If you are a renter and want to ensure that your belongings are safe, you can go in for a renter's insurance. But how much does renters insurance cost? Answer coming up!
What Affects the Cost of Renters Insurance?
Several factors affect the average renters insurance cost, and they also determine the total insurance and the monthly premiums.
One of the most important determinants is the deductible. Now deductible is the amount which will be paid from your pocket, prior to the insurance getting started. These are typically available in the increments of $500.
Then obviously, the amount of coverage you are looking for is going to determine what your renters insurance will cost. It is usually advised to buy a fixed replacement cost for all the belongings. This will be the maximum representation in the advent of a disaster like fire. For instance, if you buy a $20,000 worth of insurance, in case of total loss, you will get the complete amount back.
If the replacement cost is added to your policy, that will also affect the cost of renters insurance. Some insurance companies do give people the option of choosing replacement cost in the policy. This increases the premium but also in turn increases the pay out.
Lastly, insurance companies assess the risk involved in providing an individual a policy, and then based on that assessment that individual will need to pay the premium. This monthly premium is decided by the insurance company. In addition to this, geographical location, existence of pet also sometimes affect the cost of renters insurance.
How Much Does Renters Insurance Typically Cost
It is hard to precisely say how much will a renters insurance cost, because there are many factors affecting it. Still here is an attempt to give you some typical and average costs. Generally the average cost is between $150 and $300 for a year. This buys the person insuring almost $30000 to $35000 per annum, for coverage of personal belongings.
In addition to this, the replacement cost will ultimately decide the cost. The replacement cost, on an average costs around 20% more than the actual renters insurance cost. Now basically this insurance covers the replacement or provisions for repair of property on damage, as a result of wind or hail storms, lightning, fire, smoke, explosions, vandalism, theft, electrical damage, water damage, etc.
At the end, calculating or estimating how much renters insurance will cost largely depends on how much will be the cost, if you lost all the insured possession. If you under insure your possessions, it will increase the losses if you have to file a claim. And if you over insure the coverage unnecessarily, it can increase the premiums! So, think twice and research well before you invest!