How Much Is Renters Insurance?
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The national average of renters insurance is $14 per month. Where you live, your coverage limits and your claim history will have an effect on how much you pay for coverage. Learn how you can lower your renters insurance costs as well as what you should look for when deciding on a policy.
What Factors Affect the Cost of a Renters Insurance Policy?
The cost of a renters insurance policy can vary depending on various factors, including your coverage limits, deductible and where you live. Here is a more detailed analysis of the factors that affect the cost of renters insurance:
- Coverage limits: The higher the coverage limit, the more expensive the policy will be. The coverage limit is the maximum amount that the policy will pay out in the event of a covered peril.
- Deductible: Choosing a higher deductible will result in lower monthly payments. Just be mindful that you will pay more out of pocket before your insurance coverage kicks in if you file a claim.
- Location: Living in an area that is vulnerable to crime and natural disasters can lead to higher insurance premiums.
- Previous claims: The more claims on your insurance record, the higher risk you are to renters insurance companies. Insurers increase rates as a result.
- Credit score: Some insurance companies use credit-based insurance scores when calculating premiums. Higher credit can correlate with cheaper renters insurance rates.
- Insurance company: Each company uses its own methodology for calculating rates. That’s why you might see one insurer offering a cheaper rate for the same level of coverage.
- Discounts: You may qualify for more discounts with one company versus another, potentially resulting in a lower rate.
- Pets: Dogs in particular are considered a potential risk due to the possibility of bites, especially if the dog is considered a high-risk breed like a mastiff or pitbull.
Average Cost of Renters Insurance by State
Renters insurance rates can range from $10 to $21 per month depending on your state, with the national average being $14. The most expensive states to rent are Louisiana ($21), Mississippi ($21) and Alabama ($19).
The below table provides a state-by-state breakdown (including the District of Columbia) of the average cost of renters insurance coverage based on data pulled from the National Association of Insurance Commissioners (NAIC).
|State||Average Monthly Rate||Average Yearly Rate|
|District of Columbia||$13||$159|
Which States Have the Most Affordable Renters Insurance?
North Dakota and South Dakota (both $10 per month) round out the top most affordable states for renters insurance based on the NAIC data.
Even so, nearly half of all U.S. states charge $13 or cheaper per month on average for renters insurance, which is only slightly above the cheapest pair of states.
How Much Renters Insurance Do I Need?
The typical tenant will want up to $30,000 of personal property coverage. Choosing the right coverage amount will depend on various factors but especially your area’s local perils and crime rates and the value of your personal belongings.
For example, if you’re renting in an area with a series of break-ins and vandalism, then you may want to bump up your coverage limits. On the other hand, some perils are not covered by a standard renters policy, like earthquakes and floods, so you will need to buy a standalone policy.
You will also want to take inventory of your personal belongings. This can include furniture, electronics, clothing, jewelry and other valuables. Tallying up the total value of your personal belongings can help you determine an appropriate coverage amount. If you own a lot of items and they’re high value, then you’ll likely want to buy more coverage.
What’s Included in Renters Insurance?
A standard renters insurance policy typically includes the following types of coverage if your losses were caused by a covered peril, like fire, burglary, vandalism or windstorm:
Covers your personal belongings like electronics, furniture and clothes
A vandal breaks into your unit and breaks your treasured Christmas Story leg lamp
Provides protection if you’re held legally responsible for another person’s injury or property damage
You spilled water on the floor and a guest suffers a slip-and-fall injury
Additional Living Expenses
Pays for temporary living expenses, such as hotel costs or meals, if your home is temporarily unlivable
The vandals that broke your leg lamp demolished the inside of your unit plus broke your front door and windows
Keep in mind that renters insurance will not cover the actual structure if it is damaged. That should be covered by your landlord's policy.
How To Find Cheap Renters Insurance
Here’s a step-by-step guide to help you get renters insurance when needed.
- Understand the type of coverage you need: This includes the amount of coverage that is sufficient for your situation before you start shopping. This can help you get accurate renters insurance quotes from different insurance companies.
- Contact multiple insurance companies: Request quotes for the coverage you need so you can compare pricing. Remember that while price is an important factor, choosing a reputable insurance company with good customer service and a strong financial rating is also important. Look for reviews and ratings online before making a decision.
- Ask about discounts: You may save money by installing a security camera in your unit, not smoking inside or bundling your renters and auto policy. Your insurer will inform you of other discounts that may be available.
- Check with your employer: You may also be able to get a discount through your employer or professional organization.
- Get coverage: Your premium will usually be paid every month, every six months or every year.
How to Lower Your Renters Insurance Cost
There are several ways to lower your renters insurance cost such as qualifying for discounts and adjusting your deductible:
- Increase your deductible
- Bundle your insurance policies to enjoy a bundling discount
- Ask about additional discounts like having a claims-free history
- Compare rates from multiple insurers (be sure to use an apples-to-apples comparison when it comes to coverage)
- Take steps to reduce risks such as installing smoke detectors or security systems which can lower your premium
- Review your coverage annually and make sure your policy reflects your needs and budget