Guest Blogger: Jeff Gitlen, LendEDU
Renters insurance is highly underrated and often overlooked. So when we came across this blog Jeff Gitlen wrote, originally published on the LendEDU blog, we just had to share his straightforward explanation and research on just how little a policy actually costs (HINT: it’s about the cost of a pizza!). When disaster strikes, having a renters insurance policy in hand can be helpful – read on for more!
At a Glance:
The average cost of renters insurance across the United States can change depending on where you live and how much coverage you need. Given the low cost – on average about $16 per month – and high value, a renters insurance policy can be a wise investment for renters.
Some people feel strongly that renting an apartment or home is a more cost-effective choice than purchasing a home. Part of this thought is that with most rental properties, the owner or property manager is responsible for the ongoing maintenance and safety of the home.
While true, damage, theft, fire, or weather disasters can also become a significant financial burden to the renter. This is because the property owner is only responsible for covering the physical dwelling, not necessarily the contents of the home – like the renter’s personal belongings.
As a renter, having the right renters insurance policy is the best way to cost-effectively protect yourself and your things from unforeseen events. The average cost of renters insurance is relatively low, and having it in place can offer peace of mind against damage or loss.
However, before selecting a renters insurance policy, it is important to understand what is covered, the strength of the insurance company, and of course, the cost.
Jump to a section:
- What is the Average Cost of Renters Insurance?
- What Factors Affect the Cost of Renters Insurance?
- Average Renters Insurance Premiums by State
What is the Average Cost of Renters Insurance?
In the United States, the average cost of a renters insurance policy is just under $16 per month, or $188 for the year, according to the most recent data compiled by the Insurance Information Institute. The current cost is not much different from the cost of a renters insurance policy 10 years ago, and the most recent average is slightly lower than the previous year. However, renters insurance premiums vary from state to state, and several factors can affect the cost.
Factors That Affect the Cost of Renters Insurance
The most important factor in determining the cost of a renters insurance policy is your location. Areas of high crime, natural disasters, or other prevalent claim causes can require a higher monthly or annual premium than areas with fewer issues. Additionally, premiums may range from state to state as well as from rural to metropolitan areas. In most cases, renters insurance costs more in areas where there are more people.
Also, the cost of a renters insurance policy is specific to your coverage needs and desires. If you have high-dollar items inside your apartment or house and include them in your renters insurance policy, your premium is likely to be costlier. Similarly, if you have a claims history with a previous insurance company you may pay more for coverage.
You may also add on additional coverage, such as additional liability insurance, to a renters policy. Doing so will increase the cost of insurance; however, keep in mind that liability insurance could come in handy in certain scenarios where basic coverage is insufficient. While there is an increase in cost, there is likewise an increase in the safety net of coverage.
Average Renters Insurance Premiums by State
As mentioned previously, the area where you live plays a role in how much you pay for renters insurance coverage. For most policies, insurance companies charge more in areas where natural disasters are more prone to take place, or in urban areas where crime may be higher. However, contrary to popular belief, the cost of living does not have much impact on your premiums. The states with the highest and the lowest renters insurance premiums annually, according to the Insurance Information Institute, are listed below as a guide.
Highest Premiums by State
Here are 10 sates with the highest average premiums on renters insurance:
- Mississippi: $262 per year
- Louisiana: $249 per year
- Alabama: $242 per year
- Oklahoma: $242 per year
- Texas: $241 per year
- Tennessee: $210 per year
- Michigan: $203 per year
- New York: $202 per year
- Massachusetts: $196 per year
- South Carolina: $192 per year
Lowest Premiums by State
Here are 10 states with the lowest average premiums on renters insurance:
- North Dakota: $114 per year
- Wisconsin: $132 per year
- Minnesota: $144 per year
- Iowa: $146 per year
- Maine: $147 per year
- Montana: $147 per year
- Nebraska: $149 per year
- Utah: $149 per year
- New Hampshire: $150 per year
- Vermont: $155 per year
With premiums ranging between $15 and $30 per month, securing renters insurance is one of the most affordable coverage options for those renting an apartment or home. Compared to homeowners insurance, which can exceed $1,000 per year, renters insurance is cost-effective protection against damage, theft, and other disasters that may create financial loss.
Before getting renters insurance to help cover your personal belongings, be sure to comparison shop between insurance providers. Not only does your location, claims history, and specific inventory of material items come into play in pricing renters insurance, but the insurance company you select makes a difference as well. It is important to get quotes from more than one insurance provider and compare the coverage amounts, limitations, and premiums before choosing a policy.