Should You Cancel Your Renters Insurance to Save Money?

Woman saving money

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Looking to save money by canceling your renter's insurance? Renters insurance can adapt to a variety of circumstances and keep you covered while you are in transition, moving, if you have items in storage, living with a friend or if you are traveling. It can be confusing to know if you should cancel your renter's insurance or not. Here's how to know when to keep your renter's policy or when you should cancel your renter's insurance to save money and how to do it.

Some Reasons People Cancel Renter's Insurance

  1. Moving in with someone else and don't think they need renters insurance anymore
  2. Trying to cut costs in general
  3. Moving from one place to another or traveling, and may think they don't need the insurance for a brief time, or think they will just get a new policy later.

Advantages of Keeping Renters Insurance

  • If you already have renter's insurance, you've been benefiting from having coverage for your personal liability worldwide, and for theft or damage to your personal property.
  • Renters insurance also provides you with additional living expenses if you are living somewhere and due to a claim, you can't live there while the property is being repaired or rebuilt.
  • If you have your home and car insured with the same company, you often get a discount for having the two together.

How to Handle Renter's Insurance When You Move

You don't have to cancel renters insurance when you move, you can do an endorsement for a change of address. This will avoid paying a penalty for canceling your policy and will also provide the advantage of covering your personal things while you move from one place to another. It's not moving insurance, but in most cases, it does still provide you with the coverage for fire and theft. Contact your insurance company to find out what kind of solutions they can offer you.

Renter's Insurance Coverage for Items in Storage

Another advantage of renters insurance many people don't realize is that if they will be temporarily living somewhere else or traveling and they have items in storage for a brief period, your renter's insurance company may be able to cover your items in storage. Each company will handle this differently, find out what they can do for you before you decide to cancel a policy.

Renter's Insurance When Traveling

If you will be traveling, renters insurance may be able to cover your liability and your personal items while you travel. Be sure and ask about this option before canceling.

Canceling Renters Insurance When You Move in With Someone

Do you need to cancel your renter's insurance when you move in with someone? Before you cancel your policy you need to find out if their policy will cover you.

If you are getting married, then it is possible to add your new spouse to your policy, you do not need to cancel your policy, you can just add your spouse and do a change of address endorsement for your new location.

In the definition of insured, people like roommates are not covered in an insurance policy, so if you are moving in with friends, then be sure and check how you will be insured for your liability and personal belongings before you cancel a policy. You might be better off just changing the address on your policy to keep your coverage.

Tips When Moving Back in With Parents

If you are moving back in with your parents, you are a family member, so this may be a circumstance where canceling your renter's insurance makes sense. Based on your age and personal situation you may not be covered automatically. Have your parents contact their home insurance company and ask to have you covered specifically for personal contents, and for liability. The advantage of doing this is that it will allow you to maintain your insurance history so that when you do go get insurance again, you could be eligible for discounts that could save you money.

Canceling Renters Insurance When You Buy a House

If you buy a house, your renter insurance company can probably insure your house on a homeowner policy, so as a first-time homeowner, you don't need to start all over again with a new insurance company. You may even get loyalty discounts or other advantages for having been previously insured.

How to Cancel a Renter's Insurance Policy

Canceling your renter's insurance is fairly straightforward. If you decide you want to cancel your insurance, this is how:

  1. Contact your insurance company and let them know you want to cancel your policy
  2. Find out what the penalty will be to cancel the insurance. Usually, the penalty varies depending on how long the policy was active or how long is left in the term.
  3. Provide the insurance company with a signed request to cancel the insurance. They might have a specific form for you to sign.
  4. Give your insurance company accurate contact and mailing information so they can send cancellation documents and any refund you may be entitled to.

    If You Need to Contact Your Insurance Company to Cancel a Renter's Policy on Renewal

    Insurance is a legal contract and depending on the terms and conditions with your insurance company, there may be a clause that automatically renews the insurance. The best way to cancel an insurance policy is to speak to the insurance company and make sure you have followed their procedure to cancel. If you do not, your policy may be canceled for non payment and this can have a negative impact on your insurance credit score. It is always best to speak with the insurance company to make sure your policy is canceled the right way.