While renters insurance might not seem like a needed expense, should your belongings be stolen or damaged, or someone gets injured at your place, it could help protect you financially. That’s because while your landlord will cover damage to the actual building, you’re responsible for other types of damage.
To see if renters insurance is an expense you can afford, we’ll go over how much renters insurance might cost, what factors come into play to determine the cost of a renters insurance policy, and how you might go about saving money on your coverage.
How Much Does a Renters Insurance Policy Cost?
The cost to get renters insurance varies, and different factors affect how much a monthly premium costs. The cost might also depend on which insurance carrier you choose.
For instance, based on our research, the median monthly cost of a renters insurance premium from Nationwide is $13.43, while if you purchase a policy from Farmers, the median cost is $21.64.
According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average cost of renters insurance premiums has gone down. In 2018, on average, the cost went down 0.6%, making it the fourth year in a row that the cost of renters insurance dropped.
Per NAIC data, the average annual premium of renters insurance in the U.S. in 2018 was $179. Breaking it down by state, it could cost anywhere from $126 in North Dakota to $252 in Mississippi.
As the cost can vary based on a variety of factors, it’s best to do your research and get some quotes online while comparison shopping. Comparing rates based on the same criteria can help you determine which policy and coverage from which insurance company is best for you.
For more information, see our guides to the Best Renters Insurance Companies of 2021 and Cheapest Renters Insurance Companies of 2021.
What Determines the Cost of a Renters Insurance Policy?
A handful of different variables impact how much you pay for renters insurance policy premiums:
Location. The cost of your renter’s insurance premium may partially hinge on where in the country you live. For example, according to data by the NAIC, the average monthly premium in Texas is $18.75, whereas, in Wisconsin, it’s $11.92.
Deductibles. The higher your deductibles, the lower your premiums tend to be. On the flip side, a lower deductible means you might be spending more each month on premiums. You’ll also probably want to consider whether you can afford a monthly premium, or if you need it to be lower. A deductible is the amount of money you give your insurance company, after filing a claim before your coverage kicks in. For example, if your home is robbed before the insurance company starts paying to replace your stolen belongings you will have to pay the deductible.
Riders. Also known as floaters or add-on insurance, the more riders you add to a standard renters insurance policy, the more expensive your premium will probably be. Riders are extra coverage that you can add to your policy. These could be anything from coverage for identity fraud to extra coverage for your more valuable belongings.
Total coverage. How much the total coverage on your insurance policy is will also determine its cost. The higher the coverage amounts, the more expensive your premium will most likely be.
How Can I Save Money On Renters Insurance?
If you’re trying to keep your costs down on renters insurance, there may be a handful of discounts that could shave off some dollars. The discounts available vary by carrier, so you’ll want to look at what discounts are available where you live.
Here are a few common ways you could potentially save money on renters insurance:
Security system discount. If you have a home security system installed in your place, because it could prevent burglary, you could potentially save some money on your renter’s insurance premium.
Using deadbolt locks. Along the same lines as installing a home security system or devices, having deadbolt locks in place can stave off would-be thieves and prevent a burglary from occurring in your home.
Smoke detectors discount. Having smoke detectors installed can help prevent a fire from getting out of hand and doing massive damage or destruction to your place.
Have strong credit. Introduced by the Fair Isaac Corporation (FICO) in the 1990s, a credit-based insurance score looks at different parts of your credit history to gauge how likely you are to claim a loss. This score is looked at during the underwriting process.
In short, the stronger your credit is, the more likely you’ll receive a lower insurance premium. Conversely, if you have a low credit score, there’s a chance that your premiums might be higher.
Stick with the same insurance company. If you’re a longstanding customer, your loyalty might be rewarded with a bit of a discount.
Multipolicy discount. Bundling two different types of insurance can help you save. This is different from adding a rider to your renter’s insurance.
Be claim-free. If you don’t file any claims for a certain length of time, you might be able to snag a discount. The duration you’ll need to be claim-free depends on the insurer.
Over 55 years. Many insurance companies offer renters insurance at a discount to those who are older. If you’re part of the 55 plus set, you could be eligible for a lower premium. How much of a discount depends on the insurance company.
Autopay discount. If you opt to make automatic payments on your insurance premium, you could receive a slightly discounted rate on your policy.
For more information, see our guide to the Cheapest Renters Insurance Companies.
How Can I Bundle Renters and Auto Insurance?
Insurance companies that offer both renters and auto insurance generally allow you to bundle the two. In fact, many insurers encourage you to do so and offer an incentive through a discount when bundling renters and auto insurance.
The bottom line is that you can save on the total cost of both renters and auto insurance.
When shopping for new auto insurance or renters insurance, see if a company offers both. Then check the website or speak to a representative to see if there is a possibility of getting a discount by bundling.
How Do I Buy Renters Insurance?
Depending on the insurance company, you can typically buy renters insurance by first getting a quote. Quotes can generally be obtained online or by speaking directly to an insurance agent.
Once you receive a quote for a policy, you have the choice of purchasing insurance. You can usually do so in several ways: applying online, or through an agent either over the phone or in person.
When applying or getting a quote. You’ll be asked for basic personal information, details about your abode, and the type of coverage you would like. While your credit is checked, it’s usually a soft pull on your file, so won’t impact your credit.
Renters Insurance FAQ
What Does Renters Insurance Cover?
A standard renters insurance policy covers damage or loss of your personal property from a covered peril. Covered perils usually include fire, theft, hail, windstorms, vandalism, and burglary.
In many cases, stolen items were located outside your home. Such as in the trunk of your car can be covered.
Besides personal property, personal liability is also usually covered. Should someone become injured at your place, renters insurance could kick in and cover medical and legal fees. Last, it can pay for additional living expenses (ALE) or loss of use. What this means is if your place is uninhabitable because of a covered peril, the cost of meals and accommodations while your home is being repaired can be paid for.
What Doesn’t Renter Insurance Cover?
Insurance doesn’t cover damage to the actual building – that’s the landlord’s responsibility. It also doesn’t cover damage or destruction from flooding, earthquakes, or mold. You can purchase separate insurance for floods and earthquakes.
What Is the Difference Between Renter and Homeowners Insurance?
A major difference between homeowners insurance and renter insurance is that homeowners insurance covers damage or destruction to the actual structure of your home. Renter insurance, on the other hand, does not. Another main difference is that if you have a mortgage on a home, you’re required to carry homeowners insurance. Renter insurance is usually optional.
Also, homeowners insurance provides coverage for your home that you own. Or have a mortgage on while renter insurance covers a home that you are renting.
How Do I File a Renters Insurance Claim?
You can usually file a renter insurance claim online. By reaching out to your insurer via phone, email, mail, or through your insurance agent. Many insurance companies also offer the option to file a claim through a mobile app or website. When doing so, you’ll want to have as much information about the incident, and supporting documentation and photos, as possible.
