without insurance and your home is destroyed in a flood, you'll have to scrape together money for everything from bedding to clothes, dishes to towels, and also find enough for a security deposit for another rental. That's an awful lot to take on when you're going through the emotional distress of losing everything.

If cash is really tight, you do have some control over the cost of your policy. Raising the deductible amount (what the insurance company expects you to pay before they begin coverage) will bring your premium payment amount down. Selecting an Actual Cash Value policy will be cheaper than a Replacement Cost policy, although the amount you would receive in the event of a claim is also less. If you can't afford to spend a lot on a policy, you probably don't need jewelry, fur, art or collectables riders that would raise the cost of renters insurance, since it's unlikely you own those things.

Another way to lower the cost is by purchasing a fire extinguisher, activating a burglar alarm system, and asking your landlord to install smoke and fire detectors. The safer you make your belongings, the less likely it is a company will have to make a payment to you; this will be reflected in a lower rental insurance cost.

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