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Even if you don’t own your home, you almost certainly own plenty of belongings you’d like to protect. Renters insurance is generally the best way to do this. With these policies, your furniture, clothing, electronics, and other items can be replaced if they’re damaged or destroyed in a disaster.
Here’s how much renters insurance costs and how to choose the right policy for you.
Visit Credible to get renters insurance quotes from top carriers.
How much is renters insurance?
Renters insurance policies cost $174 per year on average across the U.S., according to the National Association of Insurance Commissioners. This equates to about $14.50 per month. But the price you pay can vary based on where you live and the value of your belongings. It’s not unusual to pay between $15 and $30 per month for a standard renters insurance policy.
If you live in a state with a higher risk of natural disasters — think Southern, coastal states at risk for hurricanes or Midwestern states with a high risk of tornadoes — you’ll typically pay higher rates for renters insurance. For example, the average cost of a renters insurance policy in Louisiana is $236 per year, while in North Dakota the average is only $115.
What determines your renters insurance rate?
Your individual policy features also have a significant impact on the rate you pay for renters insurance. First, there’s your coverage limit, or the maximum amount your insurance carrier will pay after you file a claim. You’ll want to make sure your coverage limit is high enough to completely replace all your belongings if they’re destroyed in a fire or other unexpected disaster. However, the higher your coverage limit, the more you’ll pay for your policy.
Your policy’s deductible also plays a major role in the rate you pay for renters insurance. A deductible is the amount you pay out of pocket after filing a claim, before your insurance carrier steps in to cover the rest. When shopping for a policy, you can generally choose from a range of deductibles, often starting at a minimum of $500 or $1,000. The higher your deductible, the less you’ll pay each month for your renters insurance — but the more you’ll pay if you have to file a claim.
Other factors that can change the rate you’ll pay for renters insurance include:
- How your policy pays — A renters insurance policy can reimburse you after a claim in one of two ways: based on actual cash value or replacement cost. With actual cash value, your insurance provider pays you the depreciated value of your belongings. With a replacement cost policy, your insurer would pay you for the cost of buying new belongings. Replacement cost policies tend to cost more, but they give you better protection after a disaster.
- Your credit history — Insurance carriers base your policy’s price on your risk of filing a claim. If they deem you likely to file a claim, they’ll charge you a higher price. One way insurers try to determine this is by looking at your credit-based insurance score. Research has shown that people with lower credit scores are more likely to file claims, so poor credit can increase the price you’ll pay for renters insurance.
- Your claims history — Insurance providers also look at how often you’ve filed insurance claims in the past. If you’ve filed a large number of claims, you can expect a higher renters insurance rate.
- Additional coverages you need — A standard renters insurance policy will cover your basic furniture and clothing, but often won’t cover any particularly expensive collections or valuables. To protect high-value items, you’ll need to buy additional coverage, called a floater or rider.
Credible makes it easy to compare renters insurance rates from multiple carriers, all in one place.
Ways to compare renters insurance options
To get the best renters insurance policy for your situation, follow these steps:
- Determine how much coverage you need. The coverage limit on your policy should be high enough to replace all your belongings if they’re damaged or destroyed. To figure out how much you’ll need, create a home inventory. List out all your possessions, including how much they’re worth. When you total that up, you’ll have a good sense of the coverage limit you’ll need.
- Decide on a deductible. The higher your deductible, the lower you’ll pay each month for your renters insurance policy — but you’ll need to pay more out of pocket if you file a claim. Take a look at your budget and emergency savings and decide which is more important to you. If you have little savings, you may be willing to pay slightly more for your insurance policy to prevent a big bill if you need to file a claim. If you can comfortably cover a higher deductible, you might opt to save money on your premium.
- Get multiple quotes. Once you know the policy features you’re looking for, you can get quotes from multiple insurance carriers. In most cases, you can fill out a relatively simple online form and get a nearly instant quote. As you compare quotes, make sure that the policies are identical. If the two policies have different coverage limits, for example, you can’t make a fair comparison.
- Look at more than price. While you want a good deal on your renters insurance, you should take other factors into account. Make sure you’re considering quotes from licensed, reputable companies. Ask about the process each insurer has for filing a claim, and read reviews to gauge the customer experience they offer.
How to lower the cost of renters insurance
As you shop for a renters insurance policy, keep an eye out for other ways you can lower your rate. These can include:
- Bundle policies. If you buy more than one insurance policy from the same insurance carrier — both renters and car insurance, for example — that’s called a bundle. Most insurers offer discounts to people who bundle multiple policies, saving you money on your monthly payment.
- Avoid claims. The more claims you file, the higher your rate tends to be. Try to avoid filing claims as much as you can. Keep your doors locked to avoid burglary, and take care to minimize your risk of fire. If you’re considering filing a claim for a minor incident, evaluate whether the amount of damage is more than your deductible. If it isn’t, or if it’s close, consider not filing the claim.
- Install security devices. Some insurance providers may offer discounts if your home has certain security features, such as an alarm system or deadbolt locks.
- Find a group rate. Your university’s alumni association or a nonprofit you’re a member of may have deals with an insurance carrier that gives you access to a lower group rate on a policy.
- Improve your credit score. Most insurance providers use credit-based insurance scores to gauge your risk of filing a claim. The better your credit history, the better the rate you can get. Improving your credit score can give you access to these lower prices. The best way to do that is to focus on making all your bill payments on time, every time.
If you’re ready to get renters insurance quotes, Credible lets you quickly and easily compare insurance rates from top carriers.