by Ray Burow

Created on: January 12, 2010   Last Updated: July 16, 2010

Downsizing has become a common trend  these days. Families are cutting back on luxuries and are reconsidering necessities. Tightening the belt a little to save money is good, but not when it comes to renter’s insurance.

If you rent your home you must be insured. If you already have renter’s insurance, keep it. If you do not have renter’s insurance, get it.  If you find yourself affected by a catastrophopic event, the money spent on insurance will be well worth it. Besides,  it is possible to control the cost of renter's insurance and still get the best coverage to meet your needs. Educate yourself on the factors which affect the cost of renter’s insurance and save money on your policy. Consider the following suggestions to assist you, in choosing the renter's insurance which is right for you.

• Deductible

Decide on the amount of money you are willing to pay, before your renter’s insurance kicks in. This amount is your deductible, and affects the overall cost of your policy. Absorbing some of the replacement cost of your items translates into savings on your renter’s policy.

• Do not over inflate your coverage.

Get a good idea of what you own, and have the insurer apply an overall dollar amount. You will save money by not submitting the cost of individual items.

• Determine how you want to be reimbursed.

Insurance companies reimburse the insured one of two ways. Decide whether you will be compensated for the Actual cost of the item, or the Replacement cost of the item. You can save money by choosing to be reimbursed for the actual cost of the item, and not by what it would cost you to replace it. If you have a 20 year-old couch, it is not worth what it would cost to buy a new one. Choosing this route will definitely up your premium. Sure you will have all new stuff, but your premium will reflect it.

• Separate policies

Opt to have a separate policy to insure very expensive jewelry or rare collections which are hard or impossible to replace. Better yet, save money on your premium by keeping these items in a safe deposit box.

• Dog lovers beware.

Some companies will not insure certain breeds, while others increase the premium for the dog owner. This is especially true if you have a dog with a history of biting. Dog lovers consider their dogs as members of the family and would never get rid of it to save a few bucks. This is not the suggestion. The suggestion is to communicate with the insurance company before buying a dog. The company will have a list of breeds which they will insure. Paying out of pocket, in case of an unfortunate Fido event, may also be an option. Taking precautions where pets are concerned can save money on your renter’s insurance premium.

Do not fool yourself into believing you will save money by not having renter’s insurance. It is a necessity not a luxury, which you may well  afford by controlling it's cost.

Learn more about this author, Ray Burow.
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