Renters insurance provides important liability protection and coverage for personal property, two crucial protections when renting any form of living space. But while renters insurance is simpler and easier to get than other types of insurance, not all applications are guaranteed to be approved. Let’s look at five common factors that affect one’s renters insurance application.
1. Property location.
Just like with homeowners insurance, renters insurance companies valuate the likelihood of damages from natural disasters, setting premium costs accordingly. Naturally, areas at a higher risk of damages tend to cost more. If the area where the property is located poses a risk that is too high, the insurance company might refuse a policy altogether. From their perspective, the increased likelihood of having to incur costs is not worth it.
2. Hazards at home.
A property’s surroundings are not the only potential hazards insurance companies see. Items within the property, such as a trampoline or a pool, may raise the price of insurance premiums. Keep in mind that insurance companies don’t just factor in dangers to the policyholder. If a guest is invited to the property and said guest slips, they will likely sue the renter, creating a massive claim for the insurance company.
Just like landlords, insurance companies want to know what pets you may or may not be bringing to the property. There is a list of dog breeds that are commonly known to be aggressive, and more likely to cause harm to others. Yet another scenario that can lead to a large liability claim against the insurance company.
4. Previous rental insurance claims.
Renters insurance poises the same danger to the policyholder as all other types of insurance: the more claims that have been filed in the past, the more expensive the policy will become. When filing a renters insurance application, companies will ask to see the applicant’s history of claims for up to the previous five years. Multiple claims suggest that the policyholder is wreckless, and that they take too many unnecessary risks. At a certain point, too many claims could make it a struggle to find any coverage at all.
5. Lapsed coverage.
Applicants who previously had renters insurance but let the coverage lapse does not bode well for insurance companies. A lapse shows that the applicant is irresponsible, and that they were not able to keep up with their payments. Once more, this is a case of insurance companies looking to minimize risk for themselves.
However, not all insurance companies are the same, and while some might deny applications, others might accept it. The trick is finding the right fit for you, and that is why our agents at Comfort Insurance & Finances are here to serve you.