What is the cost of renters insurance?
Renters insurance policies cost between $120 to $190 per year in the United States. This is approximately $168 per annum or $14 per month. This is an estimate based on hypothetical renters aged 30 years old with $30,000 personal property coverage, $100,000 liability coverage, and a $500 deductable.
Here are some examples of the coverage that a basic renters policy will provide:
- Damage to your belongings by covered perils like fire, smoke, vandalism, short-circuits, and more.
- At least part of the replacement cost of a laptop that gets fried by a water damage from a burst pipe.
- If you are at fault for the injuries of your guests, renters insurance will pay for their medical bills.
- Protection for your personal property stolen while you are away from home.
- Your policy will pay extra living expenses if your apartment is uninhabitable by a covered event.
The national average is useful as a baseline. However, renters insurance rates will vary based on where you live or how much coverage you require.
The Key Takeaways
- Renters insurance is very affordable at an average $15 per month
- Renters insurance rates in states that are more susceptible to extreme weather are higher.
- You can get discount on renters insurance if you take safety precautions like adding a smoke alarm to your home or adding a deadbolt at your door.
- This insurance is affordable and protect you financially if you are renting an apartment, condo or home,.
- your credit score, your location, and the coverage amount determine the renters’ insurance costs.
- You can buy additional protection by purchasing riders or endorsements.
Which is the best renters insurance?
Renters insurance with the lowest coverage will be the cheapest. You can get renters insurance as low as $5 to $8 per month if you select low coverage amounts for personal property (say $10,000), personal liability ($100,000) and medical payments ($1,000) and you choose a high deductible ($500 to $2,500).
These are the five most expensive states for renters insurance:
- Louisiana: $262 per year, or $22 per month, on average.
- Georgia: $243 per year, or $20 per month, on average.
- Mississippi: $228 per year, or $19 per month, on average.
- Kansas: $225 per year, or $19 per month, on average.
- Alabama: $222 per year, or $19 per month, on average.
Meanwhile, these are the five cheapest states for renters insurance:
- Wyoming: $101 per year, or $8 per month, on average.
- Iowa and Vermont (tie): $110 per year, or $9 per month, on average.
- North Dakota and Pennsylvania (tie): $116 per year, or $10 per month, on average.
Among the 25 metropolitan cities in the country, Atlanta is the most expensive at $269 per annum (about $22 per monthly), while Columbus is the least affordable at $137 per month (about $11 per).
Four types of renters insurance policies coverage.
Personal property-This part of your policy will pay for the replacement cost of your belongings. This coverage comes in action if the personal property is lost, stolen, or damaged by windstorms. Your policy will specify the specific situations that are covered.
Liability-This policy covers legal expenses and lawsuit damages for incidents. For example; guest got injured at your house or your dog bit someone. Some insurers do not cover certain breeds of dog.
Payments for medical care-This coverage, which is often bundled with liability, is a little different. It will pay for guests’ injuries on your property and not require a lawsuit.
Additional living expenses-This coverage, also known as loss-of-use, pays out if your home is being repaired due to a covered disaster. It would, for example, cover your hotel and restaurant expenses while you wait to move back home.
What is the price of renters insurance?
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. There are a few factors that determine renters insurance rates. Some of these you can choose and some you cannot.
Each insurance company calculates renters insurance rates differently. However, these are the most common factors that can influence your premium.
The renters insurance rates vary by location (see table above). They can also vary within neighborhoods and between properties. Older buildings are more expensive, while more modern buildings can have lower premiums. Renters insurance will be more expensive if your home is located in an area that is susceptible to natural disasters such as tornadoes, wildfires, and hurricanes. If your area is prone to crime or you don’t have a nearby fire station or water hydrant, you may pay more for renters insurance.
How many things do you own
The more valuable your home inventory is, the more expensive it will be to insure. The real driver is value. While having more to insure costs more, it’s the total cost of your possessions that will drive the price. A studio filled with Eames furniture might be worth less than an Ikea-furnished two-bedroom.
Your current insurer may consider you a higher risk if you have filed claims within the last three to five year, even if you are with another company. This could increase your premium. An analysis revealed that having a claim on your records can increase your premium by more than 20%.
Renters insurance is one example of how your credit score can influence the rates you get. If you are having good credit it’s a sign that you are financially healthy and can help lower your premiums.
Renters insurance companies don’t check your FICO credit score, but in most states they do look at your credit-based insurance score, a similar measure, to evaluate your ability to pay your premiums. An analysis revealed that renters with bad credit pay twice as much as those who have good credit.
In Washington, California, Maryland, Massachusetts, and Washington, it is against the law to use credit to fix homeowners’, renters’, condo, or mobile home insurance rates.
Renters insurance usually covers liability for dog bites. However, having larger dogs or breeds that are considered aggressive could result in higher premiums.
Limits of coverage
Your policy cost will increase the more coverage you have. For example, a family that rents a three-bedroom home will pay more for their contents than someone who lives in a one-bedroom apartment in the same area.
You can lower your premium by choosing a higher deductible, the amount you pay toward a claim before your insurer covers the rest. If you have to cover the larger deductible in an emergency, then the premium difference does not seem to be significant.
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Cost factors that are in your hands
You can choose how much coverage you need:Higher coverage means more money. Your premiums will drop if you are willing to accept lower payouts in case of a claim. You can also save money upfront if you are willing to risk that your entire collection of vintage guitars is not covered. If you need greater coverage,you can expect higher premiums for more expensive items covered in additional endorsements.
What is your deductible- This is the sum you have to pay out of your pocket before your coverage kicks into effect. Your premium will be lower the higher your deductible.
What you would like to receive in the case of a claim— You will be paid the actual value of your belongings at the time you file a claim. This does not include the cost of replacing them or the price they were purchased.
The cost of replacing or repairing the item is covered at the time the claim was filed by the Replacement cost renters insurance . You will pay more for replacement cost renters insurance if you have to file a claim.
What is the cost of additional coverage?
Renters insurance doesn’t cover natural disasters. If you live in an area where there are floods or earthquakes you will need to add coverage to your policy. Your renters insurance premiums will rise if you increase the coverage limits. But remember, renters insurance is super affordable, so even huge leaps in coverage can result in just a few more dollars a month.
If you add the most common coverage amounts, such as $25,000 for personal property and $300,000 for your personal liability, or $2,000 for medical payment, your monthly premiums could still be below $20.
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 additional costs can be as little as a few dollars per month or even lower in certain cases.
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How do you get renters insurance discounts?
You can reduce your insurance rates by installing more safety and security measures in your home. Renters insurance companies often offer discounts for homeowners who have the following features:
- Fire/smoke alarms that sound in your home
- Alarms for central fire/smoke (alerts monitoring systems)
- Sprinklers with automatic controls
- Fire extinguisher
- Alarm system for burglary alarms at home
- Alarm system for central burglar alarm
- Deadbolt lock
Another huge way to save: increase your credit score. While this one is not easy, it can help you get renters insurance rates that are more affordable.
Multipolicy.You may be eligible for a discount if you purchase both renters insurance as well as another policy (such an auto insurance) from the same company.
Claim-free.Renters who have not filed any claims in the past three to five years are eligible for discounts. Depending on the company, “Recent” claims typically fall within the last three to five years.
Depending on the insurer you choose, you may also be able to save money by opting for paperless billing or autopay. You can also pay your policy in full, rather than in monthly installments, and refrain from smoking.
Shopping around is your best option. To ensure you get the best deal, we recommend getting quotes from at minimum three companies.