How Much Does Renters Insurance Cost?

Renters insurance is one of the cheapest types of insurance you can buy, with the average policy costing around $14 per month, or $166 per year.

But even though renters insurance is generally affordable, your actual rate depends on factors like where you live, how much coverage you need, your deductible, and your credit history.

If you’re considering renters insurance, here’s what you need to know about how much renters insurance is in your state, how to qualify for discounts, and whether it’s worth the cost.

Average Cost of Renters Insurance by Major States

Renters insurance costs vary by state, mainly because insurers factor in local risks like theft, storms, hurricanes, and wildfires. States with higher exposure to these risks, such as Louisiana, Mississippi, and Texas, tend to have higher premiums, while states with fewer claims risks are generally cheaper.

According to SoFi, here's what you can expect to pay in some of the major states:

Note: These averages are only a starting point. Your actual rate depends on factors like your coverage limits and deductible, which we’ll touch on below. For the most accurate price, compare quotes from at least three renters insurance companies.

What Factors Affect Your Renters Insurance Cost?

Many factors can affect how much you pay for renters insurance, including the following:

Location

Where you live affects how much your renters insurance costs because rentals located in regions with storm, hurricane, wildfire, or flooding risks are more expensive to insure.

Coverage amount

Higher coverage limits typically cost more because they provide more protection. For example, if you have a big family and are renting a three-bedroom house, you’ll almost always pay more to insure your stuff than a single person who lives in a studio apartment.

Replacement Cost vs. Actual Cash Value Coverage

Whether your renters insurance policy uses replacement cost or actual cash value coverage affects your premiums.

Replacement cost coverage is usually more expensive since it reimburses you for new versions of damaged items after a covered claim. And though actual cash value coverage is more affordable, it accounts for depreciation and pays out only based on what your belongings are worth now, in their depreciated state.

Deductible

A deductible is the amount of money you pay out of pocket before your coverage kicks in. For example, if you have a $500 deductible and your claim is $5,500, you’ll get an insurance payout of $5,000. The higher your deductible, the less you’ll pay in premiums.

Your claims history

Insurance providers will review your recent claims history when they’re setting your rates. If you’ve filed multiple claims in the past, expect to pay higher premiums.

Your credit

Your credit is another factor insurance providers will consider when they’re determining your rates. Insurers see people with good credit as less risky, which usually translates into lower premiums.

Dog ownership

Many renters insurance companies exclude certain dogs from coverage or tack on a surcharge, especially if you have a dog that has a history of biting or other behavior issues.

That’s because if your dog bites someone or damages another person's property, your policy’s liability coverage will have to pay for medical or legal expenses.

How to Get Cheap Renters Insurance (Discounts)

Many renters insurance companies offer discounts to help you save on your premium. Here’s how you may be able to qualify:

• Bundle your policies: If you bundle your renters insurance with another insurance policy from the same company, you may qualify for a multi-policy discount.
• Improve home safety: The safer your rental is, the less likely you’ll file a claim. That’s why insurance providers offer discounts to those who have protective devices installed, such as smoke detectors, fire alarms, and burglar alarms.
• Be claims free: A claims-free discount rewards renters who haven’t submitted an insurance claim for a certain period of time, typically three to five years.
• Enroll in automatic payments: You may qualify for a discount if you enroll in automatic payments or pay your premium in full.
• Stay with the same insurer: Some insurers offer loyalty discounts to renters who remain with them for a specific period of time, such as a year.

Is the Cost of Renters Insurance Worth It?

Renters insurance is usually worth it considering the potential stress and expense of damages. Renters insurance averages only around $14 a month, which equals less than $200 a year.

Without it, you’d have to shell out thousands of dollars to replace an entire wardrobe, electronics, and furniture out-of-pocket in the event of a fire or theft.

Even if your landlord doesn’t require you to have renters insurance, you should still consider getting it since it’s a low-cost way to protect you financially.

Frequently Asked Questions (FAQs)

How much renters insurance coverage do I actually need?

How much renters insurance coverage you need will depend on the value of your personal belongings and the level of liability coverage you want. Most policies include at least $100,000 in liability coverage.

Does my roommate paying their share of renters insurance cover me?

No, renters insurance policies generally only cover the policyholder and immediate relatives unless roommates are explicitly added.

What is the cheapest renters insurance company?

The cheapest renters insurance depends on many factors, including your location and coverage needs. But you can typically find affordable options from national carriers like State Farm, Lemonade, Progressive, Amica, and Allstate.

Conclusion

Renters insurance is incredibly affordable and often costs less than a couple of coffees a month. Considering it can help protect you from paying thousands of dollars out of pocket after covered damage, it’s usually well worth the cost.

That said, your specific rate depends on factors like where you live, how much stuff you own, and the insurance provider you choose, so your best bet is to shop around. We recommend getting quotes from at least three companies to make sure you’re getting the best deal. Find out how to choose the right renters insurance for your situation