Can You Cancel Your Renters Insurance to Save Money?
Is Canceling Renters Insurance Worth the Savings?
A renters insurance policy can adapt to a variety of circumstances. It can keep you covered while you are moving, living with a friend, traveling, or if you have items in storage. With so many uses for coverage, it can be confusing knowing whether you can cancel renter's insurance or if you should keep it. You might save money if you cancel renter's insurance, but are there risks to canceling your policy?
Advantages of Keeping Renters Insurance
Even during periods of transition, there are several advantages to keeping your renter's insurance policy. In addition to protection against theft or damage, here are other reasons not to cancel your coverage:
- Worldwide coverage for your personal liability, and for theft or damage to your personal property
- Additional living expenses if you are living somewhere other than your home because the property is being repaired or rebuilt due to a claim
- Multi-policy discount on insurance if you also have your car insured with the same company
Renters Insurance When You Move
Rather than canceling renters insurance when you move, add an endorsement for a change of address. This could save you money by avoiding the penalty for canceling your policy. Plus, it will provide insurance coverage for your personal things while you move from one place to another.
Renters insurance when you move is different from moving insurance. However, in most cases, it does still provide you with coverage for fire and theft. Contact your insurance company to find out what kind of solutions they can offer if you have an upcoming move planned.
Coverage for Items in Storage
Many people don't realize that renters insurance companies may be able to cover their items in storage. If you will be temporarily living somewhere else and want to store your things, you don't have to risk your furniture, collectibles, or other personal items. Each company will handle this differently, so find out what your policy covers before you decide to cancel it.
Renters Insurance When Traveling
Renters insurance may be able to cover your liability and your personal items while you travel, whether you keep your items in your home or put them in storage.
You may save money by canceling your renter's insurance, but be sure to ask about this option before you cancel. No matter how long you'll be away while traveling, you want to make sure your belongings are insured against theft or damage while you're gone.
What If You Live With Someone Else?
Should you cancel your renter's insurance when you move in with someone else? While you might think their policy will protect your belongings, not every company will.
Roommates might not be covered as "an insured" in a renters insurance policy. Be sure to check how you will be insured for your liability and personal belongings before you cancel a policy if you move in with friends. You might be better off changing the address on your policy to keep your coverage.
If you are getting married, you can add your new spouse to your policy rather than canceling it altogether. A change of address endorsement can insure your items if you move to a new location after marriage, too.
Tips When Moving Back in With Parents
If you are moving back in with your parents, you might be covered under their policy because you are a family member. Although canceling your renter's insurance might make sense in this instance, you may not be covered automatically based on your age and personal situation.
Ask your parents to contact their home insurance company and to have you covered specifically for personal contents and liability. This way you will maintain your insurance history to qualify for money-saving discounts when you get your own insurance again.
Canceling Renters Insurance When You Buy a House
If you buy a house, you no longer need renters insurance. Most companies that offer renters insurance also provide homeowner policies, so you don't need to start all over again with a new insurance company as a first-time homeowner. You may even get loyalty discounts or other advantages for having been previously insured if you stay with the same company.
How to Cancel a Renters Insurance Policy
Canceling your renter's insurance is fairly straightforward. If you decide you want to cancel your insurance, this is how to do it:
- Contact your insurance company and let them know you want to cancel your policy.
- Find out what the penalty will be to cancel the insurance. The penalty can vary based on how long the policy was active or how much time is left in the term.
- Provide the insurance company with a signed request to cancel the insurance. Ask if they have a specific form for you to sign or if you can send a letter requesting the cancelation.
- Give your insurance company accurate contact and mailing information so they can send you the cancellation documents and any refund you may be entitled to.
Renters insurance is a legal contract and may contain a clause that automatically renews your policy. Rather than assuming your coverage will cancel at the end of the term, call the insurance company directly. Ask about their cancellation policy and make sure you follow their procedure.
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 avoid consequences and make sure your policy is canceled the right way.