The Average Renters Insurance Cost

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According to NerdWallet’s most recent rate analysis, the average renters insurance costs in the U.S. are $168 per annum, or approximately $14 per month. This is an estimate based on a policy that covers a hypothetical 30-year old tenant with $30,000 of personal property coverage, $100,000 liability coverage, and a $500 deductable.

The national average is useful as a baseline. However, renters insurance rates will vary based on where you live or how much coverage you require.

What is included in the renters insurance rates

The most common renters insurance policies cover four types of coverage.

Personal property. This part of your policy will pay for the replacement cost of personal property if they are lost, stolen, or damaged by windstorms or fire. Your policy will specify the specific situations that are covered.

Liability. This policy covers legal expenses and lawsuit damages for incidents such as a guest being injured at your home, or your dog biting someone. Some insurers do not cover certain breeds of dog.

Medical payments. This coverage, which is often grouped with liability insurance, is a little different. It will cover guests’ injuries to your property and not require a lawsuit.

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Additional living expenses. This coverage, also known as loss-of-use, pays out if your home is being repaired due to a covered disaster. It would, for example, cover your hotel and restaurant expenses while you wait to move back home.

What is the cost of renters insurance?

Each insurance company calculates renters insurance rates differently. However, these are the most common factors that can influence your premium.

Wherever you live

If your home is in a region prone to natural disasters like hurricanes, wildfires or tornadoes, you’ll probably pay more for renters insurance. If your area is prone to crime or your home does not have a fire station, hydrant or fire station nearby, you may pay more for renters insurance.

Previous claims

Your current insurer may consider you a higher risk if you have filed claims within the last three to five year, even if you are with another company. This could increase your premium. A NerdWallet analysis revealed that having a claim on your records can increase your premium by more than 20%.

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Credit history

Renters insurance companies don’t check your FICO credit score, but in most states they do look at your credit-based insurance score, a similar measure, to evaluate your ability to pay your premiums. A NerdWallet analysis revealed that renters with bad credit pay twice as much as those who have good credit.

In Washington, California, Maryland, Massachusetts, and Washington, it is against the law to use credit to fix homeowners’, renters’, condo, or mobile home insurance rates.

Your dog

Renters insurance usually covers liability for dog bites. However, having larger dogs or breeds that are considered aggressive could result in higher premiums (or none at all).

Limits of coverage

Your policy cost will increase the more coverage you have. For example, a family that rents a three-bedroom home will pay more for their contents than someone who lives in a one-bedroom apartment in the same area. Below is a sample of the potential changes in your renters premium based on the amount of personal property coverage that you require.

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Your deductible

You can lower your premium by choosing a higher deductible, the amount you pay toward a claim before your insurer covers the rest. If you have to pay the higher deductible in an emergency, however, the premium difference could not be significant.

How to reduce your renters’ insurance costs

There are many ways to save money on renters insurance. These are the most popular discounts.

Multipolicy. Multipolicy. You may be eligible for a discount if you purchase both renters insurance as well as another policy (such an auto insurance) from the same company.

No claim. Renters who have not filed any claims in the past are eligible for discounts. Depending on the company, “Recent” claims typically fall within the last three to five years.

Safety and security devices. Insurance companies will often lower your rates if you have burglar alarms, smoke detectors or sprinkler systems in your home.

Depending on the insurer you choose, you may also be able to save money by opting for paperless billing or autopay. You can also pay your policy in full, rather than in monthly installments, and refrain from smoking.

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Shopping around is your best option. To ensure you get the best deal, we recommend getting quotes from at minimum three companies.