How to Estimate Your Renters Insurance Cost

How to Estimate Your Renters Insurance Cost

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In order to estimate how much renters insurance you need and calculate how much it will cost, you'll need to consider four things:

The value of your personal property, how much liability coverage you need, where you live, and any other extra coverages you might want to add based on your circumstances.

As with all policies, the more renters insurance coverage you buy, the more you'll pay in premiums. But correctly calculating the amount of coverage you need will ensure that you're adequately protected without spending money on unnecessary add-ons. A basic renters insurance policy tends to be fairly inexpensive, falling between $10 and $30 per month, so if you're paying more than that, consider looking elsewhere for cheaper coverage.

Calculate the value of your personal property

Renters insurance includes coverage for damage to your personal property, up to the limit of the policy. So in order to estimate how much personal property coverage you require, create a list of all your belongings and determine their approximate value.

Categories of items to include:

  • Clothing
  • Furniture
  • Appliances
  • Dishes and cookware
  • Tools and landscaping equipment
  • Sports equipment and bicycles
  • Electronics (computers, TVs, video game systems, cellphones)
  • Media (books, music, movies, games)
  • Jewelry, art and other valuables
  • Other

Once you have a list of your belongings together, use it to create an estimate of how much your belongings are worth. Start with the highest-value items like electronics and furniture, and work your way down, as renters insurance for your personal property is usually sold in $10,000 increments. So once you've taken care of the pricier items, you can make a better estimate about how much renters insurance property coverage you need without having to price every book and T-shirt you own.

Creating a detailed list of your belongings, when you purchased them and how much they cost will also make your life a lot easier if you ever need to make a claim, especially if your belongings are stolen — or completely destroyed, such as by a fire. Documenting your possessions with photographs will also speed the process along, both while you're calculating the coverage you need and if you ever need to make a claim.

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Not all personal property is covered by renters insurance

There are a few things that aren't covered by renters insurance personal property coverage. One is your car, since that's covered by auto insurance instead. Another is the structure of your apartment, which is protected by your landlord's property insurance. And high-value items like jewelry, cash or gold might not be covered, or they could be subject to dollar limits. For example, a standard renters insurance policy might only cover up to $1,500 for jewelry. If your $5,000 engagement ring was stolen, you'd be responsible for paying the other $3,500 on your own.

Items that are commonly limited or excluded in renters insurance policies:

  • Jewelry
  • Precious metals
  • Artwork
  • Cash
  • Electronics
  • Bicycles
  • Musical instruments

If you own any high-value items that would have limited coverage under your policy, consider adding an endorsement or floater that will protect your valuables for their entire worth.

Actual cash value or replacement cost value?

There are two different ways your property can be valued: actual cash value (ACV) or replacement cost value (RCV). ACV subtracts the depreciation from the amount you'll be reimbursed, while RCV pays the total cost to replace the item with a brand-new version. So if you bought a laptop three years ago for $1,000 and it's depreciated by 60%, you'd only get $400, minus your deductible. But if you have replacement cost value coverage, you'd get the full $1,000 — again, minus your deductible.

Some renters insurance companies allow you to choose between ACV and RCV coverage, in which case you'll pay a little extra if you opt for RCV. However, some renters insurance companies only offer one option or the other, so consider which you'd prefer before committing to a renters insurance company that only offers one.

Estimate how much renters insurance liability coverage you need

Another key part of renters insurance is liability coverage, which protects you financially in case someone experiences medical or other damage for which you are legally liable. Someone might make a liability claim against your insurance if your dog bites them or they slip and fall in your apartment.

Liability insurance for renters is typically sold in increments of $100,000, and $100,000 or $200,000 is likely sufficient for most renters.

Generally speaking, the more assets you have and the more high-liability activities you participate in, the more liability coverage you should buy. This is because people are more likely to bring a lawsuit if they believe the defendant has enough money to pay a settlement. And if you engage in high-liability activities, like having frequent houseguests, owning a dog or employing domestic workers, you're more likely to have a claim made against you and might want to increase your coverage, too.

If you feel you're at an especially high risk of a lawsuit, consider an umbrella policy to boost your liability coverage, which typically starts at $1 million of coverage, for a few hundred extra dollars per year.

Renters insurance costs across the country

The cost per month of renters insurance varies across the United States, so you might pay more or less based on where you live. For example, the cheapest state for renters to buy insurance is North Dakota, at only $9.58 per month. Meanwhile, the most expensive state is Mississippi, where renters pay an average of $20.33 each month. See our breakdown of how much renters insurance costs in each state.

The cost can vary within a state, too. For example, the two most expensive places for renters insurance are Beverly Hills, California, a wealthy suburb just outside of Los Angeles, and Oakland, California, where renters can expect to pay $30.33 and $27.33 per month, respectively. On the other hand, people living in Santa Maria, California, can expect to pay about $13.83, which is the cheapest price in the state.

Extra coverages you might need

In addition to the most typical parts of renters insurance — personal property and liability coverage — renters insurance companies often provide additional coverages. Some of these are included in a standard policy, while others may come with an additional fee, which should be included in your calculations when estimating your cost of renters coverage.

Here are the additional and optional coverages available from four top renters insurance providers: Allstate, Erie, Lemonade and State Farm.

What is it?
Which insurers have it?
Medical payments to othersPays for medical bills if guests are injured on your propertyAllstate, Lemonade, State Farm
Earthquake coverageCovers damage to your belongings from earthquakesState Farm
Flood coverageCovers damage to your belongings from floodingLemonade, State Farm
Loss of usePays for a hotel and living expenses if your apartment is uninhabitableErie, Lemonade, State Farm
Valuable items coveragePays for replacement of valuable items that are otherwise not fully covered in your renters insurance policyErie, Lemonade, State Farm
Identity theft coveragePays for costs associated with having your identity stolen, like fraudulent bills and getting new IDsAllstate, State Farm

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