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The Average Cost of Renters Insurance
Renters insurance covers all of your personal property inside your rental dwelling that is not part of the structure. For those who rent apartments or homes, the landlord’s policy covers damage to the building itself — but not to the belongings of those who live there in the event of a covered loss. Landlord insurance will also not cover liability costs if someone is injured in the rental unit. Renter’s insurance provides financial protection for these circumstances.
According to the Insurance Information Institute (III), the average cost of renters insurance is $179 per year, which works out to about $14 per month. But like all types of insurance, renters insurance premiums are customized for each individual. Your premium is based on personal factors like your state, ZIP code, insurance-based credit score (in most states), claim history, the amount of coverage you buy, and your deductible.
Renters insurance is significantly cheaper than home insurance, primarily because renters insurance offers no protection for the structure itself. Renters are only responsible for the personal property damage or liability incidents occurring inside the unit. The landlord will have a separate policy that provides coverage for the structure of the building, much like regular home insurance.
What Renters Insurance Covers
Renters insurance offers comprehensive coverage for many of the most common perils that a renter can face. Here are some of the things that renters insurance will cover:
- Personal property coverage: Renters insurance provides coverage for your personal belongings, like clothing, furniture, and small appliances. It offers limited coverage for valuable items and electronics.
- Liability coverage: If someone gets injured in your apartment or you accidentally damage someone else’s property, renters insurance will typically provide financial protection for a qualifying incident, up to policy limits.
- Medical payments coverage: Medical payments coverage helps pay for medical expenses if a guest is injured at your home, even if you are not responsible for causing the injury.
- Additional living expense coverage: If your home gets damaged or destroyed in a covered peril and you have to move out during the course of repairs, additional living expenses (also called “loss of use”) will pay for things like a hotel, restaurant meals, or parking.
Most renters insurance companies also offer optional coverages that you can purchase for an added fee. Common endorsements include credit card or scheduled personal property coverage, contents replacement cost coverage, and identity theft coverage.
What renters insurance doesn’t cover
Before you buy a policy or get renters insurance quotes, it may be helpful to know what your policy won’t cover. Here’s a list of perils that are typically not covered by a standard renters insurance policy:
- Flood damage
- Earthquake damage
- General wear and tear
- Pets and infestations
- Pet damage
- Your vehicle
- Your roommates’ belongings
- The structure of the building
Some insurers may include perils like flood or earthquake in a standard renters policy; check with your insurance agent to see exactly what’s covered in your policy.
How to Pick the Best Renters Insurance Company
Dozens of insurance companies sell renters insurance, but the best company for you might not be the best option for your friend, or even your roommate. Here are some things to keep in mind as you shop for and compare renters insurance:
If you purchase a renters insurance policy, it will only cover your personal belongings. It doesn’t extend coverage to your roommates, unless they are a direct relation like a sibling, and included on the policy as a named insured.
With renters insurance, you will typically get reimbursed for items that get damaged or destroyed based on actual cash value (ACV) or replacement cost value (RCV). If you have an ACV policy, you will receive a check for the item’s depreciated value. If you have an RCV policy, you will be compensated for the item’s full replacement cost value. If you want the highest payout after a covered claim, choose a renters insurance company that offers RCV policies, as either a standard option or an add-on.
Budget may also be a consideration when shopping for renters insurance. Get renters insurance quotes from multiple companies and compare them to see which offers the lowest price for the type and amount of coverage you need. Additionally, you may want to look for renters insurance companies that have several discounts you can take advantage of, which will help you save on your policy.
If you own a pet, you’re responsible for their behavior, such as a dog or cat that causes damage to someone else’s property. While looking at renters insurance as a pet owner, you may need to seek out companies that offer coverage for pet owners. Some insurance carriers have stricter underwriting standards for applicants who live with a dog or cat. It may also be wise to consider purchasing higher liability coverage limits in case your pet causes damage or injures a guest.
Renters Insurance FAQ
Actual cash value policies may not provide enough financial coverage to protect your interests. Depending on the age of your personal belongings and the cost to replace them with a new version, an ACV policy that takes depreciation into account for a payout may leave you with higher out-of-pocket costs. Replacement cost value policies do not depreciate the value of your personal property, meaning you will likely be able to replace damaged or stolen items at full replacement value with your insurance payout.
Each company varies in coverage options, discounts, and customer service, meaning the best fit for one renter will vary from another. To find the best provider for you, take some time to shop around and compare renters insurance quotes.
Because renters insurance premiums are personalized, the cheapest rate for your situation will depend on which company you select, what discounts you qualify for, and your exact address. In addition, your rate may be impacted by your insurance-based credit rating and other factors. For this reason, experts recommend you get quotes from several different companies, to see who offers the best premium for your circumstances.
Based on the national average cost of renters insurance, you may expect to pay around $14 a month, according to the latest available data from the Insurance Information Institute. However, you might be able to pay less if you have a good credit score, have no prior insurance claims, and are able to take advantage of multiple discounts.
We evaluated renters insurance companies based on availability, customer satisfaction, financial stability, and coverage to create our best renters insurance reviews. To compare renters insurance companies with other providers across the board, we focused on the following:
- Coverage: The more options a renters insurance company has for insurance add-ons and coverages, the higher it scores in our methodology.
- Customer Experience: We reviewed the National Association of Insurance Commissioners’ National Complaint Index and compared each renters insurance company’s complaint rating.
- Customer Satisfaction: With J.D. Power’s 2021 Home Insurance Satisfaction Study, we assigned a score to each company based on the rating it received.
- Financial Stability: Reviews.com utilized AM Best ratings to assign a score based on each renters insurance company’s financial stability.
- Discounts: We scored each renters insurance carrier based on the number of discounts advertised on its website.