There are more than 43 million households occupied by renters in the U.S., which accounts for 37% of all households. Out of those, only 40% of renters have renters insurance, but the number is growing. For a large amount of protection, renters insurance can be quite affordable on average. We studied the average cost of renters insurance across the nation and in each state to show what people typically pay.
Average Cost of Renters Insurance
The average cost of renters insurance is $187 per year in the U.S. This ranges depending on where you live; a typical renter can pay $118 to insure their rented apartment or house in South Dakota, but this figure would be $244 in Mississippi. The below table shows the average renters insurance rate by state, and the difference between the mean in each state compared to the nation.
|State||Monthly Renters Insurance Cost||Annual Renters Insurance Cost||% Change vs Avg|
Typical renters insurance rates are between $15 and $30 per month ($180 and $360 per year). That's just a ballpark number to give renters an estimate of the cost - your quotes will depend on a variety of factors including the location of the rental unit, your personal property coverage, the amount of liability protection, safety features such as burglar and fire alarms and any optional endorsements or floaters for personal property. Having an address near a flood area or in the middle of hurricane territory will drive the average cost up higher compared to other locations. If you or your apartment or house have a history of multiple claims, your insurance premiums will likely be higher. Increasing reimbursement levels for valuable jewelry or electronics will increase average rental insurance costs too.
While well below the average cost of homeowners insurance, costs have been relatively stagnant in recent years. Between 2010 and 2015, the mean cost of renters insurance increased 1.6%.
How Your Coverage Affects How Much Renters Insurance Costs
Outside of your location and insurance claims history, the main factor affecting how much rental insurance costs will be the coverage limits you select. Further, changing personal property limits will affect premiums much more than personal liability limits will. A typical renters insurance policy might cover theft and damage to your personal property up to $25,000 and personal liability insurance up to $100,000. However, these limits are generally customizable for your needs. Depending on your insurer, it may be possible to get limits of up to $1 million for both categories.
Changes in property coverage have a much larger effect on your premium than changes in liability coverage. For most renters, $100,000 in liability insurance coverage will probably be sufficient, but you can often raise your coverage to $300,000 with only a minimal increase in your annual premium. For example, we found that increasing your renters liability coverage from $100,000 to $300,000 increased average annual premiums by only 5% to 6%.
Below we've compiled a table showing how your annual premium might change based on different coverage options. The numbers represent the average price of renters insurance offered in New York City by major insurance companies using similar coverage and a standard $500 deductible.
|Personal Property Limit||Personal Liability Limit||Annual Renters Insurance Premium|
States With the Cheapest Average Renters Insurance Costs
The states with the lowest renters insurance rates on average are scattered across the U.S. but have something in common: none are subject to heavy or frequent natural disasters compared to the others. North Dakota, South Dakota, Wisconsin and Montana all receive their share of heavy snowfall in the winter, but hurricanes and earthquakes are comparatively rare. Like the others, North Carolina is not a victim of frequent earthquakes and its coastline is not typically as hard hit by hurricanes as states south of it. These factors contribute to lower than average rates for a year's worth of renters insurance.
States With the Most Expensive Average Renters Insurance Rates
The states with the most expensive renters insurance rates have a higher than average rate of natural disasters. Mississippi, Louisiana, Alabama and Texas all have coastlines in the Gulf of Mexico, where hurricanes are a recurring threat to residents and property. Oklahoma residents also live through extreme weather. It has more tornadoes per square mile than any other place in the U.S. and is affected by hail and severe thunderstorms every year. Because of the high amount of damages, the renters insurance quotes are typically higher on average compared to the rest of the nation. Below are the mean renters insurance premiums for these five states compared to the average in the U.S.
What is the Biggest Cause of Renters Insurance Claims?
Renters tend to file some types of insurance claims more than others. Below are a number of the most common claims that renters make. Unlike homeowners, which need to protect the residence itself, tenants are not responsible for damages done to their rental unit.
Burglary and theft account for many renters insurance claims, according to Esurance. Some tenants wrongfully assume they are less likely to be a victim of theft if they live in a smaller city, when in fact, the opposite is the case. Smaller cities outside major metropolitan areas have higher burglaries per capita (822 burglaries per 100,000 people) than in the biggest cities (727 per 100,000 people).
Renters insurance covers your personal property, even if it isn’t inside your rental unit. For example, if something is stolen out of your car or from your bag on the train, you could file a claim for it. In 2012, the number of reported thefts in public was nearly 6 times the number of home burglaries.
Items destroyed in fires often result is renters insurance claims and not just in dry climates. Based on 2012 data, the Midwest was the U.S. region with the highest fire loss per capita.
- Midwest: $46.70 lost per capita
- South: $34.60 lost per capita
- West: $36.90 lost per capita
- Northeast: $43.60 lost per capita
Over a three-year period (2010–2012) surveyed by the U.S. Consumer Product Safety Commission, an estimated annual average of 360,400 fires resulted in an average of 2,170 deaths, 12,720 injuries, and $6.49 billion in property loss. Cooking-related fires averaged an estimated 149,000 fires over the same period, or 41.3% of residential fires.
Accidents a tenant could be liable for also result in a lot of renters insurance claims. Injuries that occur inside of the home result in more than 21 million medical visits per year. Renters insurance will not cover expenses for injuries to tenants, but it might cover guests who trip or fall, dog bites and other occurrences a renter might be liable for.
Best Renters Insurance Companies
Like any insurance policy, determining which renters insurance is best requires some research. Every policy might not be exactly the same, so would-be policyholders should shop around, gather renters insurance quotes online and speak to local agents before choosing a policy. We’ve listed 10 of the largest and best-rated renters insurance companies below to help you start your search.
|Insurance Company||Customer Satisfaction||AM Best||S&P|