You Won’t Believe How Cheap It Is to Buy Renters Insurance
Renters insurance isn’t required by law. Whether you need to purchase it depends on the requirements of your apartment complex or landlord.
But you can’t put a price tag on peace of mind. The good news is, on the wide-ranging insurance spectrum, renters insurance tends to be more affordable than others.
A lot of major insurance companies offer renters insurance. If you’re a renter, your auto or other X insurer might send you periodic reminders that they offer renters insurance too — and they may also offer you a discount to bundle it with other types of insurance on your plan.
Let’s take a look at renters insurance, what it covers, what it costs and other questions surrounding it.
What Does Renters Insurance Typically Cover?
First, let’s go over the basics.
Renters insurance covers the cost of replacing your personal items in certain situations, such as if they’re damaged by fire or vandalism, or stolen. Many policies DO NOT cover flooding — so keep that in mind if you live in a first-floor unit or low-level dwelling — but may offer flood insurance as supplemental coverage. (However, if an appliance like a dishwasher malfunctions and causes damage, you should be covered.)
Renters insurance also protects you if someone is injured on your property. In some cases, it may help with medical expenses and alternative housing costs if your apartment becomes uninhabitable due to a covered peril.
There are two primary types of renters insurance:
- Broad form: The most common type of renters insurance policy. Broad form protects your personal belongings against occurrences such as fire or theft. It usually covers damage from vandalism, smoke, lightning, explosions, vandalism and property-owned utilities that cause water damage, as well.
- Comprehensive Form: Provides coverage for a variety of events and may come with higher premiums. If you live in an area with extreme weather, for example, you’d look to purchase a comprehensive form policy that covers storm damage.
You can talk to an insurance agent or play around with an online calculator to figure out the right policy for you.
How Much Does Renters Insurance Cost?
Unfortunately, there’s no one-size-all answer to this question. (But you probably figured that, right?)
The good news is, it’s pretty cheap: usually between $15 and $20 a month. I live in Florida, and only pay $12 and change for my roughly 700-square-foot apartment.
Say you have a policy that covers $40,000 worth of personal property and has a $1,000 deductible and $100,000 of liability protection — according to an Insurance.com rate analysis, you’ll pay $197 a year, or roughly $17 a month.
There are generally three tiers of coverage: low, mid and high. Here are examples of how coverage would break down. (Reminder: The deductible is the amount you pay out of pocket before your insurance coverage kicks in.)
- If you’re a college student, you might go for a lower-end policy. For instance, $12,000 worth of personal property coverage, a $500 deductible and $100,000 for liability. You’d pay around $100 a year.
- A midrange policy typically offers $25,000 of coverage for personal belongings, a $500 deductible and $100,000 in liability protection. It should fulfill most people’s requirements and still costs less than $200 a year on average.
- Lastly, a higher-end policy with $100,000 in personal property coverage, a $500 deductible and $100,000 in liability could run you around $400 a year.
When you choose a policy, you’ll want to know what’s covered, the deductible and how much any additional coverage — also known as a rider or floater — might cost.
The Average Cost of Renters Insurance by State
The Insurance Information Institute (III) organized renters insurance data from the National Association of Insurance Commissioners (NAIC). The average premium is based on the HO-4 renters insurance policy — which covers the 16 named home insurance perils, a renter’s personal items and often provides liability insurance.
Here are the average premiums for each state for the year, using 2016 data:
- Alabama: $245
- Alaska: $148
- Arizona: $181
- Arkansas: $223
- California: $200
- Colorado: $156
- Connecticut: $196
- Delaware: $159
- Florida: $181
- Georgia: $230
- Hawaii: $154
- Idaho: $150
- Illinois: $167
- Indiana: $179
- Iowa: $141
- Kansas: $177
- Kentucky: $169
- Louisiana: $252
- Maine: $151
- Maryland: $161
- Massachusetts: $198
- Michigan: $197
- Minnesota: $142
- Mississippi: $275
- Missouri: $181
- Montana: $145
- Nebraska: $141
- Nevada: $182
- New Hampshire: $154
- New Jersey: $163
- New Mexico: $198
- New York: $198
- North Carolina: $157
- North Dakota: $113
- Ohio: $182
- Oklahoma: $247
- Oregon: $159
- Pennsylvania: $157
- Rhode Island: $180
- South Carolina: $188
- South Dakota: $114
- Tennessee: $207
- Texas: $241
- Utah: $141
- Vermont: $158
- Virginia: $151
- Washington: $157
- West Virginia: $196
- Wisconsin: $132
- Wyoming: $150
Residents in states like Louisiana (on the Gulf of Mexico, prone to hurricanes) pay an average of $252 a year, while an average renter in Pennsylvania will pay $157 a year.
