Why Renters Insurance Is Worth Buying
Consumer Reports has no financial relationship with advertisers on this site.
Many people are suffering from the damage or loss of their homes and belongings due to recent natural disasters. But one group that could be most at financial risk are those who rent their homes and don't have renters insurance.
About 95 percent of homeowners have policies to cover theft and damage caused by fires, windstorms, and other natural disasters, but only 41 percent of renters carry equivalent coverage, according to the Insurance Information Institute.
There’s little reason not to get it: The average policy costs just $190 per year, according to the National Association of Insurance Commissioners. For the price of a few lattes a month, renters can cover their possessions, the cost of accommodations elsewhere if their home becomes uninhabitable, and liability for accidents on the premises. They just need to consider what kind of policy is best.
Consider a policy with a high deductible. You can also specify how high you want your deductible to be; that is, how much you pay out of pocket before insurance kicks in. A $500 deductible is typical, but Woan suggests bumping it up to $1,000. “At any stage in your life," she says, "take the highest deductible you can afford.”
By doing this, you’ll discourage yourself from filing small claims, because filing a lot of claims can increase the price you pay for insurance later. This can be particularly important if the next property insurance you buy is a homeowners policy. Because such policies are costlier, lower rates will translate into more savings.
Look for discounts. The price you pay for renters insurance largely depends on where you live, the age and construction of your building, your proximity to a fire department, and other factors that existed when you chose to rent a particular apartment or house.
That said, there are few ways you might lower your rates after the fact. One is to make safety improvements, like installing a deadbolt lock or having a fire extinguisher, and telling your insurer about it. You might also get a small discount, along the lines of 10 percent, for “bundling,” or buying your renters policy from the same company as, say, your car insurance.
More from Consumer Reports:
Top pick tires for 2016
Best used cars for $25,000 and less
7 best mattresses for couples
Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2017, Consumer Reports, Inc.
