How Much Is Renters Insurance?

Renters insurance costs just $18 per month on average, and it provides essential protection for your personal belongings, along with liability coverage to protect you from lawsuits. Renters insurance can even pay for you to stay in a hotel if your rental home is damaged. If your landlord doesn’t require you to have a renters insurance policy, buying one can shield your finances and provide peace of mind each month for less than the cost of ordering a pizza. We’ll cover the average cost of renters insurance in all 50 states, what determines your premium, how you can save, and how to choose the best insurance company. 

Average Cost of Renters Insurance

Renters insurance is inexpensive compared to homeowners insurance, which may cost thousands per year depending on where you live. The monthly average cost of renters insurance also varies by state. Here’s what you can expect in your neck of the woods.

*The average costs cited above are based on a standard policy with $30,000 in property coverage, $100,000 in liability coverage, $1,000 in guest medical protection, and a $500 deductible for a 25-year-old unmarried male without pets who lives alone and has no renters insurance claim history. 

Factors Influencing Cost

Several individual factors determine your premium for renters insurance. These include:

Your Building and Location

Renters insurance rates vary by state, and that’s because, in part, some states are more prone to weather events that may cause damage to apartment buildings. Premiums can also vary from one ZIP code to the next since higher crime rates in an area increase the risk of theft and vandalism. Renters insurance companies will also evaluate your building when setting your premiums and may charge more for a dilapidated property than a shiny new tower. 

Type of Coverage

When selecting a renters policy, you may have two choices for coverage for your personal belongings:

• Actual cash value: An actual cash value (ACV) policy only pays for the fair market value of each item after depreciation. For example, your 10-year-old television’s ACV may only be half what a similar new TV would cost. ACV policies cost less because the reimbursement amount for each item is lower. 
• Replacement cost: A replacement cost policy pays to replace your damaged or stolen item with a similar new item. These policies cost more, but you won’t have to spend as much out-of-pocket if you need to replace your belongings.

Coverage Limits

Premiums increase as coverage limits increase—that may tempt you to lower your coverages—but it’s important to buy enough coverage to protect any personal belongings you would want to replace after a loss. Take inventory of the items in your apartment and estimate their total value.

Deductible

Your deductible represents your share of the financial responsibility for a claim. Choosing a higher deductible may lower your premium because your insurance company’s payout will be less. For example, if it costs $5,000 to replace your damaged belongings after a fire and your deductible is $500, your insurance company will only reimburse you for $4,500.

Safety Features

When getting a renters insurance quote, insurance companies may ask about your rental property’s safety features, which could reduce your risk of loss. Living in a gated community or having a security system with video cameras can lower your rate since they reduce the risk of theft claims. Having smoke detectors or a sprinkler system may also lower your rate since they reduce the risk of fire damage in your building. 

Your Credit Score

Depending on where you live, your insurer may use your credit-based insurance score, which uses your credit score as part of an assessment of the risk to insure you. If you have poor credit, you might pay more for renters insurance because most insurers believe there’s a higher chance you’ll file a claim.

Top Renters Insurance Companies

• State Farm: State Farm offers up to 17% savings for bundling your renters insurance and car insurance, and it’s easy to get a quote and buy a policy online. You can get identity restoration and earthquake damage coverage as endorsements to your renters policy, too. State Farm has an A++ (Superior) financial strength rating from AM Best. However, the company is ranked below average for renters insurance by J.D. Power. 
• Assurant: Assurant offers a liability-only policy for budget-conscious renters and a full renters policy. The company offers a variety of add-ons, including pet damage coverage and rent protection, which can help you with your rent payments if you lose your job. Assurant holds an A (Excellent) financial strength rating from AM Best.
• Progressive: If you have an auto policy with Progressive, you can save an average of 3% by adding renters insurance. The company also offers discounts for advance quotes and full payment. You can add water backup and personal injury coverage to your renters policy as well. Progressive has an A+ (Superior) financial strength rating from AM Best but is ranked below average for renters insurance by J.D. Power. 
• Allstate: If you have an Allstate auto policy, you can add renters coverage for as little as $4 per month. Also, you can choose between an ACV or replacement cost policy. Allstate offers up to a 25% discount for renters aged 55 and older. The company has an A+ (Superior) financial strength rating from AM Best but is ranked slightly below average by J.D. Power for renters insurance. 
• Geico: Geico offers renters policies for as little as $12 per month and several discount opportunities. The company also provides excellent digital tools, like a mobile app with a personal property scanner to help inventory your items. Geico has an A++ (Superior) financial strength rating from AM Best. 
• Liberty Mutual: Liberty Mutual offers renters insurance starting at $5 per month in certain states, with discounts for bundling and purchasing online. Optional coverages include replacement cost, earthquake damage, and additional coverage for jewelry. Liberty Mutual has an A (Excellent) financial strength rating from AM Best, but the company is ranked below average by J.D. Power for renters insurance. 

