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Even if you live in an apartment, you still have ways to protect your personal property from financial loss. While renters insurance is optional, many landlords require tenants to carry a policy to cover losses in the event of an accident, break-in, or other incident. On average, Americans pay between $19 and $41 per month for a renters insurance policy, depending on the amount of coverage they choose.
Protecting your personal belongings, even on a property you don’t own, can save you financial stress if your belongings are stolen or destroyed. Here’s what you need to know about renters insurance and the factors that affect your costs.
Cost of renters insurance in 2024
Like homeowners insurance, you can add renters insurance to your auto policy or purchase it separately. Renters insurance policies are typically significantly less expensive than homeowners and auto insurance policies. For example, the average rate for liability-only car insurance is $104 per month, and the average rate for homeowners insurance is $198 per month, according to Insurify data.
Renters insurance rates fall significantly below these marks, and you may be able to save time and money if you bundle your rental insurance policy with your auto insurance company. Here, you can see the average rental insurance rates based on specific coverage amounts.
Renters insurance costs by state
The average cost of a renters insurance premium varies between states.
Alaska has the lowest cost for a renters policy, at $5 per month, while Louisiana has the highest monthly average, at $34 per month. Most of the states with the highest average cost for personal property coverage are all in the southern U.S.
Louisiana, Mississippi, Georgia, Texas, and South Carolina all have higher-than-average rates for renters insurance. These states also have cities within FEMA’s moderate- to high-risk ranges for hurricanes, which likely affects the average cost of insurance.1
States with the lowest renters insurance policy costs include Alaska, North Carolina, and Wisconsin, as you can see below.
Cost of renters insurance by insurance company
Renters insurance rates are generally affordable regardless of insurer. But some companies offer coverage that’s even more budget-friendly.
Both Erie and American Family have policies that average $15 and below per month. Some of the biggest insurance companies, including Allstate, USAA, State Farm, and Nationwide, offer some of the lowest renters insurance costs, averaging less than $20 monthly.
Here, you can see the average rates available from many of the nation’s top insurance companies.
How insurers calculate the cost of renters insurance
Renters insurance policies operate similarly to auto insurance and life insurance. Insurance companies look at your applicable risk factors and other information to determine how likely you are to file a claim. They then assign an insurance rate based on those risks factors.2
Some of the most common factors insurers consider include:
Location: The insurance company will look at your ZIP code and consider if it’s in a high-crime area or if your property sits in a flood zone or an area at risk for other natural disasters.
The value of your stuff: Most insurance companies will want at least a basic home inventory to determine how much coverage you need. Your coverage amount will affect the premium.
Deductible: Insurance companies will set your premium based on the risk you’re willing to take. Your premium cost will be lower if you have a higher deductible because you’ll pay more out of pocket before your coverage kicks in.
Liability: Renters policies also include liability coverage, which pays for injuries and medical expenses for visitors injured at your home. Basic policies typically include around $100,000 of coverage.
Cash value: When you choose your policy, you’ll need to decide between an actual cash value policy and a replacement cost policy. The payouts vary widely, and you’ll see a lower premium cost for actual cash value coverage versus replacement cost coverage because actual cash value takes depreciation into account when reimbursing you for your losses. Replacement cost policies reimburse you at the original value of your objects, meaning the insurer will pay more to cover your claim.
How to get cheaper renters insurance
If you’re looking for an affordable renters insurance policy, here are a few things you can do to get the best rates possible while getting the coverage you need:
How much renters insurance coverage you need
Renters often need help trying to assess how much insurance coverage they need. The first thing you should look at is your personal belongings. Do you have anything expensive or irreplaceable?
You’ll want to make sure you can afford to replace your most important personal items as well as clothing if everything is destroyed. Take a notebook and pen, and make a list of all the items you own. Pay special attention to any electronics, artwork, jewelry, appliances, and other items that could cost a lot to replace.
In addition to your personal possessions, you’ll want to consider liability costs for damages, legal fees, or medical bills if you or a roommate (or family member) are at fault for an accident, injury, or property damage on site.
Most standard renters insurance policies offer coverage up to $100,000, which is likely enough for most renters. You should aim to have enough renters insurance to replace your most important items. If you have expensive valuables like art, jewelry, or vehicles, you may opt for additional coverage such as an umbrella policy.
You should also consider how much of a deductible you can afford and set aside that amount in an emergency fund if you ever need to use it. A higher deductible means that you’ll pay more out of pocket if an incident occurs, but you’ll pay less up front.