How Much Does Renters Insurance Cost?

by Team HomeServe
The agent fills out the renters insurance policy.

If you’re apartment hunting, you’ve probably noticed that one of the pieces you need before your landlord hands you your keys is proof of a renters insurance policy. While it’s not required across the board, many property owners or buildings want to see that you have some amount of insurance coverage before you can move in. The good news is that a yearly renters insurance premium probably costs less than the new TV you just bought or the living room set arriving next week.

This May Also Interest You: Homeowners Vs. Renters Insurance: What’s the Difference?

No one wants to experience a loss, whether through theft or a home disaster, such as a fire. But the average cost of renters insurance is worth every penny if these situations arise. Here’s what you need to know.

What’s the Average Cost of Renters Insurance?

Across the U.S., the typical monthly payment for renters insurance is often less than $50. According to the Insurance Information Institute, the average annual cost is $174. The cost of renters insurance depends on several factors. Your answers to the questions below can influence the price of your coverage.

Where Do You Live?

Where the policy is purchased is a significant part of the cost. For example, renters in areas that are regularly hit by hurricanes and other big storms can experience higher insurance costs. Additionally, policies cover theft — both at your home and, in many cases, your car. If you live in a high-crime neighborhood, the policy is likely more expensive.

What Coverage Level Do You Need?

This one's simpler to understand. The more coverage you need, the higher the annual cost. However, it's not advisable to choose a less expensive policy just to save money. People that experience a loss might find less coverage is actually more expensive in the long run.

Do You Need Medical Payment Coverage?

Medical coverage can help cover the cost of injuries to you or guests at your property. If you choose too low of a coverage amount, you might have to pay out of pocket for any expenses that exceed your policy.

What’s Your Deductible?

A deductible is the amount you need to pay out before your insurance company will pay a claim. A higher deductible typically results in a lower annual premium cost.

What’s Your Credit History?

Poor credit history may increase the average cost you have to pay for renters insurance. You may have to shop around for a company to find the best coverage.

How Much Should I Be Paying For Renters Insurance?

You need enough coverage to protect your lifestyle in the event of a loss. This amount varies from person to person. For example, a family of four has more insurance needs than a young, single person just starting their career. While you don't want to pay for too much coverage, it's better to be safe than sorry.

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How Much Is Renters Insurance for a House?

Many renters lease complete residential homes. You should know that renters insurance for such a property can exceed the price people typically pay for a small apartment. First, some good news: You might not need an expansive policy if you're covered under the owner’s home insurance policy.

Nonetheless, always check with the homeowner to determine what they require. Investopedia says you still might need a renters insurance policy to cover your personal belongings. However, the dwelling itself is covered by the owner's insurance.

How Much Does $300,000 of Renters Insurance Coverage Cost?

The minimum coverage for renters is often $20,000 (CAD 28,0000 property and $100,000 (CAD 140,000) liability. However, some experts recommend $300,000 (CAD 420,000) of liability coverage. The average cost for renters insurance with $50,000 (CAD 68,600) property coverage, expect to pay $235 (CAD 322) per year, according to NerdWallet. For $300,000 (CAD 420,000) liability coverage, you’re looking at about $191 (CAD 262) per year.

When you purchase a policy, take into consideration how much you need to replace if you experience a complete loss. That includes all clothing, household items and everything you've purchased and collected over the years. If you've just moved out on your own, your personal property may be valued at a small amount that $20,000 could cover. However, in many cases, people spend well over $20,000 on essential living purchases over the years.

Is Renters Insurance Cheaper Than Homeowners Insurance?

Renters insurance is different from homeowners insurance. A policy for a renter covers their personal items, liability and medical care in the event of injuries on the property. Homeowners insurance often covers all of that plus the physical dwelling, making the premium more expensive.

All CAD conversions are based on the exchange rate on the date of publication.