Renters insurance is extremely affordable, costing an average of $15 a month
States that suffer frequent extreme weather tend to have higher renters insurance rates
How much coverage you buy, the type of building you live in, and your ZIP code all factor into the price of your renters insurance premium
You can get discounts on renters insurance by taking safety precautions, like installing a smoke alarm or adding a deadbolt to your door
Renters insurance is a relatively cheap type of insurance policy. It protects your personal property in the event of damage or theft, your personal liability, and any additional living expenses that accrue while you’re displaced from your home.
And if the thought of another $100-plus monthly expense is keeping you from buying renters insurance, you should know a renters insurance policy isn’t likely to cost nearly that much. Renters insurance is significantly cheaper than other types of property insurance, like car insurance or homeowners insurance, or insurance products like life insurance.
The average cost of renters insurance in the U.S. was $180 a year, or just about $15 a month, in 2017 per data from a 2019 report by the National Association of Insurance Commissioners (NAIC), ranging from a high of $258 to a low of $120. The cost of your renters premium depends on a few things, but a main factor is how much liability coverage and personal property coverage you buy.
Now that you know that the cost of renters insurance is closer to a car wash than a car payment, read on to learn more about how that number is determined:
In this article:
Given that your neighborhood and building type can influence your premiums, it stands to reason the cost of your insurance policy varies dramatically across state lines. Keep in mind, though, pricing gets more granular than that, and the cost of an insurance policy can also vary dramatically across any given state, depending your insurance company and what they offer. The cost of your premiums will also vary depending on how much coverage you purchase, and the price of your deductible.
With that caveat in mind, here are the average annual renters insurance premiums in each U.S. state as of 2017, per the NAIC:
|State||Avg Annual Premium|
|District of Columbia||$158|
The unifying theme here: Extreme weather. Mississippi, Texas, Louisiana and Alabama are coastal and susceptible to strong storms, while Oklahoma frequently experiences tornados. Insurance companies will determine these states to be higher-risk, meaning people living there are more likely to file a claim.
Conversely, the states with the cheapest renters insurance are much more insulated from extreme weather and natural disasters. It's good to know about state-by-state disparities if you’re planning a move so you can account for the cost difference in your budget.
Renters insurance provides protection for your belongings, plus liability coverage and loss-of-use coverage, in case your home becomes uninhabitable and you need to temporarily stay in a hotel. Renters insurance rates are determined by a few factors, some of which you can choose, and some of which you can’t.
Since your circumstances are generally set, it’s your choices about coverage that allow you to have some control over the rates you’ll get.
The average renters insurance policy costs between $120 and $190 a year. These basic policies generally offer $25,000 personal property coverage, $100,000 liability coverage, loss-of-use coverage and a $500 deductible, though those numbers are just ballpark figures and your particular insurance policy’s basic coverage may be different.
Some examples of what a basic renters insurance policy will cover:
Read to learn more what renters insurance does and doesn’t cover.
The cheapest renters insurance will have the least amount of coverage. If you opt for low coverage amounts for personal property (say, $10,000), personal liability ($100,000), and medical payments to others ($1,000) and you choose a high deductible ($500 to $2,500), you can conceivably get renters insurance for as little as $5 to $8 a month. You can compare quotes online when shopping for the most affordable renters insurance.
Renters insurance does not cover natural disasters, so if you live in an area that experiences things like floods or earthquakes, you will need to add additional coverage to your policy to cover those perils. As you raise the coverage limits of your renters policy, you also raise your premiums. But remember, renters insurance is super affordable, so even huge leaps in coverage can result in just a few more dollars a month.
For example, if you increase to the most common coverage amounts — $25,000 for personal property, $300,000 for personal liability, and $2,000 for medical payments to others — your premiums can still often be under $20 per month.
You can also purchase endorsements to increase your coverage for specific belongings, so if a basic policy only covers $1,000 worth of jewelry but you have a $5,000 ring, an endorsement could make up the coverage difference.
These additions can be as low as a few more dollars a month, or in some cases, even less than that.
Read more about popular renters insurance riders, floaters, and endorsements.
You can lower your insurance rate by increasing the number of safety and security features in your home. Many renters insurance companies offer discounts if you have one or more of the following features in your home:
An insurance company may also offer discounts if you bundle your renters insurance plan with another insurance plan, like auto insurance, or if you pay your annual premium at once instead of monthly.
Another huge way to save: increase your credit score. This one takes time, but as your score gets higher, you can get better renters insurance rates.
About the authors
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.
Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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