Ought to You Cancel Your Renters Insurance coverage?
As you review your recurring expenses, you are likely looking for ways to cut costs. If you pay for this coverage but have never made a tenant insurance claim, it can result in unnecessary expense. If so, you may be wondering if you should cancel your tenant insurance. Do you need this guideline? If not, can you cancel the tenant insurance at any time? And will the money you save ultimately be worth it?
Probably not. Because tenant insurance is cheap – an average of $ 15 a month, according to the Insurance Information Institute – and offers a wide range of protections, most people benefit from keeping their policy up. For the cost of a few latts a month, you can keep all your belongings safe, get liability insurance and have your insurance policies help you with hotel costs if a covered hazard such as a fire makes your rent inanimate.
All in all, it’s a great protection for the amount you pay. However, if you are wondering whether to cancel tenant insurance or how to cancel tenant insurance, you’ve come to the right place.
[ Read: How to Choose the Best Renters Insurance ]
When it is a good idea to cancel tenant insurance
While tenant insurance is generally a good idea, there may be some instances when it makes sense to cancel tenant insurance:
Move in with your parents
When you move back in, you can likely cancel your tenant insurance. But make sure that your parent’s guidelines have enough limits to cover all of your belongings and liabilities. For example, if you are bringing a dog home, you may want to speak to your parents about increasing the liability limit.
Buy a house
If you are no longer a tenant, you do not need tenant insurance.
However, this does not mean that you should go without coverage. Insurance coverage becomes even more important once you are a homeowner.
[ Read: The Complete Guide to Home Insurance ]
While you are buying your home, you may be wondering if you can cancel tenant insurance at any time. In general, the answer is yes – and your insurer may even give you a refund for any premiums you’ve paid that you don’t use. However, make sure to carefully set the cancellation date on your tenant policy. Do not let your policy expire until you move your belongings into your new house and your contents insurance comes into effect.
Sell all of your things
This may seem extreme, but you can choose to outsource the majority of your possessions. Maybe you have been traveling for a long time or moving across the country and want to start over.
In this case, it can make sense to cancel the tenant insurance as there is no need to protect personal property. But if you keep even a few possessions – especially valuable ones like a laptop or jewelry – think twice before canceling your coverage. Instead, you can lower your coverage limits to lower the cost of your premiums if you have sufficient coverage.
Joining your roommate’s policy
If you live with roommates, it probably doesn’t make financial sense to have two separate tenancy agreements. Instead, you can increase the coverage limits on your roommate’s policies to cover your data, add yourself to their policies, and cover half the premiums.
[ Read: What Does Renters Insurance Cover? ]
How do I cancel my tenant insurance?
If any of the above situations apply to you, you want to find out how to cancel tenant insurance. Here are your basic steps:
- Set the cancellation date. Before contacting your insurer, you should find out when to cancel your policy. Generally, you want this after you have been protected by another policy. In other words, wait until you’ve moved back in with your parents, added to your roommate’s policy, or covered by your new home insurance.
- Notify your insurer. How you do this depends on your insurer. You can check their website to see if they offer a way to cancel your coverage online. However, you usually have to call them. While you are on the phone, ask them: Can you cancel tenant insurance at any time? You may face a penalty for prematurely terminating your policy, although these penalties are relatively rare for tenant insurance.
- Fill out all required documents. You may need to sign a form to confirm the cancellation of your policy. Ask your insurer what they need from you to process the cancellation of your policy.
- Update your information with them. If you move, make sure the insurance company has your new address so they can send you a proof of cancellation.
However, this is just a general guide. The details vary from insurer to insurer. So let’s take a look at the process to cancel tenant insurance with some of the largest tenant insurers:
If you’re wondering how to cancel tenant insurance with Geico, it gets a little complicated. Geico has third party insurers who issue their rental contracts and you will need to contact that company to cancel. This page on the Geico website allows you to select the insurance agency partner who will take out your policy. This will get the contact information so you can cancel your policy.
With State Farm, you can cancel by phone, mail, or in person. This webpage will walk you through each option.
If you’re still curious about whether you can cancel Tenant Insurance at any time, we have good news. State Farm does not normally impose a penalty for cancellation.
You need to call Progressive to cancel tenant insurance with them. Your general customer service number is (888) 671-4405.
Why is it a good idea to get your tenant insurance?
As mentioned earlier, tenant insurance doesn’t cost much. And for a small price per month, you get comprehensive protection.
For starters, you get coverage for all of your personal belongings (up to your insurance limits). That said, if a kitchen fire spreads and destroys your dishes, furniture, clothes, television, or anything else in your rental, your policy can help you replace it all. Same goes for theft: if someone breaks in and snatches your belongings, your policy will pay for the replacement (again up to your policy limits).
Additionally, your tenant policy protection extends beyond the walls of your rental. For example, if personal property is stolen from your car, your policy can help you get it replaced.
[ Read: How Much Renters Insurance Do I Need? ]
In addition, tenant insurance offers liability protection. That said, if a guest slips on your rental and tries to sue you, your policy can help you pay the legal costs – and even cover some or all of the billing. How much protection you get here in turn depends on the amount of liability insurance that you include in your tenant insurance.
In addition, most tenant policies include loss of usage coverage. That said, if some covered cause (like a fire) makes it impossible to live in your place, your policy can help cover additional costs like hotel bills and restaurant tabs.
All in all, there is usually no point in canceling tenant insurance unless you are covered by another insurance policy.
Other ways to save on your rental insurance without canceling
If you feel like you are paying too much for tenant insurance, here are some things you can do:
- Check your coverage limits. The mThe more coverage you have, the more you pay for your tenant insurance. So if you feel that your liability (i.e. your risk of being sued) is pretty low, you can lower your liability coverage limits. If you think you have too much personal property cover, you can reduce that amount to make your policy more affordable.
- Ask about discounts. There may be discounts that you do not benefit from. You could get a discount if you bundle your tenants and your car insurance together (i.e. buy from the same company) or, for example, inform your insurer about the home security system you just installed. Spend some time on the phone with an agent asking about any discounts available to make sure any applicable discounts are applied to your policy.
- Increase your deductible. This is the amount you will have to pay out of pocket after a covered loss. If you can comfortably bring in $ 1,000, your policy will become more affordable if you increase your deductible to that number from $ 500.
- Pay in full or set up auto payment. Some insurers offer discounts if they know they don’t have to haunt you for your premiums. Find out about your options for getting a small discount on your policy by paying all your premium now (rather than monthly installments) or by creating an automatic blueprint for what you owe each month.
[ Read: The Ultimate Renters Insurance Guide ]
Too long, not read?
You might be tempted to cancel tenant insurance to save a few dollars. But that doesn’t mean that you should, especially since tenant insurance is usually very cheap. If you can’t join someone else’s policy, buy a home, or plan to part with literally everything you own, stick to your policies to provide important protection for yourself.
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