Team at InsureBC. Writing things about insurance tips and tricks.
Regardless of the product, you’re looking to purchase, you are often confronted with the difficult decision of whether to buy based on price or quality. In an ideal situation, you’d like to find that balance between cost and value that gives you the sense you’ve got both.
When it comes to renters insurance, the same rule applies and you are often left questioning how much coverage you need versus how much do you need to spend to gain peace of mind from your policy. A cheaper provider or plan can make a big difference in your monthly budget. However, the price shouldn’t be the only factor in your choice of renters insurance provider. There are both positive and negative reasons why some renters insurance policies are cheaper than others.
Understand the difference in rates
How much is renters insurance anyway? Insurance companies are getting smarter when it comes to accurately rating their insurance products so the rates have become quite sophisticated and based on data that has been tracked for years.
In essence, the rate insurance companies charge is based on the risk they face determined by the potential that someone will make a claim. The greater the risk, the higher the rate; the lower the risk, the lower the rate. Makes sense, right? Sure, but there’s far more to it. To further assist them with setting rates, insurance companies typically study claims history of clusters of people with similar characteristics; a form of profiling. This information is then added to the loss history to determine a more precise premium to charge. Insurance companies will further base renters insurance rates and discounts on factors such as:
- Is your neighborhood particularly vulnerable to hail, wind or other weather exposures?
- What is the crime rate in your particular neighborhood?
- What is the value of your personal property?
- What is your own insurance history?
Now realize that there are many different factors used to calculate rates. Your goal is to find an insurance company that has a good history with people similar to you.
Compare quotes with an insurance broker
Based on sophisticated rating systems implemented by the various insurance companies, the best rates for renters insurance vary greatly depending on the above-mentioned factors. At the end of the day, the best renters insurance provider may be the one who offers the highest level of claims service, even if it costs you an extra few dollars each month. You hope never to have to use them, but when you do, it’s important that you can rely on them.
When shopping for renters insurance, it is prudent to get a quote comparison. Some people choose to do this work manually, though there are easier ways. You get an insurance broker to provide you with a few quotes and you go with the best policy that matches your need. Think of an insurance broker as your ally in shopping for insurance. Working with an insurance broker allows you to have the peace of mind in knowing that your needs are being taken care of.
In the good old days, people would ask their local insurance broker to shop around for ‘cheap apartment insurance’. While we still encourage clients to take that approach and talk to our insurance advisors, the reality is that some people prefer shopping for renters insurance from the comfort of their own home. Our digital insurance offers clients the luxury of shopping online while still having access to a team of licensed insurance professionals for any questions that may arise. At the end of the day, the term ‘best’ can be summarized as a combination of the best claims service, the best rates and the most convenient.
Originally published June 22, 2018, updated March 9, 2020