High Risk Renters Insurance Explained

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Renters insurance is often very affordable, with policies costing between $8 and $15 per month in general. High risk renters insurance costs more, however. The insurance companies face a greater risk of actually paying out claims to you for theft, damage or liability if you’re deemed “high risk”. While that’s what you should expect, the insurance companies think that it costs more to protect you, and therefore you should pay more.

Crime

Living in a high crime neighborhood will cost you in many ways, including higher costs for renters insurance. Companies will offer you high risk renters insurance, but not many will offer regular renters insurance. The danger of getting robbed or being the victim of other criminal activities that result in your items being lost or damaged is too great, and they want you to pay for it. Unless you’re willing to move, there’s very little you can do about paying higher costs.

Flood Zone

The apartment may be located in a flood zone, resulting in high risk renters insurance coverage. Unfortunately, there’s not much you can do about that as a renter. The insurance company will deem you as risky because the chances of losing your items in a flood are high, and they want you to bear that risk by paying higher premiums. The only way to pay lower premiums is to move.

Distance from Fire Department

Living in a rural area can be challenging when you want to get a good rate for renters insurance. The problem for some renters is the distance from their apartment to the nearest fire department. Each insurance company has its own distance requirements, but the further away you live, the more expensive it may cost you for coverage. The reason being that you’re likely to have everything destroyed in the event of a fire, because fire services won’t be able to reach you in time. Your apartment will be considered “high risk” for fire. Some insurance companies won’t offer any coverage because of the risk, but others will offer you a high risk renters insurance policy.

Bill Payments History

One of first questions you’re asked when you try to get a quote for renters insurance is, “What is your social security number?” Insurance companies want that information to obtain and review your credit report. The company wants to see whether you pay your bills on time, late or not at all. If your credit history shows that you miss payments repeatedly or if there are other major issues, they’ll offer you high risk renters insurance. It’s still a better option than no renters insurance, and resolving outstanding debts and other issues may help to reduce your policy in future years.

High risk renters insurance is necessary if you can’t buy regular renters insurance. Adjust your budget to include the higher costs, and avoid the risks of having no insurance at all. You’ll be protected against liability claims in addition to loss of your personal property, and liability lawsuits can amount to several hundred thousand dollars in damages.

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