Posted July 30th, 2019 by Jason Metz
If you’re renting an apartment or house, it’s a good idea to shop around for cheap renters insurance. Renters insurance costs an average of $15.42 a month nationwide, according to the National Association of Insurance Commissioners’ (NAIC) 2018 home insurance report.
What factors affect renters insurance rates?
Renters insurance rates will vary depending on several factors. Below are some of the most common.
Areas that have high crime rates or are prone to natural disasters (such as tornadoes or hurricane wind damage) typically pay higher rates. See our interactive map below to find out the average price for renters insurance in your state.
Type of residence
The type of residence you're renting can be a factor in renters insurance rates. Apartment buildings can have less expensive renters insurance rates than single-family homes, condos and duplexes. Older homes also tend to have higher rates. For example, if an older home has aging pipes, the potential for water damage is higher.
The amount of coverage you choose
The higher coverage amount you choose, the more you can expect to pay for renters insurance. Choose an amount that would be enough to replace your belongings if you lost everything in a fire, for example.
The amount of the deductible
A deductible is the amount that’s deducted from a claims check. If you choose a lower deductible amount, you’ll pay higher renters insurance rates. For example, choosing a $500 deductible is a little more expensive than choosing a $2,000 deductible.
How you choose to get reimbursed if you file a claim
Renters insurance companies typically offer two ways to get reimbursed if you file a claim:
- Actual cash value, which reimburses you for the depreciated value of your items, not new items, up to the policy limits.
- Replacement cost, which reimburses you for the cost of new items, up to the policy limits.
Replacement cost coverage is typically more expensive than actual cash value, but it also gives you better coverage.
Your claims history
You could pay higher rates if you have a history of making renters insurance or home insurance claims.
Your credit history
Insurance companies might use your credit history when setting renters insurance rates because they have correlated poor credit scores with a higher risk of filing an insurance claim.
How can I get cheap renters insurance?
Here are some common ways you can save on your renters insurance.
Only buy the coverage you need
It’s a good idea to buy enough insurance to replace your personal property in a worst-case scenario, like a fire or tornado. The average value of a renter’s belongings, based on a standard two-bedroom apartment, is $30,000, according to Allstate. That’s a good starting point, but you’ll want to calculate how much you’ll need to replace your specific belongings.
Here are two ways to get started:
- Make a home inventory, which is a record of what you own and the cost to replace each item.
- Use an online calculator such as Allstate’s What’s your stuff worth estimator.
Choose a higher deductible
By choosing a higher deductible, you can lower the premiums because a claims check will be less if you need to make a claim.
Don’t make insurance claims for small problems
If possible, keep your renters insurance claims record clean. You may want to pay for small damage to your belongings out of pocket. Making claims for small problems can cause a rate increase at renewal time.
Ask your agent about discounts
One of the best discounts is by “bundling” your renters insurance auto insurance when you compare car insurance rates. You may qualify for other discounts, such as a home security discount or a price break for using automatic payments.
Compare renters insurance quotes from different companies
It’s a good idea to compare renters insurance quotes among several different companies to find the best prices.
Is it worth it to get renters insurance?
It’s worth getting renters insurance if you want coverage for your personal belongings. Renters insurance also covers your liability in case someone gets hurt and you’re to blame, or you accidentally damage someone else’s property. And don’t forget that additional living expenses coverage helps if you can’t live in your apartment because of a problem covered by the policy, such as fire damage.
Don’t rely on a landlord’s insurance. The landlord’s insurance will pay for damage to the building structure, but not your personal belongings. For example, if there’s a fire, your landlord’s insurance will pay to repair the building but won’t cover your furniture, clothes, valuables or any extra expenses (like a hotel) if you have to temporarily move.
Read more: What does renters insurance cover?
What is a good price for renters insurance?
Renters insurance costs an average of $185 a year, according to the NAIC. Your cost will depend on where you live, how much coverage you buy and other factors.
Read more: How much is renters insurance?
Does everyone in my apartment need renters insurance?
Renters insurance covers the people listed on the policy. If your roommate is not listed as an “additional insured,” their personal belongings will not be covered by the policy. Depending on your insurance company, additional insureds need to be domestic partners, spouses, family members and dependents such as a foster child, meaning your roommate might have to get their own policy.
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