Find out what really determines your renters insurance price — and how that price is calculated.
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. In fact, the average cost of renters insurance in the U.S. is $188 a year, or just under $16 a month, per 2015 data from the Insurance Information Institute.
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:
Given that your neighborhood and building type can influence your premiums, it stands to reason the cost of renters insurance varies dramatically across state lines. Keep in mind, though, pricing gets more granular than that, and the cost of renters insurance can also vary dramatically across any given state.
With that caveat in mind, here are the average annual renters insurance premiums in each one as of 2014, per the National Association of Insurance Commissioners (NAIC):
|State||Avg Annual Premium||State||Avg Annual Premium||State||Avg Annual Premium||State||Avg Annual Premium|
|District of Columbia||$160||Massachusetts||$198||North Dakota||$114||Washington||$169|
The unifying theme here: Extreme weather. Mississippi, Texas, Louisiana and Alabama are coastal and susceptible to strong storms, while Oklahoma has a tornado problem.
Conversely, the states with the cheapest renters insurance are much more insulated from extreme weather and natural disasters. Is it worth moving to cut your renters insurance rates? We’re gonna go with … no. But 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, or just understand why cousin Beth in North Dakota is paying so much less to insure her apartment than you are.
Renters insurance provides protection for your belongings, plus some liability coverage for good measure. 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 leeway over the rates you’ll get. Find out how your choices can change your premiums.
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 protection, and a $500 deductible, though those numbers are just ballpark figures and your particular insurance company’s basic coverage may be different.
Some examples of what a basic renters insurance policy will cover:
Check out our deep dive on 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.
Learn more about how to buy cheap renters insurance online.
As you up the coverage limits of your renters policy, you also up 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 riders 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, a rider could make up the coverage difference.
Riders are also available to add to your policy that cover you and your belongings in more situations. For example, renters insurance policies don’t cover earthquakes, but you can purchase a rider so that you will be covered in the event of a seismic disaster.
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:
Some companies also offer discounts if you bundle your renters insurance plan with another 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.
Disclaimer: 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.