Finding the best renters insurance rates for yourself and saving some money depends on many factors. This post explores what goes into rental insurance premiums, average prices, and how to find the best cheap renters insurance quotes.
What Determines The Cost of Renters Insurance?
As we have established a bit of a standard for renters insurance policy premiums, it’s helpful to look into what exactly goes into these rates.
Your quotes may be below or above the national average, and you may want to know why that is.
As is the case for other types of insurance, a variety of factors go into your insurance policy premiums. Some of these are just circumstantial, while others are customizable.
Rental Insurance Factors You Can Control
- Coverage amount - The rental insurance coverage you want for your belongings directly relates to how much you will pay in rental insurance premiums. The more rental insurance coverage you want, the more expensive the premium. Most of the price will come from expanding personal property coverage. Suppose you have more valuable items and want that drastic amount of coverage. In that case, you’ll have to make more room in your rental insurance budget. If you wish to tack on any renters insurance policy add-ons, such as water and sewer backup coverage, that will cost you, too.
- Deductibles - How much you’re willing to pay yourself in the event of a tragedy directly affects your renters insurance rates. As a general rule of thumb, the higher the renter insurance deductible, the lower the rental insurance premium, and vice versa. But don’t just start raising your rental insurance deductible to pay less every month. If something happens and you cannot pay the renters insurance deductible, that can lead to severe issues.
- Claim history - While this is never entirely under your control, being a mindful renter can help reduce the number of rental insurance claims you make to your insurance company. The fewer rental insurance claims you file, the lower the renter insurance policy premiums. Insurance companies will see you as less of a risk as a renter insurance claim affects rental insurance policy premiums.
- Credit score - A bit controversial, insurance companies consider your credit score when offering you rental insurance coverage. You may have lower renters insurance premiums if you are financially responsible. It is best to keep this in mind and to always stay on top of any payments.
Renters Insurance Factors You Cannot Control
- Location - What state you live in significantly affects your renters insurance premiums. The general idea is that states that experience more extreme weather will have higher renters insurance rates. This practice extends even further, such as cities and zip codes. If your neighborhood has a higher crime rate, you will be paying more for your renter insurance coverage. The only way to have complete control over this is to move, which can be a bit costly for renters insurance.
- Value of belongings - Sometimes, you can get lucky and control how much you own in some inventory. However, most likely, that is not realistic. You need some items, like computers or electronics, so that you can function in your daily life, and their value is out of your control. Renters insurance focuses a lot on your belongings, so their value is a significant factor in your annual renters insurance premiums.
- The building - This goes hand-in-hand with location, but the actual structure your apartment or condo resides in can affect your renters insurance rates. If you live in an older building that lacks security, you could be charged more for renters insurance. You generally do not have any say in these aspects. If you have that option, it is best to remember what your building is like before renting there.
How Much is Renters Insurance on Average by State?
Where you live has a significant impact on your renters insurance coverage rates. Factors such as consistently extreme weather and crime rates are taken into account by insurance companies. These events lead to more renters insurance claims, making some areas more high-risk than others. The following sections explain which states are the cheapest and where costs for a rental insurance policy may be higher.
Most Expensive States For Renters Insurance
Louisiana was the most expensive state for lower-level renters insurance coverage ($20,000 in personal property and $100,000 in liability), with an annual average rate of $388 per year. That ends up being about $32 a month to protect your belongings. This is because Louisiana is a coastal state and experiences some pretty harsh weather, especially during hurricane season. Mississippi and Oklahoma are other states the study found to be the most expensive. Oklahoma tends to see higher rental insurance rates as it is more prone to tornadoes.
Least Expensive States For Renters Insurance
Vermont is the cheapest state for renters insurance for lower coverage ($20,000 in personal property and $100,000 in liability), with an annual rate of $121 per year, or $10 a month. Even if you wish to expand coverage ($60,000/$300,000), Vermont still is the cheapest, with an average price of $218 per year. These rental insurance rates can be due to damaging weather being less common in Vermont. Other states with lower insurance rates include Wyoming and North Dakota.
