When you rent a house or an apartment, you should consider purchasing renters insurance because it provides financial protection against loss or damage to your belongings. Unlike homeowners insurance, most renters insurance policies only cover the value of your possessions, and not the structure you live in.
"Too many renters underestimate the value of their personal items," said Claire Wilkinson, a spokeswoman for the Insurance Information Institute (III), adding that furniture, computers, audio equipment and other belongings like clothes are often significant investments that should be covered.
Because you are only purchasing coverage to insure your belongings, renters insurance is often cheap insurance coverage. In fact, Wilkinson says renters insurance remains one of the best buys in the industry. The average cost of a renter's policy--depending on the deductibles and coverage amounts--was less than $200 per year in 2005, the last year for which statistics were immediately available.
Although renters insurance is affordable, there are still steps you can take to make your insurance premiums even cheaper. For example, it turns out there is yet another reason to quit smoking--it can save you money on your renter's insurance.
"Some insurers will offer discounts to non-smokers because smoking is the number one cause of all property fires," says Wilkinson.
In addition to being a non-smoker, adding an extra smoke alarm or two can also bring down the price of your insurance rates. Installing a dead-bolt to your hallway door and raising the deductible on your policy can drive down premium costs even further. Upping the deductible to $500 from $250 can lead to significant savings, Wilkinson advises.
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