How much would you lose if there was a fire or theft in your rental unit? Do you have enough money saved to replace your valuables in such an event? Do a quick tally of how much money you’d need to replace your laptop, TV, home electronics, jewelry and any other valuables. Renters insurance only costs between $15 and $30 per month on average. It’s cheap considering how much you have to lose if something goes wrong.
Rental insurance covers your personal property against damage or loss from theft, fire, water, wind and hail. How much is renters insurance? Policies can vary in price depending on the insurer, the dollar amount of the valuables insured, size and condition of the rental, property location and other factors.
How much is renters insurance in my state?
Here are the most expensive and cheapest states for renters insurance.
Most expensive states
|Rank||State||Average Annual Cost|
|10||Massachusetts, New Mexico, New York||$198|
Least expensive states
|Rank||State||Average Annual Cost|
|4-6||Iowa, Nebraska, Utah||$141|
Factors that influence the cost of renters insurance
Here’s a quick-reference guide showing factors that can affect the renters insurance cost and ways you can save on your premium.
Renters insurance costs you can’t control:
- Rental’s condition
Renters insurance costs you can control:
- Bundling insurance policies
- Cash value vs. replacement cost
- Equipment like smoke detectors and home security systems
- Paying your premium in full vs. monthly
How can I lower my renters insurance?
Although renters insurance is cheap, saving a few dollars per month adds up after a while. Let’s look closer at the rental insurance factors listed above that you can control to save money.
Bundling insurance policies
If you also have other insurances like auto or life insurance, bundling all your insurance policies with one insurer can bring you a discount across the board.
Cash value vs. replacement cost policy
A cash-value policy means your insurer will pay what your property costs if you have to go out and buy a new replacement that day. An actual-value policy reimburses you based on the lost or damaged items’ current value. Cash value policies are more expensive. But if you have a lot of electronics, an actual-value policy is not worth the small savings, since TVs, computers and other electronics lose value fast.
The deductible is the amount you have to spend out of pocket before your renters insurance kicks in. The higher the deductible, the cheaper the renters insurance cost. Set it too high and you may not be able to pay it in an emergency. If it’s too low, you’re paying extra money in premiums every month.
We compared quotes from Geico.com for an apartment in Chicago (ZIP code 60657) for rental insurance covering $20,000 in property and $100,000 in liability. Here’s how raising the deductible affected the price:
|Deductible||Annual Insurance Price||Monthly Payment|
Based on our comparison, putting the amount of the deductible away in a savings account and paying for the highest deductible can save you $15 per year. If you have a higher-value property amount, the savings can be greater.
Equipment like smoke detectors and a home security system
Adding safety and security equipment deters thieves and notifies you, your neighbors or a monitoring service of events like smoke, fire or water damage before they go too far. The sooner flooding or smoke is discovered and stopped, the less expensive the damage. Some insurers reward you for these preventive measures by offering small discounts.
Paying your annual premium will bring you a small discount and save you from having to manage another monthly bill. Most insurers will refund you the portion of the policy you haven’t used if you cancel before the year is over.
Property value limit
The biggest expense you can control in your renters insurance is the dollar amount you’re covering your property for. Reducing the amount will also reduce your premium, but make sure you’ve included enough to cover the cost of replacing your most valuable personal property.
Going back to the Geico comparison quote, here’s how changing the property value limit affects the policy’s price using a $250 deductible and $100,000 in liability insurance.
|Property value limit||Annual price||Monthly price|
Keep these factors in mind when shopping for renters insurance, and remember to always compare quotes.