Average Renters Insurance Costs

People who are renting homes, apartments or condos should consider purchasing renters insurance to protect their personal belongings. Renters insurance is a policy that covers the cost of replacing or repairing personal property if it is damaged or stolen. The cost of renters insurance varies depending on several factors, such as location, coverage amount, and the insurance company. This article will provide an overview of the average renters insurance costs and factors that affect the cost.

What Is Renters Insurance and What Does It Cover?

Renters insurance is a type of insurance that provides coverage for personal property, liability, and additional living expenses in the event of damage or loss. Personal property coverage includes items like furniture, electronics, and clothing. Liability coverage protects renters in the event that they are found responsible for causing damage to someone else’s property or if someone is injured on their rental property. Additional living expenses coverage pays for temporary housing and other expenses if the renters are unable to live in their rental property due to damage or loss.

What Is the Average Cost of Renters Insurance?

The average cost of renters insurance varies depending on several factors, including the location of the rental property, coverage amount, and deductible. According to a study by the National Association of Insurance Commissioners (NAIC), the average cost of renters insurance in the United States is $180 per year, or about $15 per month. However, renters in certain states pay more or less than the national average due to factors like weather-related risks, crime rates, and overall cost of living.

Renters Insurance Cost by State

Renters Insurance Cost by Coverage Amount

The amount of coverage that is needed for renters insurance can vary depending on the value of the personal property. A higher coverage amount will result in a higher premium. The following table shows the average cost of renters insurance based on the coverage amount:

Renters Insurance Cost by Deductible

The deductible is the amount that must be paid out of pocket before the insurance coverage kicks in. A higher deductible will result in a lower premium, but renters should consider their ability to pay the deductible if they need to file a claim. The following table shows the average cost of renters insurance based on the deductible amount:

What Factors Affect Renters Insurance Costs?

The cost of renters insurance can vary depending on several factors, including the location of the rental property, the amount of coverage, the deductible, and the insurance company. The following factors can also affect renters insurance costs:

Type of Coverage

Renters can choose from different types of coverage, such as actual cash value (ACV) and replacement cost value (RCV). ACV coverage pays for the value of the personal property at the time of loss, while RCV coverage pays for the cost of replacing the personal property with a similar item. RCV coverage is more expensive than ACV coverage, but it provides more comprehensive coverage.

Security Features

Renters who have security features in their rental property, such as deadbolt locks or an alarm system, may be eligible for discounts on their renters insurance premiums. These security features can reduce the likelihood of theft or damage and lower the risk for the insurance company.

Credit Score

Insurance companies may consider a renter’s credit score when determining the cost of renters insurance. Renters with higher credit scores may be eligible for lower premiums because they are seen as less of a risk to the insurance company.

Claims History

Renters who have a history of filing insurance claims may be considered a higher risk by insurance companies and may be charged higher premiums as a result. Renters who have not filed claims in the past may be eligible for lower premiums.

Frequently Asked Questions (FAQs)

What is not covered under renters insurance?

Renters insurance typically does not cover damage or loss caused by natural disasters like earthquakes or floods. It also does not cover intentional damage caused by the renter or damage caused by pests like rats or bed bugs.

Do I need renters insurance?

Renters insurance is not required by law, but it is a wise investment for renters who want to protect their personal belongings and have financial security in the event of damage or loss.

How much renters insurance should I have?

The amount of renters insurance needed depends on the value of the renter’s personal property. Renters should consider the cost of replacing their personal belongings and choose a coverage amount that is suitable for their needs.

Can I get renters insurance if I have bad credit?

It is possible to get renters insurance with bad credit, but renters may be charged higher premiums as a result. Some insurance companies may also require renters with bad credit to pay their premiums upfront.

How can I save money on renters insurance?

Renters can save money on renters insurance by choosing a higher deductible, bundling their renters insurance with other insurance policies like car insurance, and taking advantage of discounts offered by the insurance company.

Conclusion

Renters insurance is a necessary investment for renters who want to protect their personal belongings and have financial security in the event of damage or loss. The cost of renters insurance varies depending on several factors, including the location of the rental property, the amount of coverage, and the deductible. Renters should consider these factors and shop around for the best renters insurance policy that meets their needs and budget.