Paying Your Renters Insurance Premium Monthly vs. Annually
You may be thinking that renters insurance isn’t mandatory and, therefore, not worth the money. But it provides enough value to justify the extra budgeting. Renters insurance is designed to protect your assets from a number of covered events, which generally include fire, windstorm, hail, theft, vandalism and other weather-related incidents (earthquakes and floods are typically excluded). While your landlord insures the building structure and common areas, it is your responsibility to protect your own belongings, as well as the safety of your guests.
Okay, so renters insurance is clearly valuable, but how much does it cost? Probably less than you think. Most standard renters policies will cost less than $20 per month or $200 per year. But the frequency of your payments can sway those numbers. How?
Each time you make a payment, most insurance companies will charge you a fee to cover their administrative costs of processing your payment. While this may only be a dollar or two, those dollars add up over time. If you can afford to make larger payments—quarterly, biannually or even annually—it’s worth your while to look into less frequent payment options.
Many people enjoy the one-and-done style of biannual or annual payments, which is well within the reach of many thanks to the low policy price. However, before committing to any payment schedule, it’s helpful to familiarize yourself with your insurance company’s accepted methods of payment. Automatic payments may not be the best solution if you’re worried about overdrawing your account. Manual payments, either electronic or by paper check, are the preferred method of many customers.
Whatever payment plan you can afford, set yourself due date reminders on your calendar so you don’t accidentally let your coverage lapse. Still have questions? Your independent insurance agent is there to clear up any lingering confusion.