Although renters insurance tends to be cheap, the risk factors tied to your ZIP code and location go a long way toward determining the actual price you pay. Since no one wants to overpay for renters insurance, here’s a look at how your location impacts your rate and the steps you can take to get a lower price.
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Why does my location impact my renters insurance rate?
Renters insurance companies factor your ZIP code into your rate because there are many things about your location that suggest to them how risky you may be to insure.
As a renter, your insurance policy’s personal property protections cover your belongings for theft or damage from a covered peril, such as a fire, windstorm or vandalism.
While this coverage is great for you, theft or damage to any client’s belongings cost an insurance company money in the form of claims payments.
Renters insurance companies recoup these costs by charging more in ZIP codes with higher risks of property being stolen or damaged.
Bear in mind that your location is just one of many factors that determine your renters insurance rate. The others include:
- The amounts of coverage you purchase
- Your insurance history
- Your credit, except in states that ban credit scoring
- Your home’s construction, safety and security features
- Any discounts you are eligible to receive
Since rates vary by customer, it’s best to compare quotes from multiple companies when you shop for renters insurance.
How crime rates impact your renters insurance rate
Renters insurance companies often charge more in ZIP codes with higher property crime rates, because they tend to pay out more in theft claims in these areas.
Congested cities often have higher crime rates than rural areas, so renters insurance tends to cost more in metropolitan areas than it does in small towns.
Savings for reducing your theft risk
Regardless of where you live, you can often save on renters insurance by choosing a home, building and/or complex with theft-prevention features.
- Simply having a deadbolt lock can often earn you a small discount.
- You can usually earn a larger discount if your complex has locked entrances or a security system with third-party monitoring.
How your location’s weather and fire risks affect renters insurance
In certain areas, the risks of severe weather and/or fire may also increase your renters insurance rate.
As a renter, you are typically not responsible for structural damage to your unit. However, a fire or severe storm could result in major damage to your belongings.
If you live in an area exposed to tropical storms, tornadoes or severe thunderstorms, expect to pay more for renters insurance.
Also, if your rental home is surrounded by trees or brush, or you are too far away from a fire station or fire hydrant, your fire risks may drive up your renters insurance rate.
Savings for reducing your weather and fire risks
While you can’t control the weather or fire risks in your community, you can reduce your risks and renters insurance insurance costs. Here are some steps to consider:
- Choose a building made with wind-resistant or non-combustible materials.
- Make sure the home has working smoke and carbon monoxide detectors.
- If you live in an area with wildlife risks, choose a home with defensible space around it.
- Consider paying more in rent for a unit equipped with fire suppression sprinklers and/or monitored fire alarms. These features typically earn renters insurance discounts.
See how much you could save on renters insurance
Additional insurance you may need for your location
Although renters insurance covers many types of natural disasters, it does not cover floods, including storm surges, or earthquakes.
Additionally, renters insurance policies in some areas along the Gulf of Mexico and Atlantic Coast exclude coverage for losses resulting from wind and hail. In these areas, you have to purchase standalone windstorm insurance to protect your belongings from these perils.
What to tell renters insurance companies about your location
Having a few details about your location ready ahead of time can help you lock in discounts on your quotes when you shop for renters insurance.
Your street address and ZIP code already allow an insurance company to pull up a lot of the information they need about your home.
However, you should still also be able to confirm whether your home is less than 1,000 feet from the nearest fire hydrant and less than five miles from the nearest fire station.
Let the insurance company know about your unit’s safety and security features. Some examples include deadbolt locks, smoke detectors, fire suppression sprinklers and security systems.
When you receive your quote, make sure the information it contains about your unit and your building or complex is accurate. If you’re not sure, ask your landlord or look up your building, by its address, on your county assessor’s website.
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