Renters Insurance Cost

Are you paying too much for coverage?


Renters insurance is known to be the least-utilized insurance coverage available despite the fact that it is also one of the most affordable. 

If you are on a tight budget, you may find it difficult to justify spending money on a policy that is not required. However, it is a good idea to investigate how much renters insurance costs to see how sensible and low cost this protection can be.

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Renters Insurance Statistics

As you begin thinking about your renters policy and how much you’ll be spending on coverage, it might be helpful to consider some statistics.

  • In 2010, the average cost of a rental insurance policy in the US was $185 a year
  • Renter insurance costs are highest in Mississippi, Louisiana, and Oklahoma
  • The cost of rental insurance is lowest in North Dakota, South Dakota, and North Carolina

Regardless of where you live, your renters insurance policy and cost will be unique. An insurer will take into account your assets, your risk factors, and several other items when presenting you with a quote.


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Several Factors Affect How Much Renters Insurance Costs

Insurance companies’ rates and policies can differ significantly. When calculating your renters insurance price, insurance companies take several factors into account. These include, but are not limited to:

  • How much coverage you need
  • They type of coverage you choose
  • The amount of your deductible
  • The location of your rented home or apartment

These factors affect your insurance rates – but you won’t know exactly how much they will vary from a cost standpoint from company to company until you collect quotes.

How Much Renters Insurance Do You Need?

When you get a quote for a renters insurance policy, you will have to decide how much personal property coverage and liability coverage you need. You will also have to consider whether you want to purchase additional endorsements to cover specific items, such as high value jewelry or collections. 

Additional coverage will affect the cost of your policy, but renters insurance costs are still typically very reasonable even with full coverage.

There are several steps involved in deciding how much renters insurance you need.

  1. Decide how much coverage you need for your personal property. To determine this, assess your belongings including furniture, electronics, clothing, artwork, kitchenware and collectables. Note that if you experience a loss, your reimbursement costs cannot exceed the coverage amount you choose, so be sure to think this through. In the event that you were to lose everything, would your coverage be enough to allow you get back on your feet and start over?
  2. Choose the amount of liability coverage you want. Your liability insurance will provide coverage for medical bills if someone is injured on your property, as well as legal expenses if needed. Because the cost of a law suit and legal fees can exceed $1 million, many insurance professionals recommend purchasing more than the standard coverage. If your liability coverage limit is $100,000, you could end up paying the costs of damages and legal fees out of pocket. Even raising the limit to $300,000 can provide peace of mind. While raising your liability limit will increase your premium, it’s probably more affordable than you think.

Most insurance companies impose caps on how much coverage they will provide for various categories of personal belongings. 

If you have an extensive amount of electronic equipment, designer clothing or any other sort of expensive collectable, you may want to consider purchasing additional endorsements, or riders, to obtain full coverage for these things.

Actual-Value vs. Replacement Cost Coverage

Insurance companies typically offer the choice of actual value coverage or replacement cost coverage for your belongings. Actual value coverage covers the depreciated value of your belongings, whereas replacement cost coverage will provide you with enough to purchase a new replacement.

While replacement cost coverage does cost a bit more, you will most likely find it to be invaluable in the event of a burglary, fire or other incident when you need to replace the items lost. As you’re looking at renters insurance rates and quotes, keep these two types of coverage in mind.

Choosing the Right Deductible

Your deductible is the amount you will have to pay out of pocket before your insurance coverage kicks in. Having a very high deductible will significantly lower your insurance premium. Lower deductibles will result in more coverage but at a higher rate. Renters insurance deductibles can range from $50 to $1,500.

If you opt for a high deductible of $1,000 and your camera and iPad are stolen in a burglary, it will probably not be worthwhile to file a claim. However, if you have a low deductible of $250, filing a claim might make sense. As a renter, you need to find the right balance in choosing your deductibles and how that affects your premium.

For example, you may find that having a low cost policy with a high deductible makes the most sense for you and your risk tolerance, or you may decide that you would prefer to pay a slightly higher premium for the peace of mind that you won’t have to pay much out of pocket to recover from a loss.

Does the Location of Your Rental Home Affect Your Cost?

Areas that are prone to devastating natural disasters or that have high crime rates typically have higher rental insurance rates. Insurers will look at the crime rate and risk of disaster in the specific area, or ZIP code, where your rental home is located and use it to determine your insurance rates.

The highest average renters insurance rates in the country are in Mississippi, where residents pay an average insurance rate of $252 per year. 

Homes in this state are frequently damaged by hurricanes, tornadoes and severe thunderstorms. On the other hand, residents in North Dakota, a state that has a low crime rate and very little risk of natural disasters, pay an average of $115 a year.


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What Will a Policy Will Cost You?

Determining your cost for renters insurance on your own can be tricky. Many insurance websites will require you to enter a lot of personal data to get a quote, and it can be difficult to see how altering various options can affect your rate. Some sites will not provide you with a rate online, but instead will have a sales representative give you a call.

The easiest way to learn how much or how little renters insurance will cost you is to speak with an independent insurance agent. 

A member agent can help you assess your coverage needs and will compare renters insurance costs from several different insurance companies to find a policy priced at a competitive rate. 

Find your local independent agent today to get more information and an obligation-free quote for renters insurance.

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