Cost of Renter's Insurance

[Tortoise]

I finally decided to get renter's insurance through USAA, the same company we have our auto insurance with. I was a little surprised to see that our monthly premium is going to be $33, even with the maximum deductible of $1000 and with the combined auto/renter's insurance discount. Based on a little research online, it sounded like almost everyone pays under $20. That's quite a difference in price!

Changing various parameters like the estimated value of our belongings, the liability coverage, the deductible, and whether there are/aren't sprinklers and an alarm system made little difference: The calculator always estimated the monthly premium to be in the neighborhood of $30.

My best guess is that it's because we live in the Los Angeles area. We're not at high risk for a fire since there's no dry vegetation anywhere nearby, we're not at high risk for a tsunami since we're more than a mile uphill from the ocean, we're not perched on the edge of a cliff or steep hill, and we're not at high risk of burglary since we live in a fairly decent neighborhood. We do have earthquakes here, but the really big ones that cause widespread damage are very infrequent.

My best guess is that the relatively high premium is due to the high risk of getting sued by Angelinos, who are notoriously litigious and are often awarded ridiculous amounts by Angelino juries. Any thoughts?

[Bob]

Tortoise,

I've been a USAA member since 1978.  Their car insurance is great and their customer service is great.  However, I think some of their other rates are high.  I was going to switch our homeowners insurance to USAA in order to consolidate all my policies with them.  I found, however, that they quoted about $200 a year more than my current policy -- so, I stayed with my current company for my homeowner's insurance.  I say all of this to recommend that perhaps you may want to shop around a little more and compare rates.  Now, if you ever have an issue or need to file a claim, USAA is hard to beat in terms of their customer service.  I have also talked to other long term USAA members who have said that USAA's rates are not as competitive as they used to be.  Just my two-cents worth. 

[flyingpylon]

Also, make sure you're comparing apples to apples.  For example, some policies will pay out the value of your items, while others will pay replacement value... could be a big difference there.

[Tortoise]

Thanks, Bob and flyingpylon.