We’ll get into costs more in the next section. But first: A 2018 Insurance Information Institute survey found that while 91% of homeowners had homeowners insurance, only 46% of renters had renters insurance. Even if you don’t own your home, it’s still important to protect the belongings that you own.
6 Factors That Affect the Cost of Renters Insurance
Renters insurance costs (and coverage) will vary by insurance company. Typically, your costs will be determined by things such as the value of your belongings and the location of your house or apartment.
Here are six factors that impact the cost of renters insurance:
- Location: Living in a low-crime area or one exposed to natural disasters can affect how much you pay each month.
- Amount of coverage: If you request more coverage, you’ll usually pay higher premiums.
- Deductibles: If you choose a low-deductible policy, you’ll pay more each month, and vice versa.
- Credit score: A high credit score can help you qualify for purchases and low interest rates — and be used as a determining factor for your monthly premiums.
- Previous claims history: Have a history of filing claims? You might pay more for a policy.
- Replacement cost value policy vs. actual cost value policy: The former will reimburse you for the amount you paid for the damaged property, while the latter will pay market value.
Many companies provide online calculators so you can see what the going rate is in your ZIP code. You can also seek out professional discounts (think: for members of our military or teachers), bundle policies with the same company or inquire about safety discounts to save money on your renters insurance policy.
3 Common Misconceptions About Renters Insurance
Let’s knock an easy one out of the way first:
1. MYTH: Renters insurance is too much money.
REALITY: It usually falls somewhere between $15 to $20 a month. Sometimes a little more, but sometimes a little less.
We’re not going to latte-shame you and tell you to give up your coffee habit to pay for it, but it’s something you should consider prioritizing as a renter.
2. MYTH: I can save money on renters insurance by splitting a plan with my roommate.
REALITY: First off, if you didn’t know, living in the same residence WON’T automatically cover another person on your policy unless they’re named on it or they’re your spouse (though you still want to check on the latter with your insurer).
Second, this is technically true — if, of course, your renters insurance policy covers roommates — but we wouldn’t recommend it. There are a number of reasons why you probably don’t want to share a policy with a roommate:
- The cost of your personal belongings could vary, thus affecting how much coverage you need.
- They may move out.
- And a big one: If a roomie on your policy causes significant damage and you file a claim, that record will follow both of you — and their mistake could potentially cost you down the road when you apply for other insurance policies.
While there are plenty of things you can do to split costs with a roommate, renters insurance is generally not recommended as one of them.
3. MYTH: I’m already covered since my landlord has insurance.
REALITY: Nope. Your landlord’s insurance doesn’t cover your personal belongings. Their coverage protects against damage to the building’s structure — not your everyday items in said structure.
And if you’re thinking you don’t have that much of value to bother covering, take a minute to look around. Are you reading this article on a laptop, tablet or $500 smartphone? While sitting on your couch, facing your flat screen mounted on the wall? Where your bedroom furniture and all your clothes occupy the room on the other side?
No more hypothetical questions. The point is, you most likely have a lot of stuff that would cost serious money to replace.
Is Renters Insurance Worth It?
For the amount of money it costs and protection it provides, we say yes.
Insurance helps you plan for what you can’t predict. For instance, if your apartment’s sprinkler system malfunctions and soaks your stuff, you’re covered under renters insurance. Sometimes it’s not just a matter of you being extra careful, and you should prepare for that.
Shop around, look for discounts and know that a little money now can protect you from a lot of hurt later.
Kathleen Garvin (@itskgarvin) is a writer and editor whose work has appeared in U.S. News, Clark.com and Well Kept Wallet.