The Pros and Cons of a High Deductible Tenant Insurance Policy

Make an informed decision about tenant insurance by understanding the pros and cons of a high deductible policy.

Tenant insurance is a type of insurance that protects renters from financial losses due to theft, damage or liability. It’s important for tenants to have insurance to protect their belongings and themselves from any unexpected events. Tenant insurance policies come in different forms, with different coverage options and deductibles. One choice buyers have to make is whether to purchase a tenant insurance with high deductibles or low deductibles. In this article, we will explore the pros and cons of a high deductible tenant insurance policy.

Need Tenant Insurance?

Get a Free Quote

What Is a High Deductible Tenant Insurance Policy?

A tenant insurance policy with a high deductible is a policy that requires the policyholder to pay a higher amount out of pocket before they can cash in on their policy. Deductibles typically range from $500 to $2,500 or more. The higher the deductible, the lower the monthly premiums. This type of policy is ideal for renters who want to save money on monthly premiums but are willing to pay more out of pocket in the event of a claim.

Related Read: When Should You Review Your Insurance Premium?

The Pros of a High Deductible Tenant Insurance Policy

Lower monthly premiums

The biggest advantage of a high deductible tenant insurance policy is the lower monthly premiums. Tenants who opt for a high deductible policy can save a lot of money over time on insurance premiums. This can be especially beneficial for renters who are on a tight budget and want to reduce their monthly expenses.

Encourages responsible behaviour

A high deductible plan is good because it can also encourage tenants to be more responsible with their belongings. Knowing that they will have to pay a higher deductible in the event of a claim can motivate tenants to take better care of their possessions and avoid risky behaviour. This can ultimately lead to fewer claims and lower insurance costs for everyone.

Need Tenant Insurance?

Get a Free Quote

Protection against catastrophic events

A high deductible policy can also provide protection against catastrophic events. If a tenant experiences a major loss due to a fire, flood or other natural disaster, a high deductible policy can help cover the costs of replacement or repair. While the tenant will have to pay a higher deductible, the insurance company will cover the majority of the costs, which can be a lifesaver in a time of crisis.

Related Read: Top 10 Reasons Why Your Tenant Insurance Claim May Be Denied

The Cons of a High Deductible Tenant Insurance Policy

Higher out of pocket expenses

The biggest disadvantage of a high deductible tenant insurance policy is the higher out of pocket expenses. Tenants who choose a high deductible policy will have to pay more in the event of a claim. This can be a burden for renters who are already struggling to make ends meet. It is important for tenants to carefully consider their financial situation before choosing a high deductible policy.

Limited coverage

Another potential downside of a high deductible policy is limited coverage. Some insurance companies may offer lower coverage limits for high deductible policies, which can leave tenants vulnerable in the event of a major loss. It is important for tenants to carefully review the coverage options before choosing a high deductible policy.

Related Read: FAQs About Tenant Insurance

Need Tenant Insurance?

Get a Free Quote

Risk of under-insurance

A high deductible policy can also increase the risk of under-insurance. If a tenant chooses a high deductible policy with lower coverage limits, they may not have enough insurance to cover the full cost of a loss. This can leave tenants in a difficult financial situation and unable to replace their belongings. It’s important for tenants to carefully consider their insurance needs and choose a policy that provides adequate coverage.

Should I Go for a High or Low Deductible?

A high deductible tenant insurance policy can be a good option for renters who want to save money on monthly premiums and are willing to pay more out of pocket in the event of a claim. However, it is important for tenants to carefully consider their financial situation and insurance needs before choosing a high deductible policy. Tenants should review the coverage options and deductibles carefully to ensure that they have adequate insurance coverage in the event of a loss. Ultimately, the decision to choose a high deductible tenant insurance policy should be based on an individual’s financial situation and risk tolerance.

APOLLO offers customizable tenant insurance designed to protect renters, with the ability to adjust your coverage and deductible limits. Get a free quote in less than a minute and we’ll send your policy documents right to your inbox.

Looking to learn more about deductibles in tenant insurance? Read our article Do I Have to Pay a Deductible When Making a Claim? for more information.

APOLLO Has You Covered

Get the protection you need in minutes with custom Tenant Insurance from APOLLO.

Get a Free Quote