Understanding the Costs: How Much is Renters Insurance?

Posted on May 29, 2019

If you're a renter, you're responsible for keeping your belongings protected. Whether it's an unexpected leaky pipe or fire, or your home has been burglarized, renters insurance can ensure that you get repaid for the replacement cost of most of your things.

Before you decide on a policy, How Much is Renters Insurance, and what exactly will it cover? Read on to discover the cost of this helpful insurance and how it can help you get peace of mind as a renter.

So How Much is Renters Insurance?

On average, the monthly cost for renters insurance is around $20. This price can depend on several factors including your location, the size of your home, and how many people are covered. 

In general, this insurance should not cost you more than $30-$35 per month unless you're paying for something supplemental like covering fine art, jewelry, or antiques. The average cost hovers between $15 and $20 per month for most renters.

Some companies will offer you a discount after you've had their insurance for some time. This means your rates could decrease over time as long as you don't file a claim.

If you already have auto insurance, check with your provider to see if they offer a bundled price. This could save you even more money and make it easier since you can simply make one monthly payment for everything at once.

What Does Renters Insurance Cover?

In general, renters insurance is designed to cover the cost of replacing your belongings in the event of damage or theft. This type of insurance will not cover the structure that you live in. That portion is the responsibility of your landlord, who should have homeowner's insurance already in place.

If you happen to become displaced due to an event like a fire, your renters insurance should also cover the cost of a hotel room until you either move back into your old place or find a new one. When it comes to liability, ask about this coverage.

Liability will cover the cost of someone who happens to get injured while on your property. For example, if your friend comes over and falls down the stairs and breaks a leg, your renters insurance should give them a set amount to cover their medical costs.

While this form of insurance isn't quite as comprehensive as homeowner's insurance, it's extremely important to have. You don't want to be stuck buying a new computer and new furniture if your place burns down. For a small monthly rate, it's certainly worth it to have peace of mind.

How is the Cost Determined?

There are several factors insurance companies will examine before they give you an accurate rate. These factors include:

  • Your location: The insurance company will look at your zip code which will give them a snapshot of the crime and natural disasters in your area. The lower frequency that these incidents occur, the lower your rate will likely be.
  • Your credit score: A quick check of your credit score gives the insurance company an idea of how reliable you are in terms of payment. These types of checks are common with almost all forms of insurance.
  • The type of home or building you live in: From a high-rise apartment to a standalone house, the structure you rent plays a role in your rates. For most apartment dwellers, the rate will be lower since it's more difficult for a criminal to break in than it would be in a standalone home.
  • Pets: Your pooch could be a liability if he's considered a "dangerous breed." Since some dogs tend to bite people more often than others, your rates could rise if the insurance company sees this as a liability.
  • Your stuff: If you have simple things like clothing and household goods, expect your rates to be average. However, if you own a lot of custom artwork, musical instruments, and fine jewelry, those rates could be higher.

Each of these factors will help the insurance company determine what your rates should be. Overall, you can still expect them to be affordable and within the $20-$30 per month range.

Sometimes you may be asked to disclose your past insurance history. Companies are on the lookout for customers who frequently file claims, as this raises a red flag of the potential for new ones in the future. This type of customer is known as "high risk," and it could result in higher claims at least temporarily.

What are the Most Common Causes for Claims?

The insurance company will have you file a claim if certain events occur that would cause damage to the things you own. These claims can include:

  • Burglary or theft: If your home or apartment has been burglarized and things are missing, your renters insurance should cover it. You'll need to file a police report as soon as possible and catalog everything that is damaged or missing. Some policies also cover items outside your home such as yard decor on the front porch or your valuables that were stolen inside your vehicle as long as it was parked in front of your property.
  • Fire: Whether it's a cooking calamity or a knocked-over candle, your renter's insurance will cover replacement costs for items damaged in a fire. Keep in mind that the replacement cost may not be exactly what you paid for the items since insurance companies typically go by current market value.
  • Water damage: If you've run off to work and a pipe bursts, water can wreak havoc on your stuff. Renters insurance will cover water damage as long as it's not due to a flood caused by nature. Flood insurance is an entirely different situation and is usually purchased by the property owner.
  • Accidents: If a guest in your home gets hurt on your rental property, your insurance should cover the costs of their medical bills. Be aware that it usually does not apply to you, however, but only to people who are visitors in your home.

Helpful Tips

Whenever you move, start a detailed list of your most valuable items. Keeping a good inventory will give you more power in the event that you need to file a claim.

Jot down the serial number of important things like your television set, computer, and other small electronics. Write down in detail other items such as collectibles including the name of the item and if it's still in the box.

The more detailed you can be, the better off your results will be when you have to make a claim. Take pictures of your items too, as these can serve as proof if you don't still have the receipts.

Check your policy occasionally to be sure that the current limits are up to your standards. If you end up buying a lot of new and expensive items, you might want to call your renters insurance company to make sure you have enough coverage.

Do your homework before you commit to an insurance company by reading reviews of other customers or by asking friends and family for recommendations. It's essential to have an accurate snapshot of how good they are at processing claims and how easy they are to deal with.

Keep in mind that getting your money will take some time. Keep all receipts of costs associated with your plights such as hotel and food costs. This will give the insurance company the information they need to repay you.

How to Get Lower Rates

There are some things you can do to get the lowest rate possible like installing cameras or burglar alarms in your home or apartment. You can also be proactive by making sure your place is well-lit at night to avoid potential burglary.

Doing a few simple things like adding deadbolts to your doors will improve your chances of getting a better rate. In addition, the longer you go without filing a claim, the better the odds are that your rates will slowly be lowered.

If you downsize or move to a new, safer zip code, alert your insurance company so they can reevaluate your current rates. Just like auto and home insurance, where you live has a big impact on the cost of coverage so you might be eligible for a discount.

Stay Armed with Information

Now that the question of How Much is Renters Insurance has been answered, you'll be better prepared when you sign up for your policy. From installing cameras to keeping accurate logs of your belongings, this important insurance will give you peace of mind and help make things right when things go wrong.

For more information about other insurance topics, or to get a renters insurance quote, be sure to visit our website. 



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