The average national cost for renters insurance is $182 a year for personal property coverage between $26,000 and $31,999, according to the 2020 home insurance report from the National Association of Insurance Commissioners (NAIC).
“Renters insurance is way cheaper than you think,” says Yael Wissner-Levy, a spokesperson for Lemonade Insurance. “Renters insurance is the best defense against things in life you have no control over—like your phone getting stolen on the subway or your apartment flooding because your neighbors left the faucet on.”
And renters insurance covers much more than theft and careless neighbors. It also covers your liability (such as an accidental injury if a guest falls in your apartment) and “additional living expenses” if you can’t live in your apartment due to a problem like a fire. Not bad for about $15 a month.
Factors in the Cost of Renters Insurance
Where you live
Your zip code plays a big role in determining renters insurance rates. If your area is prone to crime or natural disasters, you are more likely to make a renters insurance claim, which typically means higher rates.
Here’s a look at the average cost of renters insurance with personal property coverage between $26,000 and $31,999.
Average renters insurance costs
The amount of coverage
One of the biggest factors that will affect your renters insurance cost is how much coverage you select. Renters insurance can be broken down into three coverage types.
- Personal property coverage. This covers your stuff, from clothes to furniture, jewelry, pots and pans, and electronics. A good way to determine how much coverage you need is by creating a home inventory so that you have a good view of how much stuff you have. Your personal property coverage will ideally provide the amount needed to replace your stuff in a worst-case scenario like a fire that destroys the apartment.
- Liability insurance. This covers injuries and property damage to someone else that you’re responsible for. For example, if your dog bites someone you have legal liability. Liability insurance also pays for a legal defense if you are sued over an issue that your insurance covers. The default coverage might be $100,000, but you can buy more. Generally you want liability insurance in an amount that will cover what can be taken from you in a lawsuit.
- Additional living expenses. This coverage pays for expenses such as hotel bills, restaurant meals and other extra expenses (like laundry services or pet boarding) if you can’t live in your apartment due to a problem covered by the policy. Also known as “loss of use,” this coverage might be in a flat amount (such as $5,000) or a percentage of your personal property limit (such as 40%). If you need higher coverage, you can typically buy more.
The renters insurance deductible
An insurance deductible is the amount of money deducted from the insurance check if you file a claim. For example, if you have a $500 deductible and your claim is $5,000, you’ll get an insurance payment for $4,500.
Renters insurance deductibles commonly range from $250 to $2,000. The higher your deductible, the less you’ll pay in premiums. That’s because your insurance company will pay out less if you file a claim.
Your insurance claim history
A renters insurance company will take a look at your recent claims history when setting your rates. If you’ve filed claims in the past, expect higher premiums.
Credit-based insurance scores
Most insurance companies make a correlation between credit and the likelihood that people will make insurance claims. The higher your credit-based insurance score, the lower your chances are of filing a claim, which means lower rates.
Credit-based insurance scores are similar to other credit scores and look at:
- Past payment history
- Current levels of debt
- Length of credit history
- New credit/pursuit of new credit
- Types of credit used
More Renters Insurance Options
Here are more considerations when you’re buying renters insurance:
- Actual cash value (ACV) vs. replacement cost coverage. If your belongings are stolen or damaged, ACV coverage takes depreciation into account and will pay only the current value of the items. Replacement cost is a more expensive option but it will pay to replace your items with similar, new items.
- Scheduling valuable items. Certain groups of items have what are called “special limits” or “sub-limits” for what the insurance company will pay if they are stolen. For example, your policy might only pay $1,000 for all stolen jewelry. That won’t cover you if a thief swipes a $5,000 ring. You can “schedule” personal property for high-value items. It costs extra, but you’ll get paid what your item is worth if it’s stolen.
- Medical payments. This coverage pays smaller medical bills for guests who are injured while visiting you. Policy limits for medical payments might fall between $1,000 to $5,000 and it’s often used to cover minor injuries, without regard to who was at fault.
If You Own a Dog
Some renters insurance companies charge additional premiums if you own a dog, depending on the dog’s size and breed. The liability portion of your renters insurance covers dog-related injuries to others.
Certain types of dogs are excluded from coverage by some insurance companies, such as:
- Trained attack dogs
- Dogs with a history of biting
- Unneutered male dogs
Breeds such as doberman pinschers, pit bulls, rottweilers and wolf hybrids are also often among the dog breeds banned by home insurance companies. Not all insurers have lists of banned dog breeds.
Renters Insurance Discounts
You can shave some money off your renters insurance bill with discounts such as:
- Multi-policy discounts. Bundling insurance saves money when you buy two or more policies from the same company. You should be able to bundle your auto and renters insurance for a discount.
- Home safety discounts. If your home has devices such as deadbolt locks on exterior doors, smoke alarms, sprinklers or a security alarm, you may qualify for a discount.
- Payment discounts. You can typically earn small discounts for paying in full, enrolling in autopay and going paperless.
