It’s quite common for people to call us and want to save money on their renters insurance. Budgets are tight in 2016, which means that people are looking to save something everywhere that they possibly can. The more money you save on Arlington, VA Renters Insurance, the more money you can put away for college for the kids, or for a down payment on the house.
But what happens if your renters insurance deductible is too high? Can you really save enough money that way to make it worthwhile? Many people think changing their deductible is worthwhile, but it’s important to do the math and see if there are really savings to be had there.
How Much Can You Save By Increasing Your Renters Insurance Deductible?
That’s the question of the day, isn’t it? Is your renters insurance deductible a significant driver of cost? Does increasing that deductible save you any meaningful amount of money?
The answer is no. On average across the country, changing your deductible from $500 to $1000 might save you all of ten or fifteen dollars per year. That’s not a significant amount of money to most people, and if you’re trying to cut costs across the board there are about a thousand better ways to do it.
We are absolutely in favor of consumers using budgets and cutting out the fat wherever they can. But let’s put this in perspective. When you suggest increasing the deductible and the insurance expert for renters that you’re speaking to is strongly suggesting that you don’t do this, why is that?
It has everything to do with caring about your coverage, and nothing at all to do with revenue for the company or for the individual you’re speaking to. In reality, raising your deductible means that the company makes about fifteen cents less per month on your policy. Considering what it costs to staff and train insurance experts who live and breathe renters insurance, is it worth their time to try to keep you on a lower deductible to save that fifteen cents? Nope!
The person you’re speaking to knows that you increasing your deductible to $1,000 will save you about ten dollars a year. However, they also know that if you do make the change, you would have to go fifty full years, or five decades, without a claim before that change paid off for you. That’s right, it takes fifty years to earn back that $10 a year if you ever have a claim and have to lay out the higher deductible.
The math is even less favorable to you if you go higher than $1,000.
Increasing your renters insurance deductible just is not a worthwhile way to cut costs.
What Are The Risks If Your Renters Insurance Deductible Is Too High?
If your renters insurance deductible is too high, you run the risk of not being able to replace all of the property that was damaged or destroyed by a covered loss. This may not sound like a big deal, since you could replace most things, but it is a significant hardship because you’ll have to pick and choose what to replace. In other words, you’re paying for insurance so you might as well get the full benefit of the policy!
In addition, if you have a family or kids, a renters insurance deductible that is too high is putting your family or your kids at risk of not being able to replace their stuff. Is that fair to them? This is a more serious concern with younger children, who have many things they need rather than things they want. Bottles. A crib. A place to sit them down where they can play safely. All of these are needs, not wants.
Your deductible puts those things at risk!
Why Does Renters Insurance Have A Deductible?
This is actually a very common question. Why is there a renters insurance deductible in the first place?
One of the reasons that it exists is because insurance is designed to cover significant losses that you couldn’t otherwise handle on your own. Renters insurance is not for when there’s a loss of $100. It’s for more significant losses. By having a deductible, you retain the risk of very small claims while ensuring that you’ll be able to cover larger ones.
No one buys Arlington, VA Renters Insurance and expects it to cover replacing their ten year old Discman if it’s stolen. A small dollar item like that is incidental to your budget. But if it’s part of a larger loss, you want the entire loss to be covered.
What Is The Average Cost Of Renters Insurance? Is It Even Expensive Enough To Be An Area Worth Trying To Save Money?
Renters insurance is incredibly affordable in almost every state. Virginia is one of the least expensive states to get covered in, but it’s not outside the budget of most people anywhere in the country. Working with the insurance experts for renters helps to keep the cost down, because we care about the coverage you’re getting and how it relates to your needs.
The national average price of renters insurance is just $187.00, according to the III. That works out to as little as fifteen dollars per month. The vast majority of families can budget renters insurance easily at those prices.
Additionally, it's important to note that renters are at a significantly higher risk of experiencing loss than homeowners. Renters occupy roughly one third of total housing stock in the country, and yet they are fully fifty percent more likely to experience theft than homeowners, according to the Bureau of Justice Statistics.
It only costs a few dollars a month to protect your family, and this cheap renters insurance is a great way to mitigate the additional risks that come with being a renter.
Effective Coverage offers the nation's only completely mobile platform to quote and purchase renters insurance right from your phone or tablet in just one minute. Get an online renters insurance quote today and protect your family.
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