How Much is Renters Insurance? (2024 Guide)
The cost of renters insurance varies by person, state, and property due to factors like renting history, the age of your building, and state susceptibility to natural disasters. Keep reading this guide to determine how much your renters insurance policy will cost.
If you want to protect yourself as a renter, you need a good renters insurance policy. Of course, you also need to keep your monthly budget in mind. How much is renters insurance? The amount you’ll spend will vary based on where you live, the value of your personal belongings, your risk tolerance, credit score, and a handful of other factors. According to data obtained from Quadrant Information Services, you can expect to spend an average of $180 annually, or $15 monthly, on renters insurance. In this guide, we aim to give you a better understanding of the factors that influence your premium.
Renters Insurance Cost by Location
If you’re spending less or more than a friend on a comparable renters insurance policy, your location may be the reason for that price discrepancy. Some location-centric influences can make you more likely to file a renters insurance claim, leading to higher premium prices.
If you live in an area with a high crime rate, renters insurance companies may flag that you’re more likely to file a claim for theft or vandalism, for instance. To offset their risk, the insurance company will charge higher premiums. Local weather patterns can also affect how likely someone is to file a claim. If you live in an area where major storms or natural disasters are common, make some extra room in your budget for higher premiums.
Cost by State
Renters Insurance Cost by Coverage Amounts
Another major factor that influences your renters insurance premium is your chosen coverage amount. The more coverage you need, the higher your premium will be. Your chosen deductible will also play a role in premium pricing. The higher your chosen deductible, the less you’ll spend on premiums. It can be tempting to jump at the lowest possible premium, but be thoughtful when choosing your deductible amount. You don’t want to choose such a high deductible that you can’t afford to pay it when it comes time to file a claim.
According to Bonnie J. Walker, AIC, CLX Technical Lead, Property at Lemonade, picking the perfect deductible sets the tone for your policy. Why is this? “Well, when life throws you a curveball and you face a loss, your deductible is the amount you'll need to fork out per incident,” Walker explained, “Brace yourself, though—unlike health insurance where you meet your deductible just once a year, renters, homeowners, and condo policies come with a twist. Each claim you file? Yep, you guessed it—another deductible is taken. So choose wisely, as knowing that you are protected will make you worry-free.”
Let’s take a look at how renters insurance costs can vary by premium amount.
Cost by Renters Insurance Provider
When you’re shopping for renters insurance—or any kind of insurance policy—don’t focus solely on price. Getting a deal is great, but your priority should be finding the right amount of coverage for your specific needs for the best price. To find the right fit, request quotes for the same type and amount of coverage from at least three different renters insurance companies.
Cost by Credit Score
While it’s not legal in all states, some insurance providers can consider your credit score when setting your premium price. Why would your credit score matter when it comes to insurance pricing? Insurance providers believe that consumers with lower credit scores are more likely to file insurance claims. To offset their risk, they charge customers with poor credit scores higher premium prices than they do customers with good credit scores. If you’re not happy with your insurance premium and suspect your credit score is to blame, work on improving your credit score before it’s time to renew your policy to see if you can lower your price.
Cost by Claims History
Having a history of claims can lead to increased premiums. Before filing a claim, calculate how much you stand to save. If you won’t save much money after paying your deductible, you may save more by not filing the claim in the first place and avoiding increased insurance spending.
How To Save Money on Renters Insurance
If you want to save on your renters insurance policy, there are a few steps you can take.
Look for Renters Insurance Discounts
Always ask about potential discounts. You may qualify for one or many to help you save. “It is super important that you look for potential discounts when asking for a policy quote,” Walker shared. “Be sure to mention if you have additional safety features in your rental, like a sprinkler system or a burglar alarm. In addition, most carriers will apply a discount for having a ‘no-claim’ history and a discount for having good credit.”
While all insurers offer their own unique set of discounts, these are some of the most common you’ll come across.
- Multi-policy discounts: If an insurer offers other insurance policies that you need and you purchase more than one policy from them, you can often save by bundling your policies. “Bundling is the way to go,” Walker says. “Look at your potential carrier to see if you could benefit from bundling some additional insurance products like one for your pet Spike, and one for your vehicle.”
- Security system discount: If you install a security system or cameras, you can reduce the risk of theft or property damage and lower your likelihood of filing a claim.
- Claims-free discount: Policyholders who maintain a claims-free history over a certain period may earn a discount.
- Protective devices discount: This discount is for renters with safety features like smoke detectors, fire extinguishers, or sprinkler systems in their rented property.
- Membership discounts: Policyholders who belong to certain organizations or affiliations may qualify for discounts through group membership programs. You can also check to see if your employer offers any potential savings with select insurers.
- Paid-in-full discount: If you can pay your annual premium in a lump sum instead of monthly installments, you can save on your policy.
Compare Quotes From Multiple Providers
Take your time finding the right renters insurance provider for your needs. Ideally, you’ll find a renters insurance company that offers you the coverage type and amounts you’re looking for at a favorable price. Compare quotes from three or more insurance providers to ensure you’re being thorough in your search.
Adjust Your Deductible
Choosing a higher deductible leads to smaller premiums. If you decide to go with a high deductible to save on your premium, set aside the deductible amount in a savings account so you’re ready in case you need to file a claim.
Choose Endorsements Wisely
To keep your renters insurance spending as low as possible, you can choose not to purchase any endorsements or add-ons that can round out your coverage. If you do decide to add an endorsement to your policy, think carefully about which ones you’ll benefit from the most. For instance, if a renter doesn't own high-value jewelry or expensive electronics, opting out of a “valuable items” endorsement is a smart move. We like Lemonade renters insurance because they allow you to select the endorsements you want and see how it impacts your monthly premium.
Frequently Asked Questions About the Cost of Renters Insurance
Why is renters insurance so expensive?
Renters insurance is actually one of the least expensive insurance policies on the market. But if you do happen to have an expensive policy, it may be because you have a lot of valuable items to protect. You can always lower your coverage amount or shop around for a better deal to secure a more affordable premium.
Does renters insurance increase after a claim?
Renters insurance premiums can increase after you file a claim, but this is not a guarantee. All renters insurance companies handle premium pricing differently.
Can you get a refund on renters insurance?
You may be able to get a partial or full refund on your renters insurance policy if you cancel it before its term expires. Before purchasing a renters insurance policy, familiarize yourself with the insurer’s cancellation policy.
Why does my renters insurance keep going up?
There are a few different reasons why you may see your renters insurance premium rise over time. Filing claims, lowering your credit score, or purchasing additional coverage can all lead to increased premiums. If you’re concerned about the rising cost of your renters insurance, chat with your insurance agent about potential discounts or other options for lowering your price.