How Much is Renters Insurance on Average by Coverage?
What kind of renters insurance coverage and how much you need will significantly affect what you pay to protect your personal property.
A basic policy of $25,000 in personal property coverage may cost you about $18 a month or $216 annually. Personal property heavily influences how much your rental insurance rate will cost, so increasing this renters insurance coverage raises prices significantly.
If you calculate the value of your belongings, make an inventory, and find you need renters insurance coverage of around $55,000, your monthly rental insurance rate can be more like $32 a month. But none of this is for sure; this is just a general idea to show the renter insurance increase in price. Beyond personal property coverages, increased liability coverage can also affect your renters insurance policy price. It may be less dramatic, but it is still considered expanding rental insurance coverage.
There are also renters insurance policy add-ons that can protect your belongings in more specific tragedies, like other insurance types. Water and sewer backup coverage can be added to protect your valuables in the event of water damage.
High-valued items may only sometimes be covered as policies typically have a set limit for what they pay for. Adding electronic coverage will help protect expensive laptops or televisions if they are damaged. Some renters insurance policies may also offer identity theft coverage, which can help pay for costs related to restoring your identity.
Remember, the more you add to your rental insurance policy coverage, the higher your renters insurance premium rates will be. Take the time to look at your belongings, make an inventory, and weigh the pros and cons. Suppose you cannot afford to lose that state-of-the-art television. In that case, adding a couple of dollars to your monthly renters insurance costs can be beneficial.
What Does Renters Insurance Not Cover?
Renters insurance, like many other kinds of insurance, is limited to what belongings of yours it protects and the events from which it protects them. Your standard renters insurance policy will typically not cover catastrophes such as tornados, hurricanes, wildfires, floods, and earthquakes. You can look at add-ons if you are concerned about these events.
Renters insurance will also not protect an asset like your car, even if it’s stored within the building you are renting in. Even if damage happens when not in use, renters insurance will not cover it. Consider comprehensive coverage through your car insurance provider.
Some insurance companies will exclude home businesses from your renters insurance policy. You may want to watch out for this if you plan to open any business in your house, apartment, or condo. Unlike homeowners insurance, which offers it as an add-on, it may not be covered.
Roommates and their items will not be protected under your renters insurance policy. They will need their own renters insurance plan to have coverage for their valuables or be added to the rental insurance policy.
The apartment structure is another example of things excluded from your renters insurance policy. Despite it sometimes being considered in your renters insurance policy rates, damage to the building is not covered under your rental insurance. It is up to the landlord to obtain insurance for the building.
How Much Renters Insurance Should You Get?
After looking into what exactly renters insurance is, you may have a few things, like how much renters insurance you should have and what this security will cost you.
There are three types of coverage, but the main one is personal property coverage. This is the portion where you want to determine the value of your belongings and how much insurance coverage you will need. A standard renters insurance policy will help cover your personal belongings during fire, theft, vandalism, and other disasters, such as tornados, hurricanes, wildfires, floods, and earthquakes. Ideally, you want to have enough rental insurance coverage to replace all of your possessions in the event of a tragedy.
In terms of liability coverage, you want to consider the cost it would if you are sued due to someone getting hurt in your house, apartment, or condo or if you cause damage at someone else’s home. This coverage generally starts at $100,000, but it is recommended to go for $300,000 if you can cover the increase in renter insurance policy premiums.
It is better to be overprotected than to be underinsured. If that is not realistic, it is best to have a basic renters insurance policy plan; you should try to tack on any additional aspects to your insurance policy to ensure all your belongings will be safe.
Do You Need Renters Insurance?
Generally, yes. While it is not legally required by law, unlike car insurance, renters insurance still can be a vital element when it comes to protecting your belongings.
Renters insurance does not cover your apartment’s structure but the personal property you keep within it. It also aids you in cases of legal liability situations. Having insurance protection and security on your side when tragedy strikes will be extremely helpful. And, for the rates, it does not hurt to set aside some cash towards it every month.
Is Renters Insurance Worth it?
