Renters insurance: average cost and options


Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, which we will always identify, all opinions are our own. By refinancing your mortgage, the total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”.

Renters may assume that their property is protected by their landlord’s home insurance policy, but that is not the case.

While a home insurance policy covers the structure of the house and any contents belonging to the landlord, you will need renter’s insurance to protect your possessions.

Because it doesn’t cover the structure of the property, tenant’s insurance is quite affordable compared to a home insurance policy.

Here’s what you can expect to pay for renters insurance and the factors that affect your insurance rate:

How much does tenant insurance cost?

According to the latest data from National Association of Insurance Commissioners.

The exact amount you’ll pay for renters insurance depends on the risk factors and the type of coverage you choose.

Compare home insurance from the best insurers
  • Entirely online, take out home insurance instantly
  • Compare quotes from highly rated home insurance companies in your area
  • No spam, phone calls, upsells or fake quotes

Get insurance quotes now

Factors That Determine Your Renters Insurance Rate

Your renter’s insurance premium is based on the likelihood of you filing a claim as well as the amount of any claim you may file. Insurance companies consider a number of factors when calculating the cost of your premium.

Factors determined by your situation

These factors are based on your situation rather than the choices you make when purchasing your tenant insurance policy.

Location of the house

The location of a rental property plays a major role in determining the risk of damage to your property. High crime areas, for example, increase the risk of vandalism and theft. As a result, you are more likely to pay a higher premium living in these areas.

Areas susceptible to natural disasters, such as earthquakes and hurricanes, are also at risk.

Value of insured items

Insuring property worth a few thousand dollars presents less risk to an insurance company than insuring property worth tens of thousands of dollars.

The type of items you insure also affects your premium. You will need to purchase additional protection, called an endorsement, for expensive items like electronics, furs, jewelry, and artwork, as standard policies limit their coverage.

Insurance score or credit score

Some states allow insurance companies to base premiums on an insured’s credit score or its insurance equivalent – an insurance score. Lower scores are associated with higher risk and lead to a higher insurance premium.

Factors determined by your choices

The following factors are based on the choices you make when selecting coverage.

Type of coverage

You can choose between two types of rental insurance coverage:

  1. Vast: A general policy insures your property against specific risks such as fire, lightning, smoke and theft. This is the most common type of coverage, but it offers the least coverage.
  2. Complete: Comprehensive coverage covers everything not specifically excluded by the policy. While extended coverage would not cover water damage unless the policy specifically stated that water damage was covered, a comprehensive policy would cover it as long as the policy did not specifically exclude it. This coverage is usually more expensive.

Coverage amount

While you wouldn’t want to buy less insurance than you need to protect your belongings, a tight budget might leave you guessing how much coverage to choose.

In this case, you can choose to lower your coverage limit – for example, selecting $10,000 of coverage even if you have $12,000 worth of property – or forgoing a rider that would cover your electronics beyond that. coverage limits allowed by a standard policy.

The amount of liability coverage you select is also factored into your premium. Liability insurance pays for your legal costs in the event a family member, pet, or guest causes injury or property damage resulting in a lawsuit.

Actual cash value versus replacement cost

Part of selecting renters insurance is deciding what you want to pay for: the actual cash value of your belongings minus depreciation, or the amount you would have to pay to replace them. Replacement cost coverage is more expensive, but ensures you get a full refund if your property is destroyed.


A deductible is an amount you are responsible for paying before your renter’s insurance kicks in – $500 or $1,000, for example. Selecting a higher amount reduces your premium.

How to Compare Renters Insurance Options

Rental insurance policies include several types of coverage. You’ll want to look into these coverages and collect renters insurance quotes from a few different insurers to see how the costs compare.

Standard types of coverage offered with a renters insurance policy include:

  • Personal property: Personal property coverage insures your belongings, up to a coverage limit you choose.
  • Additional living expenses: Covers temporary accommodation and living expenses in the event you are displaced from your home due to a covered emergency.
  • Personal responsibility: Protects you from lawsuits in the event you or someone in your home injures someone or damages property.
  • Medical fees: Provides direct reimbursement to someone accidentally injured on a property you rent.

Create an inventory list of your belongings before you start shopping, along with photos and estimates of depreciated and replacement values ​​for items. This way, you can experiment with different coverage limits and deductibles to find the best balance between affordability and protection.

Point: Ask the insurers you are considering about the special discounts they offer. American family insurancefor example, reduces your deductible each year when renewing your policy.

How to reduce the cost of your tenant’s insurance

Renters insurance premiums are not set in stone. Here are some ways to lower yours:

  • Make sure your smoke detectors meet local codes.
  • Ask the owner to install deadbolts and a security system, or ask permission to install your own.
  • Improve your credit score.
  • Consider buying a renter’s insurance policy from an insurance company you already use, like your auto insurance company, and asking for a bundle discount.
  • Stay with the same insurer to benefit from loyalty discounts and no-claims discounts.
  • Increase your deductible, but not beyond what you could afford if you were to file a claim.
  • Avoid over-insuring. Covers are capped, so there’s no benefit to insuring your belongings for more than they’re worth.

Disclaimer: All insurance related services are provided by Young Alfred.

About the Author

Daria Uhlig

Daria Uhlig is a Credible contributor who covers mortgages and real estate. His work has appeared in publications such as The Motley Fool, USA Today, MSN Money, CNBC and Yahoo! Finance.

Read more


About Author

Comments are closed.