When we’re discussing a new policy with someone, one of the questions that comes up is how much of a deductible there is on the policy. Often, the question that follows that one is “What is a renters insurance deductible?” They’re often misunderstood, so let’s take an in-depth look at renters insurance deductibles, what they are, who they’re paid to, and why they exist.
What Is A Renters Insurance Deductible?
Let’s say that you have Corpus Christi, TX Renters Insurance and your neighbor has a small kitchen fire. As a result, you have smoke damage to your furniture, so you need to make a claim on your renters insurance . A renters insurance deductible is the amount of risk that you retain and do not transfer to the insurance company you’ve purchased the policy from.
In other words, it’s the amount of money that you spend out-of-pocket before the policy kicks in and covers the rest of the loss, up to the policy limit. You’re often able to select the deductible you want, for a small difference in premium. A higher deductible makes very little difference in the premium because it has only a minimal statistical impact on the frequency of claims.
Often, the impact on premium of a higher deductible is so low that it’s just not worth it to take the higher deductible. If you save ten dollars a year by increasing your renters insurance deductible to $1,000 from $500… It would take you fifty years of having insurance after a loss to recoup the extra $500 that you had to pay when the loss occurred!
Who Is A Renters Insurance Deductible Paid To?
The renters insurance deductible is subtracted from the total value of your loss once that amount has been determined. You pay your renters insurance deductible to the person or company from whom you buy property to replace what was lost. You do not pay your deductible to the insurance company, or to anyone else. It’s not a fee or a charge of any kind, it’s just the amount of money that you are responsible for in the event of a loss.
We’re not sure where people got the idea that a renters insurance deductible is a fee paid to the insurance company. When you think about it, the whole idea doesn’t even make a great deal of sense – you’ve already paid for the insurance, it’s not likely that you’d have to pay more in order to make a claim. If you have a loss and have difficulty coming up with your deductible, you might do well to spread that money around some to make it easier to come up with.
In other words, when you buy a new couch (a big-ticket item) to replace the old, take the money you need from the insurance claim proceeds except for $100 of it. That $100 comes out of your pocket, and you’ve now paid $100 of the deductible. This helps to make it easier to come up with the money. Ideally, you’d always have your renters insurance deductible amount in a savings account, but we know that budgets are tight and this isn’t a perfect world.
Why Does Renters Insurance Have A Deductible?
There are a couple of reasons that you find a deductible on your policy. A renters insurance deductible, first and foremost, reduces the frequency of very small claims which absolutely should not be made under insurance. There simply is no reason to make an insurance claim for a theft of goods valued at $100. That’s an amount that the vast majority of people could and should absorb out-of-pocket. Insurance is designed to cover catastrophic losses that you wouldn’t otherwise be able to pay for yourself, and having a deductible helps to reduce those $100 claims which shouldn’t be made. This helps to reduce the cost of Corpus Christi, TX Renters Insurance for everyone.
In addition, having a renters insurance deductible helps to reduce the risk of insurance fraud. According to the Insurance Information Institute, property and casualty insurance fraud costs $32,000,000,000 per year. Yes, 32 billion dollars a year. People are less likely to commit fraud when they know that they’ll have to appear to put some of their own money into the claim. In addition, people on the whole recognize that adding items to a claim, or “claim padding” is insurance fraud and are unwilling to do it because of the consequences.
How Can I Get Renters Insurance With A Low Deductible?
You can get a low renters insurance deductible simply by asking for one when you start the policy. It will change the cost of your policy, but generally only minimally. Different underwriters have different deductible amounts. For example, you can get a $250 renters insurance deductible in Corpus Christi pretty easily. But in other parts of the country, you might have a more difficult time finding that.
Different underwriters favor different types of policies, and different types of risks. By offering or not offering a lower deductible, an underwriter can exercise some control over the policies they write and the conditions under which a loss payout is likely. All of this impacts your cost, but usually not substantially.
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.
To get a low renters insurance deductible, or to find out more, just call (800)892-4308 or click to get covered - whether you need Corpus Christi renters insurance quotes online or coverage anywhere else!
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