A Look at Renters Insurance Costs

Thinking about buying renters insurance but not sure if it’s worth it? Here’s what it typically costs.

Written by Lindsey Danis / January 21, 2022

Quick Bites

  • Your landlord may require renters insurance, but even if they don’t, it’s still a good idea to have a policy.
  • The average cost of a renters policy is $15 to $30 a month, but various factors can impact that amount.
  • Just because you don’t own your home doesn’t mean you won’t be held responsible if someone gets hurt there; liability coverage helps protect you.
  • Doing a thorough inventory of your belongings will help you estimate how much renters insurance you should get.

Renters insurance is a smart idea if you rent, as it protects you and your possessions from a range of potential bad outcomes, including theft and damage. Yet this insurance does represent an additional monthly expense on top of your rent, utilities and other costs of living. If your landlord doesn’t require you to purchase renters insurance, you might be wondering if it’s really worth it to buy coverage, or how much renters insurance typically costs. 

To help you decide what’s best for you, here are answers to common questions about renters insurance, including the average cost per month in the U.S. 

Inside this article

  1. What is renters insurance?
  2. Why you need it
  3. How much is renters insurance?
  4. How much insurance do you need?
  5. Where to get it

What is renters insurance?

Renters insurance provides two important levels of protection for renters. 

First, it covers the cost to repair or replace personal possessions that are stolen or damaged, for example by a burst pipe. 

Second, it provides liability protection. If a guest is injured while at your rental, or if their property is damaged while they’re visiting, renters insurance can cover you.

Why you need renters insurance

If renters insurance is required by your landlord, you don’t have a choice about whether to purchase a policy. Let’s assume your landlord doesn’t require you to carry this coverage. Why would you need renters insurance? 

There are two main use cases, as mentioned above: personal liability from injury or property damage and the ability to repair or replace your stuff in the event of a theft or other incident. 

Generally, renters insurance policies will cover damage from things like fires, floods, burst pipes or storms. If your ground-floor apartment were to flood after an intense rainstorm, renters insurance would pay for you to replace furnishings and personal property that were damaged by the floodwaters, for example. 

Policies vary in the type of events they cover. If you live somewhere that’s prone to a certain type of disaster, such as wildfire or hurricane, you’ll want to read the fine print to make sure your policy covers you against the type of threat that is most likely to occur. 

How much is renters insurance typically?

The National Association of Insurance Commissioners (NAIC) estimates the average rental insurance cost per month is $15 to $30.[1] 

Knowing the average rate will help you understand where your quote falls, but it may be more helpful to understand the variables that impact policy prices. 

According to NAIC, three main variables impact rental insurance cost per month:

  • Your location: Prices are higher in some states than others.

  • Your apartment’s size: The bigger your rental unit, the more you can expect to pay on average. 

  • Your coverage level: If you have a lot of belongings (or expensive belongings), or you want peace of mind in terms of personal liability, then you’ll want to increase your coverage. Obviously, as coverage increases, so does your rate. 

Coverage rates tend to be higher in areas that are prone to natural disasters, including in the southeastern U.S., where floods and hurricanes are frequent. Coverage costs less in states that have fewer weather-related incidents, like Maine, Minnesota and Wisconsin, according to state-by-state premium rates.[2]

How much renters insurance do you need?

The best way to figure out how much renters insurance you need is to estimate the value of your possessions. This might include things like: 

  • Furniture and home goods

  • Clothes

  • Jewelry

  • Electronics

  • Other personal possessions (things like artwork or fitness equipment)

Inventory what you own. Assign everything a value. Then add it all up to get a coverage amount for your personal property. 

It is in your best interest to have a level of coverage that is adequate for your possessions in order to take advantage of this insurance in case you need to file a claim, so be thoughtful and diligent when estimating these costs. 

Is $10,000 enough for renters insurance personal property coverage? Ultimately, that’s up to you to decide. If you live a minimalist lifestyle, consider yourself a bargain hunter or rent a room in a furnished apartment, that might be enough for you. If you have an expensive computer, nice bike, LCD television and other expensive toys, then $10,000 probably won’t cut it. 

Renters insurance provider Lemonade shares another way to determine the appropriate amount of coverage: Ask yourself how much it would cost you to replace everything you own in a worst-case scenario where your home was destroyed. Assume you’d need to purchase all-new furniture, clothing and so on. Then select that level of coverage for personal property.[3] 

If someone was hurt while at your home, they could sue you. Liability coverage offered under your renters insurance protects you up to a certain dollar amount, which means you’ll also need to choose how much coverage you want. It’s tricky to determine how much coverage to choose, because you hope to never need it. Here again, Lemonade advises a worst-case-scenario line of thinking. If someone was hurt and you had to pay their medical bills, how much coverage would give you peace of mind? 

Tip: If your landlord requires you to purchase renters insurance, they may specify the amount of coverage you need to carry. This can be helpful as it takes the guesswork out of the equation. You’ll just get the minimum they require unless you want more coverage, in which case you’ll use one of these strategies to determine how much renters insurance you need. 

Where to get renters insurance

Here are some major renters insurance companies. Compare premiums and coverage from several companies to see which gives you the best deal.  

  • Allstate

  • Amica

  • Assurant

  • Lemonade

  • Progressive

  • State Farm

  • Toggle, which is affiliated with Farmers

If you purchase another type of insurance, like auto insurance, check whether your insurer also does renters insurance. Sometimes you can save money by bundling, which means purchasing more than one policy from the same insurer. 

As we mentioned, the cost of renters insurance is determined by the size of your apartment, your location and the relative value of your personal possessions. These variables are pretty fixed unless you decide to downsize into a smaller apartment or Marie Kondo your belongings in anticipation of getting a better price quote. 

Get at least three quotes for renters insurance, then compare the policy costs and coverage. Finally, select the policy that best meets your needs. 

Take your time when shopping for renters insurance. Make sure you understand what’s covered in addition to the renters insurance cost per month of a policy. This way, you’ll have peace of mind knowing that your coverage is sufficient to meet your needs should something happen. Never settle for a cheap renters insurance policy that doesn’t fully meet your coverage needs. There’s no use in saving a little bit up front if your policy won’t actually pay out enough for you to replace stolen or damaged items.

Article Sources
  1. “For Rent: Protecting Your Belongings With Renters Insurance,” National Association of Insurance Commissioners, https://www.naic.org/documents/protecting_your_belongings_with_renters_insurance.htm.
  2. Liz Knueven, “The average cost of renters insurance,” Business Insider, https://www.businessinsider.com/personal-finance/average-cost-renters-insurance.
  3. “How Much Renters Insurance Do I Actually Need?” Lemonade, https://www.lemonade.com/blog/how-much-renters-insurance-do-i-need.

About the Author

Lindsey Danis

Lindsey Danis

Lindsey Danis is a writer covering food, travel and personal finance. She's written about personal finance for Business Insider, NextAdvisor, The Penny Hoarder, and elsewhere.

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