Renter’s insurance will pay to have your personal property repaired or replaced in case it’s damaged or destroyed. You may be reluctant to add another bill, but with some research, rental insurance is really appealing. How expensive is renter’s insurance? How much does rental insurance cost? Learn more below.
How Important is Renter’s Insurance?
You’d be surprised how many renters actually go without renter’s insurance and assume that the landlord is paying for insurance. Little do they know that the landlord’s insurance is only covering the buildings and not what’s inside the buildings.
In some areas, you have to have coverage. In the state of California, landlords and property owners can require that renter’s pay for renter’s insurance so it’s no longer a choice but a necessity. If you’re a renter, you may want to check out your lease to see if you are required to carry renter’s insurance. When you stop to think of the value of all your personal belongings and what it would cost to replace them all, renter’s insurance is really a pretty valuable commodity.
How much does rental insurance cost?
The cost of renter’s insurance can vary from one insurance company to another. There are a few factors that can affect the cost of renter’s insurance, such as:
- The type of coverage you choose
- The amount of coverage you choose
- The deductible you choose
When considering the type of coverage, you’re generally referring to actual cash value vs the replacement cost. Actual cash value is much cheaper but will only cover what the thing is actually worth today. For instance, if a ten-year old roof is destroyed, it will only be covered for what it’s worth. The value would be prorated, and you wouldn’t get much money for the old roof. With replacement cost, you’ll be paid what it actually would cost to get a new one.
The amount of coverage indicates how much you want for your total possessions. You can estimate that your personal belongings are valued at $10,000 or at $50,000. The higher your coverage, the higher your premiums will be.
Deductibles are the amount that you have to pay before the insurance company pays anything. If you have a $500 deductible, you would have to pay $500 before the insurance company would pay anything on a claim. The deductible amount is per claim. The higher the deductible you choose, the lower your premium is going to be.
Is Renter’s Insurance Worth the Money?
As stated above, rental insurance cost may vary by various factors. Although a $50,000 renter’s insurance policy can range in price from $100 to $300 per year, the average cost across the nation is $185 per year, according to the Insurance Information Institute. When you consider what it would cost to replace all the items yourself if they were destroyed, the cost of renter’s insurance is more than worth it to most.