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How Much Does Renters Insurance Cost?

By August 30, 2021August 22nd, 2022No Comments

By Dannie Phan

Your landlord’s home insurance policy won’t cover your belongings if an accident happens. Was there a fire at your rented apartment? Unless you’re insured, you will have to replace everything all on your own.

That is why it’s always a good idea to get a renters insurance policy. The average renters insurance cost is relatively low and the payouts fairly high. Do you know what these plans cover, or how to pick the right one for you?

How Much Does Renters Insurance Cost?

The national average cost of renters insurance is $168 per year—or $14 per month. But that may not be how much your renters insurance policy will cost. It will all depend on these factors:

  1. Where you live. Competition among insurance companies makes a big difference in renter insurance rates.
  2. How risky your living situation is. New apartments outside of major natural disaster zones are cheaper to insure.
  3. Your credit history. The higher your credit score the better.
  4. If you’ve ever filed a claim. If you have past claims, your monthly premium will be higher.
  5. Your deductible. A high deductible means lower monthly premiums.
  6. What your policy covers. Having a lot of expensive belongings costs more money to ensure.
  7. Any add-ons you’ve contracted. A more complete insurance policy ends up being more expensive.

Comparing Renters Insurance Prices By City

Do you know how much is renters insurance in your city? We’re breaking down the annual cost of renters insurance in some of the biggest American cities:

  • Atlanta: $269
  • Austin: $172
  • Chicago: $215
  • Denver: $171
  • Las Vegas: $174
  • Los Angeles: $256
  • Louisville: $176
  • New York City: $174
  • Philadelphia: $179
  • Seattle: $144

What Does Renters Insurance Cover?

Your average renters insurance policy will cover three things:

  1. Personal property coverage: The insurance company will reimburse you for your damaged possessions.
  2. Liability coverage (and medical payments): These two often go together and make it so that your insurer pays for any injuries (for example, a dog bite) a guest or stranger at your place has suffered.
  3. Extra living expenses: If you need to relocate quickly because of an accident at your place (such as a flood or fire), the renters insurance company will pay for your living expenses until everything is fixed.

Of course, there are more things you can add to your policy, but those will raise the cost of your insurance. 

What to Look for When Buying Renters Insurance?

Because there are so many renters insurance policies out there, choosing the best one for you can seem intimidating. These are the boxes the right plan for you will have to check off.

Affordable Monthly Payment

How much can you afford to pay per month for your renters insurance? Make sure to stick to your budget, so you don’t default.

Doable Deductible

A deductible is the amount you pay out-of-pocket before the insurer starts paying you. It’s advised that you pick a plan with a deductible you can comfortably afford.

While you can lower your premium if you get a higher deductible, that’s not always a good idea. For example, if you can’t afford a $1,000 deductible when disaster strikes, what good is it to have insurance at all?

Enough Coverage

Every policy has insurance coverage limits. Often, the personal property coverage is between $20,000 and $35,000. If the belongings at your apartment cost more than the coverage limit, you won’t get refunded for everything.

Jewelry, expensive tech equipment, and high-value designer goods can quickly get you over the coverage limits. If that’s your case, be sure to buy a policy with a higher cap.

Ideal Payout System

Generally, you can choose between Replacement Cost Value (RCV) policies and Actual Cash Value (ACV) policies. The former will pay you to replace your items, based on how much they cost when you file your claims. The latter would give you the same amount of cash you paid for your items when you bought them.

Which one you choose depends entirely on you, but do keep in mind that RCV policies come at a higher monthly premium.

How to Save Money on Renters Insurance

Let’s quickly look at some of the ways you can lower the cost of renters insurance, regardless of your ZIP code.

1. Bundle Insurance Policies with Your Provider

Insurers are often open to bundling several policies for their clients—and you might get a lower renters insurance quote this way. If you already have auto insurance, for example, ask that company about their renters insurance plans.

2. Show a Sound Credit Score

Having a healthy credit history is one of the best ways to save money on insurance. If you tend to pay your bills on time and don’t have much debt to your name, renters insurance companies are more likely to give you a discount.

3. Install Home Security Devices

Installing home protection devices (such as alarm systems and security cameras) can lower the cost of your renters insurance premiums. Your insurer might reward you for these diligent efforts.

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