Other Companies to Consider

• Lemonade
• Nationwide
  
• Erie Insurance
• The Hartford
• AAA

How to Save Money on Renters Insurance

• Compare quotes: The cheapest policy isn’t always the best policy, but some companies may offer you a lower rate than others for the same coverage. That’s why it’s important to shop around for auto insurance. Collect a handful of quotes and compare policies line by line. 
• Take advantage of discounts: Most renters insurance companies offer discounts. You can often save by bundling your renters insurance policy with your car insurance policy, and some companies may lower your rate for paying in full or receiving electronic documents. Being a member of certain groups can also earn you a discount—for example, Allstate offers a 25% discount to seniors. 
• Increase your deductible: Raising your deductible will lower your premium since you’ll be responsible for a greater share of the bill when you file a claim. 
• Choose lower coverage limits: You may choose policy limits that don’t fully cover all your personal belongings to save money, but it’s not ideal. Some companies also offer a liability-only policy, which will cost less and may fulfill your landlord’s requirements. Just remember with a liability-only policy, none of your personal belongings will be covered from damage or theft.
• Consider an actual cash value policy: Another way to reduce your cost is to choose ACV over replacement cost. This strategy is similar to lowering your coverage limits—your insurance company’s payout may not cover the cost of replacing your belongings, but you’ll at least get some money toward buying replacement items. 
• Install safety features: Ask your landlord if you can install security features, like a deadbolt or doorbell camera, and safety features like smoke detectors. These precautions might earn you a discount. 
• Improve your credit: Work on paying down debt and making your payments on time. This will improve your credit-based insurance score, which may impact your rate. Get new quotes from a few companies once your credit improves. 

How to Choose the Best Renters Insurance

Decide How Much Coverage You Need

Create an inventory of your furniture, electronics, clothing, jewelry, art, bedding, home goods, appliances, and sports equipment. You can use a spreadsheet or a mobile app. Attach pictures and receipts if you can, or take a video walkthrough of your rental home—this will likely make for a smoother claims process. Add up the total for the items you would want to replace in the event of a loss. 

In general, $100,000 is a common base amount of liability coverage. And if you don’t have family or a friend you can stay with if your apartment is damaged, you’ll want to make sure you get robust additional living expenses coverage. 

Collect Renters Insurance Quotes

If you’re not sure where to shop for renters insurance, your current auto insurance provider is a great place to start. See if it offers renters insurance, and get a quote, but don’t stop there. Collect quotes from other companies, such as the insurers mentioned in this guide. Narrow down your options to a few insurers that can provide the coverage you need at a price you’re comfortable with. Factor in any discounts you’re eligible for. You may find cheap renters insurance for as little as $5 per month. 

Compare Third-Party Ratings

Before choosing a renters insurance provider, check the company’s ratings with AM Best and J.D. Power. You can also look up the company’s complaint index with the NAIC, and search for customer service reviews on customer-review websites. 

Understand the Coverage Type 

Make sure you understand the difference between actual cash value and replacement cost policies. If you want to replace your belongings with new items and not spend a lot, you should opt for a replacement cost policy.

Fill in Coverage Gaps With Riders

Pay attention to the exclusions in your policy and decide if you need to purchase extra coverage. For example, most policies exclude earthquake and property damage from pets, but some companies offer endorsements that cover these losses. Most policies also have sub-limits for certain items like musical instruments or fine jewelry, so you may need to purchase a separate policy for an expensive guitar or engagement ring. 

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