What is the average cost of renters insurance?

If you rent your home or apartment, having renters insurance is crucial. It protects your personal items if they get damaged or destroyed by certain events like fire, theft or extreme weather. Without renters insurance, you have to pay out-of-pocket to replace your items.

Renters insurance and home insurance are different types of policies. However, there is some overlap between the two. Both renters and homeowners insurance cover the belongings inside your residence, such as clothing, furniture and electronics.

One of the big differences between home and renters insurance is the price. The cost of renters insurance is significantly less than home insurance. Most people can get renters insurance for less than $20 per month. 

How much is renters insurance?

As of 2017, the average cost of renters insurance in the U.S. is $180 per year, according to data from the Insurance Information Institute (III). However, the price of renters insurance varies by state. You might pay more or less than the annual average depending on where you live. 

The states with the highest average annual renters insurance costs are:

1. Mississippi: $258
2. Oklahoma: $236
3. Louisiana: $235
4. Alabama: $235
5. Texas: $232

The states with the lowest average annual renters insurance costs are:

1. South Dakota: $123
2. Wisconsin: $134
3. Minnesota: $140
4. Nebraska: $143
5. Iowa: $144

Below is a list of the average annual cost of renters insurance in all 50 states:

1. Alabama: $235
2. Alaska: $166
3. Arizona: $178
4. Arkansas: $212
5. California: $182
6. Colorado: $159
7. Connecticut: $192
8. Delaware: $159
9. Florida: $188
10. Georgia: $219
11. Hawaii: $185
12. Idaho: $153
13. Illinois: $167
14. Indiana: $174
15. Iowa: $144
16. Kansas: $172
17. Kentucky: $168
18. Louisiana: $235
19. Maine: $149
20. Maryland: $161
21. Massachusetts: $194
22. Michigan: $182
23. Minnesota: $140
24. Mississippi: $258
25. Missouri: $173
26. Montana: $146
27. Nebraska: $143
28. Nevada: $178
29. New Hampshire: $149
30. New Jersey: $165
31. New Mexico: $187
32. New York: $194
33. North Carolina: $157
34. North Dakota: $120
35. Ohio: $175
36. Oklahoma: $236
37. Oregon: $163
38. Pennsylvania: $158
39. Rhode Island: $182
40. South Carolina: $188
41. South Dakota: $123
42. Tennessee: $199
43. Texas: $232
44. Utah: $151
45. Vermont: $155
46. Virginia : $152
47. Washington: $163
48. West Virginia: $188
49. Wisconsin: $134
50. Wyoming: $147

If you’re wondering what renters insurance costs per month, take the average annual premium for your state and divide it by 12. Even residents in Mississippi, who pay the highest annual rate of $258, will only pay slightly over $20 per month on average for insurance.

What affects my renters insurance cost? 

Renters insurance cost is determined by personalized factors. When the insurance company calculates your rate, it looks at a variety of criteria that influence the price. These factors are personal to you and the belongings you need to cover. Here are some of the most common factors that influence your renters insurance premium:

• Location (city and state)
• Age
• Gender
• Marital Status
• Credit score
• Value of what is being ensured
• Pets in your home
• Roommates
• Your deductible
• Your coverage limits
• Type of reimbursement

What factors influencing my renters insurance cost can I control? 

Many of the factors that determine your renters insurance premium are out of your control. For instance, you can’t change your age or where you live. Other factors, like your credit score, take much longer to change. However, there are certain things that you can easily change to better control your rate. 

The amount of coverage

The amount of insurance coverage you need depends on the amount of belongings you own and their value. Someone who owns $2,000 worth of items will pay much less for their insurance than someone with $10,000 worth of items. You will also pay more if you want to insure expensive things like electronics or jewelry.

The type of reimbursement chosen for your policy

When you buy a renters insurance policy, you can choose what type of reimbursement you get from your insurance provider. The main types of reimbursements are Actual Cash Value (ACV) and Replacement Cost Value (RCV). If your belongings are damaged or destroyed under an ACV policy, you’ll get reimbursed for those items with depreciation factored in. With an RCV policy, you’ll get reimbursed for the full amount you originally paid for the item. 

For example, if you bought a couch for $500 five years ago, you might get reimbursed $250 under an ACV policy. On the other hand, an RCV policy would reimburse you the full $500 because that’s what you originally paid for it. Most renters insurance policies default to ACV because they’re cheaper than RCV policies. Getting an RCV policy will save you money after a covered loss, but you’ll pay more for it upfront.

Endorsements

Endorsements are add-on coverages that the insurance company sells to give you added protection against covered losses. Common endorsements for renters insurance policies include flood insurance, electronics coverage, identity theft coverage and jewelry coverage.

Endorsements will raise your premium, but it will increase your payout from the insurance company. For example, say your renters insurance policy only covers electronics for up to $500. If you have $5,000 worth of electronics, you’ll want to get an add-on policy to increase your coverage level and reimbursement.

Your deductible

Your deductible is the amount of money you’ll pay out-of-pocket for a covered loss before the insurance company steps in. The higher your deductible, the lower your annual premium will be. That’s because you’re agreeing to pay more before getting reimbursed by insurance. A lower deductible means the insurance company has to pay a higher amount to reimburse you, and therefore increases your rate. The III recommends a deductible of at least $500, although up to $1,000 is ideal if you’re looking for savings.

The takeaway

Having renters insurance is a smart investment for anyone who rents their home or apartment. It’s a minimal cost to cover your belongings and avoid paying out-of-pocket for losses. However, it’s important to make sure you get the right amount of renters insurance coverage. If you own valuables, electronics, or anything else pricey, consider getting an endorsement. You should also decide what type of reimbursement policy you want, and what you can afford to pay for your deductible.