When you are living in a rental property, tenant insurance is a must-have. Keep in mind that even if your landlord has landlord insurance in place, you still need to purchase insurance to protect your possessions. According to research, only half of the UK renters choose to purchase tenant insurance. However, if you have this insurance, it will cover the cost of repair if there is any damage caused by fire, flood, storm, burst pipes, water, leakage, theft and vandalism. Tenants consider insurance as an extra cost, but they can protect themselves from large financial losses by investing in insurance.
The cost of insurance is going up day by day. Every insurance company calculates insurance premiums differently. Following are some common factors that affect tenant insurance costs.
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Property Location
The cost of insurance varies from one area of the country to another. For example, if you are living in an area that is prone to natural disasters such as floods or storms, you may have to pay more for insurance. Similarly, if you live in an area where chances of theft are high, insurers will consider it as high risk, and your insurance premium will be high.
Your Coverage Limit
The more coverage you need, the more you have to pay. For example, if you are taking a big home on rent having three or four bedrooms, your insurance premium will be more compared to a person renting an apartment having one or two rooms. Moreover, if you have expensive jewelry or antiques probably, it would not be covered by a standard renter insurance claim, and you have to add an additional cover that may cost more.
Your Claim History
All insurance providers look at your claim history while calculating your insurance premium. If you have failed claims in the previous four to five years, your insurer will see you as a great risk and offer you a high insurance premium. Having a claim on your record can increase the cost of insurance by up to 20%.
Your Deductibles
A deductible is the amount of money that you pay for a loss before the start of your insurance cover. The more deductible you are willing to pay, the lower will be your insurance premium. Though it keeps insurance costs down, keep in mind not to pay more than you can afford.
Your Credit History
Credit history is another factor that affects the tenant insurance premium. Insurance providers consider it as your ability to pay an insurance premium. The lower your credit score, the more will be your insurance cost.
Other than that, if you have a pet, you have to add an additional cover, and your insurance premium will increase.
Whether you want to get cheap landlord Insurance or tenant insurance, you can get it by following simple steps. These include shopping around, making a price comparison, increasing your property’s security, improving your credit score, and building a claim bonus.