Only 40% of renters have renters insurance coverage, but that doesn't mean you should pass on getting a policy for yourself. Renters insurance is a cost-effective way to protect your belongings against theft, accidental damage and more.
To start, we take a look at renters insurance rates in different states. Then we'll go over the factors that can affect the cost of your coverage. Finally, we show you how to apply that information to choose a renters insurance policy that's both affordable and effective.
Average renters insurance rates by state
Nationally, the average cost of renters insurance is $187, but the rates you see may be different based on where you live. That's because the likelihood of perils such as fire, storms and theft changes from place to place. To understand these differences, we gathered data on the average cost for renters insurance in each state.
|Rank||State||Annual average||Monthly cost|
The data shows that renters insurance rates range between $10 and $20 per month (that's $120 to $240 per year). Depending on your state, the cost of an average policy could be twice what you would pay for the same coverage elsewhere. This led us to take a closer look at the states where renters see unusually high or low costs for insurance.
Renters in Southern states see higher rates
The average cost of renters insurance was highest in Mississippi, closely followed by Louisiana and Alabama. In all three states, the annual premium came out to at least $239 — roughly $20 per month of coverage. Oklahoma and Texas rounded out the top five.
While that's still less than what homeowners have to pay for home insurance, it can be a significant cost for many renters. Rates may run higher in these states because of their greater exposure to risk factors such as hurricanes. Another cause of higher renters insurance costs could be the average age or condition of the buildings that renters live in.
Western states experience the lowest premiums
On the other end of the cost spectrum, renters in North Dakota and South Dakota paid an average of around $115 a year, or less than $10 per month. These states are located far inland and experience fewer natural disasters of the kind that drive insurance rates higher along the coast.
Wisconsin, North Carolina and Utah also reported some of the lowest average rates for renters insurance. North Carolina is an interesting anomaly: It sees its fair share of severe hurricanes, but the state's renters insurance rates were among the nation's lowest.
Compare renters insurance estimates near you
What factors affect the cost of renters insurance?
We've seen how location and the likelihood of natural disasters can affect renters insurance costs, but individual variables also play a part. These include a number of factors that you can control as a renter:
We'll go through these one-by-one to understand what they mean for your renters insurance quote.
Claims and credit history
Insurers generally consider people with a history of claims to be more likely to make future claims as well. For example, let's say you happened to make several insurance claims in the year before applying to get a new renters insurance policy. That record may be taken as a sign that you're more likely to file claims in the future — leading to a higher monthly premium.
Home and renters insurance claims can stay on your insurance record for five to seven years.
Not all claims are treated equally. The consequences to your future costs may depend on the circumstances and amount of your prior claim. Large claim amounts and liability claims are the most likely to bump your premium higher.
Insurers may also look at your credit history when providing you with a renters insurance quote. Statistically, insurance companies have found that policyholders with lower credit scores tend to file claims more frequently than those with high credit scores. This makes it more expensive to buy insurance with bad credit, no matter how careful you are.
The amount of coverage you get will directly affect your renters insurance costs. Most of the default policies we've looked at include personal property coverage up to $25,000 and personal liability insurance up to $100,000. If you're willing to pay more, you can increase these numbers to fit your own needs.
Dollar for dollar, expanding your personal property coverage costs much more than raising your liability limits. We found that increasing renters liability coverage from $100,000 to $300,000 raises annual premiums by 5% to 6%. Applied to the national average, that's no more than an extra $12 a year.
|Personal property limit||Personal liability limit||Annual renters insurance premium|
In contrast, we found that raising property coverage limits inflated renters insurance premiums by 20% to 80%. The table above shows how your annual premium changes based on different combinations of property and liability coverage. 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.
Your renters insurance deductible is the amount you're responsible for paying before you get compensation in a claim. A typical renters insurance deductible is $500 or $1,000, but you can adjust the deductible on your policy to suit your needs.
Choosing a higher deductible means you'll be responsible for a larger share of the costs if you ever make a claim, but it also means you'll pay lower rates. Lower deductibles mean better protection but at a higher monthly cost.
In most renters insurance policies, high-value items like jewelry or art are excluded from coverage or covered up to lower, category-specific limits. Endorsements are extensions of your renters policy that you can buy to add or increase coverage for such items.
Purchasing an endorsement will increase the cost of your renters insurance policy, but that coverage might be necessary if your most valuable belongings fall outside the protection of standard insurance. Make sure to review what limits and coverages you're buying into before you sign up with an insurer.
How to save using discounts and deductibles
So far we've found out how much a typical renters insurance policy costs and what factors affect that cost. Here's how you can save money on renters insurance by seeking out specific discounts and adjusting your deductible.
Obtain all the discounts you qualify for
If you can prove you're a lower-risk customer you'll often pay lower rates, so if you're a tenant with fire alarms, burglar alarms, deadlocks or other safety features, you may be entitled to a discount from your insurer.
Spend some time going through the application and making sure that you've checked off all the discounts that you qualify for. If you own a vehicle, consider getting your auto insurance and renters insurance from the same company for a bundle discount.
Choose a lower deductible
As we've discussed earlier, selecting a higher deductible on your renters insurance policy can lower your premium. However, this does come at the cost of less effective coverage.
You should choose a deductible amount that matches how much you can pay out of pocket if you suffer a loss.
You should always check how changing your deductible will affect your rates, which you can usually do using an insurer's online quote tool. Given that most claim situations come with substantial costs, we recommend erring on the side of a lower deductible.
Compare renters insurance online
The renters insurance providers you consider will also affect the quotes you see. Traditional insurers will cover renters, but they may charge higher rates unless you bundle that coverage with auto insurance or other policies.
Meanwhile, there are plenty of online insurance startups that will provide renters insurance at competitive rates. You can use our tool to find and start comparing renters insurance options today.
Where to find affordable renters insurance
At ValuePenguin, we're always studying industry data and reading into policy details to identify the best insurance options for consumers. If you're looking for high-quality coverage from reliable providers, we suggest starting with our regularly updated list of the best renters insurance companies.
On the other hand, cost is also an important factor for a lot of renters. That's why we've also compiled a review of renters insurance providers that we recommend for affordable coverage that doesn't sacrifice reliability.