How are renters insurance premiums decided?
In today’s housing market, it is no wonder that more and more people are renting their properties instead of owning them. And while there are less responsibilities with renting than owning, there is one constant that should be maintained, and that is the aspect of property insurance. If you rent your property, even if your landlord has coverage for the building, you should still get renters insurance to help protect your unit and possessions. Luckily renters insurance tends to be much cheaper than home insurance, but there are still a number of factors that can affect the cost.
Your postal code
Your postal code, as we previously calculated here on HUB Insurance Hunter, can actually make a difference when calculating the cost of your renters insurance premiums. Your postal code indicates to your insurer where you live, and there by informing them where the closest fire hydrants and fire stations are, how safe the area is, and a number of other risk determining factors, such as flood and theft rates. The least amount of risk that your area poses, the cheaper your premium will be.
Prior insurance history
Possibly more than anything, your insurance history helps to determine the cost of your renters insurance. If you have put forth claims in the past, been negligent with payments, or even been dishonest with your insurer, you may have a hard time finding insurance, and if you do, your premiums will be quite high. With a clean record however, you’ll have your pick of insurers and be privy to fair rates and sometimes even deals for having a good history.
Smoker/non-smoker
Are you a non-smoker? Good, not only are you doing your body a favour, but you are also helping your insurance premiums. Whether you smoke or not can impact your renters insurance premiums. Smoking adds a level of risk to your policy, such as the increased chance of fire damage, which causes your premiums to become more expensive. If you are non-smoker you will not have to pay for the added cost to your premium like if you did smoke, and in some cases, you would also be eligible for a discount on your policy.
Credit score
Your good credit score helped you get the apartment that you are now renting. Did you know that you good credit score can also get you a deal on your renters insurance? If you agreed to let your insurer look at your credit history, and you have a favourable score, you could be eligible to a discount on your premiums.
Type of building
Depending on the age and structure of the building your rental property insurance is in can play a role in determining your insurance premiums. If your building is newer or more structurally sound you will see a bit of a break in the cost of your premiums than if it were a much older building. Depending on the insurer, you could also see a difference in price in insuring a home vs an apartment or condo.
Security of building/unit
Whether or not you have 24/7 surveillance, or security at the door can alter the cost of your premiums. The more secure your building is, the less of a risk you pose to your insurer. With effective unit/building security, as well as working fire and smoke alarms you’ll be seen as less a risk, and in return you will receive lower premium costs.
Deductible
Depending on what amount of a deductible you agree to take on can play a significant part in how much your monthly premiums are. The higher you set your deductible, the less you will end up having to pay for your premiums. When you raise your deductible, you take on more of the risk from your insurer in turn they could reward you with a cheaper insurance policy.
Finding the best price
While these are the most common factors that can make up the cost of your premium, every insurer calculates their prices differently. The best way to ensure you get the renters insurance policy you need at the cheapest price, is to shop around online. Additionally, you can speak to your insurance broker and straight up ask if there are any discounts that you are eligible for, and what you can do to help lower the cost of your premiums.