Cost & Coverage
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Once you purchase your renters insurance, you need to pay your premium to keep the coverage active
The price of your premium depends on a variety of factors, from what state you live in to your credit score, and more
Living somewhere more prone to extreme weather can lead to more expensive renters insurance premiums
You can pay your premium monthly, semi-annually, or annually
Once you purchase renters insurance, in order to keep the policy active you need to make regular payments to your insurance provider. These payments are called your insurance premiums. Depending on your coverage and your insurance company, you can pay your premium monthly, every six months, or you can pay it in total at the start of the policy.
Many companies will offer a discount if you sign up for an annual payment. That being said, most people pay monthly since renters insurance tends to be inexpensive, and because if you’re renting you may be likely to move more frequently. If you cancel your renters insurance after paying in full most companies will reimburse you, but this depends on your provider. You should ask your insurance provider what their reimbursement policy is before you purchase.
Unlike health insurance, which involves co-pays and out-of-pocket expenses, renters insurance is a bit more straightforward because you are dealing with two factors: premiums, which keep your policy active, and your deductible, which you may have to pay if you file a claim. But how your premiums are determined depends on a few different things.
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Insurance providers will assess various factors to determine your premium. Some of them are out of your control but some of them, like the amount of coverage you want, is up to you.
How much coverage you decide to sign up for is the biggest factor that impacts the price of your premium. Before choosing your coverage amount, you should take an inventory of all your belongings and calculate their total cost to see how much coverage you need to include in your policy.
If you want to insure expensive and valuable items like rare jewelry, you will need to set high coverage limits or add riders to your policy, which means a higher premium. A landlord might require you to get a minimum amount of renters insurance coverage, but ultimately it’s up to you which items you want to cover.
Below is an overview of the coverage most basic renters insurance policies include. You can set the limit of each type of coverage. The limits of your coverage will affect the cost of your premium.
Where you live helps insurance companies determine if you are more likely or less likely to file a claim. The more likely you are to have a covered loss, the more of a risk you are for the insurance company to cover.
Weather is a major factor when it comes to the price of renters insurance premiums. For example, if you live in Alabama, you are more at-risk for extreme weather, so your premium may be higher than if you lived in Wisconsin. Insurance providers will also factor in your city and even your ZIP code to determine if you are more or less likely to file a claim.
Your building unit and size are also a factor when it comes to the price of your premium. Older buildings tend to lead to a higher premium price. Newer buildings usually mean cheaper premiums because they are less risky than older ones—they tend to have more security and safety features as well. Insurance providers also look at the amount of units in your building and if there have been any previous claims filed there.
Your deductible is the amount of money you pay out-of-pocket for a claim before your coverage kicks in to cover the rest. For example, if you have a $500 deductible and there is a fire in your apartment, you will need to pay that $500 deductible first when you file a claim, and then your coverage will cover the rest of the damage, up to your coverage limits. The higher your deductible the lower your premium will be.
When you purchase renters insurance, you will have two payment options to choose from that will determine how you get paid if you file a claim. You can either be paid the actual cash value or replacement cost of a lost or damaged item. An actual cash value renters insurance policy will pay you the value of your belongings at the time of the claim, not the price you paid for them when you bought them nor the cost it’d pay to buy them again brand new.
Replacement cost renters insurance covers the cost of repairing or replacing the insured item with the same type or one of similar value. You have to decide between these two ways to be paid when you sign up for your policy. Replacement cost renters insurance pays out more in the event of a claim, but it also costs more.
You can lower your premiums by increasing safety and security features in your home. Many insurance companies will give you discounts for the following measures:
Basic renters insurance policies don’t fully cover big ticket items like precious jewelry or an extensive guitar collection. This means you will need to add extra coverage and riders to help protect some of the cost for these more expensive belongings.
You can add more personal liability coverage if you want to increase your level of protection for damage you’re responsible for, like property damage or another person’s injury. For example, if your dog bites someone, your liability coverage will help pay for their potential medical bills. Some insurance companies increase premiums based on dog breeds for this reason.
Insurance providers will check your credit history and debt before they calculate your premium price. If you have a satisfactory credit score, your premiums will likely be lower because you are a lower risk to insure as a client. If you have a history of making claims some companies may raise your premiums, but not always.
Get a renters insurance quote without the confusion.
The average renters insurance rates varies from state to state, but as of 2015, renters insurance ranged from a high of $262 a year in Mississippi to a low of $114 a year in North Dakota, according to a 2017 report by the National Association of Insurance Commissioners (NAIC)
|State||Avg Annual Premium|
|District of Columbia||$158|
As we mentioned, you can pay renters insurance annually or monthly. Here are both options broken down in greater detail:
The method by which you pay your premiums depends on your insurance provider, but most major providers accept bank transfers, credit cards, and authorized checks as payment methods.
Your insurance company is required to give you a 30-day grace period before canceling your policy. If you don’t pay the premiums you owe within that 30-day grace period then you lose coverage. If that happens, you will have a lapse in coverage.
You should definitely try to avoid this as much as possible. If you have a lapse in coverage, then none of your belongings will be protected and you no longer have any liability coverage (you might also be in violation of your lease if you landlord requires renters insurance).
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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