The Average Cost of Renters Insurance
Renters insurance is an affordable way to protect your belongings in the event of damage, theft, or another covered loss. The common cost of renters insurance is decided through an aggregate of a couple of elements—a few you could manage and others that you couldn’t. In order to find out how much you should pay for coverage, it’s important to first understand what goes into determining these rates. Some people might be surprised by the factors that impact them most.
What is the average monthly cost for renters insurance in the US?
You might be surprised to know that the average cost of renters insurance is just $18 per month nationally. That’s a little more than $200 a year for peace of mind in knowing your belongings are protected.
States with the highest cost of renters insurance:
- Michigan – Average monthly rate: $26
- Oklahoma – Average monthly rate: $26
- Florida – Average monthly rate: $27
- Georgia – Average monthly rate: $27
- Alabama – Average monthly rate: $29
- Mississippi – Average monthly rate: $31
- Louisiana – Average monthly rate: $34
States with the lowest cost of renters insurance:
- Maine – Average monthly rate: $12
- New Hampshire – Average monthly rate: $12
- South Dakota – Average monthly rate: $12
- Iowa – Average monthly rate: $13
- Washington – Average monthly rate: $13
- Wisconsin – Average monthly rate: $13
What factors determine the cost of renters insurance?
There are several factors that affect how much you pay for renters insurance.
The most important one is the coverage limit, or the maximum amount your insurer will pay to replace your belongings if they’re lost, stolen, or damaged. Higher limits will result in higher premiums, but it is important to choose limits that adequately protect your belongings.
Your deductible also plays a role. The deductible is the amount you will be responsible for paying out-of-pocket in the event of a claim. Higher deductibles will typically result in lower premiums, but it is important to choose a deductible that you can afford to pay if necessary.
So, if you have a $500 deductible and $1,000 in damages, you would only receive $500 from your insurer because you would be responsible for paying the first $500.
Other influencing factors include:
The size of your home
The size of your home is one of the primary factors that will determine the cost of your renters insurance. Larger homes will typically require more coverage and, as such, will be more expensive to insure.
The location of your home
The location of your home is also a significant factor in determining the cost of your renters insurance. Homes located in high-crime areas or areas prone to natural disasters will typically be more expensive to insure than those located in safer areas.
The value of your belongings
The value of your belongings is another important factor in determining the cost of your renters insurance. If you have expensive items, such as jewelry or electronics, you will likely need to purchase additional coverage to insure them properly.
The type of coverage you need
The type of coverage you need will also affect the cost of your renters insurance. Basic policies will typically be less expensive than those that provide comprehensive coverage.
Your claims history
Your claims history is another factor that insurers will consider when determining the cost of your policy. Those with a history of filing claims are considered to be higher-risk and, as such, will typically pay higher premiums than those who have not filed any claims.
Your credit score
Your credit score is also a factor that insurers may consider when determining the cost of your policy. Those with higher credit scores are considered to be lower-risk and, as such, may qualify for lower premiums.
The insurer you choose
The insurer you choose can also affect the cost of your renters insurance policy. Some insurers offer discounts for certain types of customers, so it pays to shop around and compare rates before purchasing a policy.
These resources are for informational purposes only and should not be construed as legal advice. Landlords and Tenants are encouraged to seek specific legal advice for any of the issues as found in this blog.