Yes, renters insurance rates are cheaper than other insurance policies, such as home insurance, which has a national average premium of $1,249 annually.
However, it has some setbacks, covering less than home insurance. But that is very understandable as you are not living on the property you own, and renters insurance is more focused on your personal belongings.
Your personal belongings are precious, and you need protection that treats them as such. Offering up to a couple of dollars a month in renters insurance coverage can save you some money in the future. Like any insurance, having some coverage will always be worth it.
How Can You Get Discounts on Renters Insurance?
While the cost of renters insurance may be reasonable, knowing what actions you can take to save a couple of bucks on your rental insurance never hurts.
The following sections explore different ways to get discounts on your renters insurance policy.
Bundling your Rental Insurance with other Types of Insurance
Much like bundling your home and car insurance, insurance companies let you bundle with renters insurance. This would mean receiving both your renters and car insurance under one insurance company.
This simple step saves you up to 10% on your monthly insurance premiums. If you are already paying for car insurance, it would not hurt to look into this. It can even sometimes be an easier way to organize your bills and stay on top of payments.
Shop Around for Renters Insurance Quotes
One of the most common ways to save money on insurance is to shop around. Getting renters insurance quotes from various insurance companies can help you find the best rental insurance.
Just remember not to pick an insurance company strictly based on the price and review the renters insurance policy coverage offered. Be sure to consider that before signing up with any insurance company. Remember to look locally and nationally, as smaller insurance companies may offer good renters insurance coverage at reasonable prices.
Installing Safety Features
Insurance companies may offer discounts on your renters insurance policy premium based on how many safety features your house, apartment, or condo has installed.
Installing features like smoke alarms and deadbolts can lower your renters insurance premium rates. You may also get a break on rental insurance rates by adding a fire extinguisher to your kitchen.
These little things show insurance companies that your home is safe and secure. When this happens, you are less likely to make a renter insurance claim for theft. For this, they give you a sort of “thank you” by decreasing your rental insurance premium rates.
Higher Credit Score
Bettering your credit score can be a big way to save some dollars on renters insurance policies. However, the process does take more time on average than other ways to save money.
A higher credit score tells insurance companies that your finances are stable and that you are less likely to make an insurance claim. Your renters insurance premium rates can decrease as your credit score goes up. Always stay on top of your payments and keep a good credit score. Having a good credit history can help in the long run.
Increase Renters Insurance Deductibles
Increasing your renters insurance deductibles can alleviate some of your monthly costs for renters insurance premiums.
Raising renters insurance deductibles tells your insurance company you will put out more cash in the event of a tragedy before they have to step in. While it can be a quick way to reduce rental insurance premium rates, you have to make sure you can pay for the renters insurance coverage you are promising.
Review Your Rental Insurance Policy
It can be beneficial to review your policy and ensure you still need the coverage you are paying for.
If, for example, you have sold some of your belongings, your value may have gone down, thus meaning you will not need such high personal property coverage.
Finding areas to adjust your renters insurance coverage plan can help save you money, but stay within what you realistically need to protect your stuff. Rental insurance can seem like a pricey preventative measure to take. However, you never know what the future is going to hold.
What’s The Best Renters Insurance Policy For You?
The best way to answer this question is to determine the value of your belongings by making an inventory and thinking about any future liability situations you could find yourself in.
Suppose you have a valuable collection of expensive electronics, computers, or jewelry. In that case, you should protect it.
If you have guests over frequently, look into having higher liability coverage. If anything happens to them in your house, apartment, or condo, you could be protected if they sue.
Also, remember to consider where you live. If you live somewhere prone to flooding, consider expanding your renters insurance coverage to stay protected. It will cost more but could be useful after natural disasters, such as tornados, hurricanes, wildfires, floods, and earthquakes. And remember to shop around for renters insurance coverage. Reviewing insurance company reviews can help you find the best price for your budget and save some money.
Shopping for Renters Insurance? Insurance Navy can help you out!
Contact Insurance Navy today to get started with your free rental insurance quote and see how affordable renters insurance coverage can be. Call 888-949-6289 or apply for a quote online.
