How to Reduce Cost of Renters Insurance in Colorado

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How to Reduce Cost of Renters Insurance in Colorado

Sep 01, 2022

What to Do After a Car Accident in Colorado

BY: KEVIN VOLZ | INSURANCE AGENCY PRINCIPAL

PERSONAL INSURANCE

The average cost of renters insurance in Colorado is $10.7 per month or $128 annually. While this is about $46 less than the national annual average of $174 per year, Colorado residents can still save money on their renters' insurance by following a few simple tips.

This blog post seeks to cover critical aspects related to the cost of renters insurance in Colorado, including:

How location impacts cost
The importance of credit score
How deductibles affect premiums
Ways to lower monthly premiums

Let's dive right in!

How Location Impacts the Cost of Renters Insurance in Colorado

Just like with auto insurance, the cost of renters insurance varies based on where you live. In general, rates are higher in urban areas than rural areas because there is a greater chance of your property being damaged or stolen.

For example, the average cost of renters insurance in Denver is $11.68 per month, or $140 annually. This is about $12 more per year than the state average. If you live in a more rural area like Fort Collins, you can expect to pay about $9.50 per month or $114 annually - that's about $14 less per year than the state average.

If you live in an apartment complex, your rates will be lower than if you rent a house because there are generally more security features in place (e.g., gated entry, on-site security guard).

The Importance of Credit Score When It Comes to the Cost of Renters Insurance in Colorado

Your credit score is one of the biggest factors that insurers take into consideration when determining your rates. This is because people with good credit are generally less likely to file a claim.

If you have a poor credit score, you can expect to pay as much as 20-50% more for your renter's insurance than someone with an excellent credit score.

How Deductible Choice Affects the Price of Renters Insurance in Colorado

Your deductible is the amount of money you have to pay out-of-pocket before your insurer steps in to cover the rest of the costs. The higher your deductible, the lower your rates will be.

For example, if you have a $500 deductible, you can expect to pay about $11 per month in premiums. If you increase your deductible to $1,000, your monthly rates will drop to about $10.

Ways to Lower the Monthly Cost of Renters Insurance in Colorado

As discussed above, your location, credit score, and deductible choice are all major factors that impact your rates. You can't do much about your location, but you can improve your credit score and choose a higher deductible to lower your costs.

There are also a few other ways to reduce the cost of your renter's insurance:

Take advantage of discounts: Most insurers offer discounts for things like installing a home security system or being claims-free for a certain period of time.
Bundle your policies: If you bundle your renter's insurance with your auto insurance, you can usually save 10-20% off your total premiums.
Pay annually: Many insurers will give you a discount if you pay your premium in full for the year rather than monthly. This can save you up to 5% off your total cost.

How to Amend Your Credit Score

There are a few things you can do to improve your credit score, which will in turn lower the cost of your renter's insurance.

Check your credit report for errors: You're entitled to one free credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) every year. Review your report carefully to make sure there are no errors that could be dragging down your score.
Make all of your payments on time: Payment history is the biggest factor in your credit score, so it's important to make all of your payments (including credit cards, loans, and rent) on time, every time.
Keep your balances low: Your credit utilization ratio (the amount of debt you have compared to your credit limits) should be below 30%. So, if you have a $1,000 credit limit, you should keep your balance below $300.
Use a mix of different types of credit: Having a mix of different types of credit (e.g., credit cards, loans, etc.) is good for your score. So, if you don't have a lot of different types of credit, consider opening a new account to diversify your credit mix.
Wait to apply for new credit: Every time you apply for new credit, your credit score takes a small hit. So, if you're not planning on opening any new accounts in the near future, it's best to wait to apply for new credit until you need it.

Factors to Consider Before Raising Your Renter's Insurance Deductible

While you can save much on your monthly premium costs by raising your deductible, you need to be sure you can actually afford to pay that amount out-of-pocket if you need to file a claim.

For example, let's say you have a $500 deductible and you accidentally start a kitchen fire that does $5,000 in damage. If you have to file a claim, you'll only have to pay $500 and your insurer will cover the rest.

But, if you have a $1,000 deductible, you'll have to pay the first $1,000 of the damages yourself. So, before you decide to raise your deductible, make sure you have enough money saved up in case you need to file a claim.

Working with an Insurance Agent Can Help You Save

If you're not sure how to lower your renter's insurance costs, working with an experienced Colorado insurance agent can be a big help. An agent can review your situation and make recommendations on how to get the best coverage at the best price.

And, if you're ready to start shopping for renter's insurance, compare quotes from multiple insurers to find the best deal.

Note that Working with a renter's insurance agent in Colorado does not add to the price of the policy.

In fact, an agent may be able to find discounts and savings opportunities that you didn't even know existed.

For example, some insurers offer discounts for installing a home security system or being claims-free for a certain period of time. An agent can help you take advantage of all the discounts you're eligible for.

Have Questions? Compare Quotes from Top Insurers and Save

If you have questions about renter's insurance or would like to compare quotes from multiple insurers, we can help.

We will work with you to find the best policy for your needs and budget. We'll also help you take advantage of all the discounts you're eligible for.

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By Kevin Volz • 05 Feb, 2024

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