What Affects Renters Insurance Premiums?

Renters insurance premiums are more affordable than many other types of insurance. However, the cost of renters insurance can vary significantly between individuals. Renters insurance companies use factors like your state, age and credit score to determine policy rates. That means you and your best friend across town might pay different prices.

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    If you’re in the market for renters insurance, it’s important to know what factors will affect your premium. Keep in mind that you can change some of these factors to get a lower premium if you are shopping for renters insurance on a budget. 

    [ Read: How To Buy Cheap Renters Insurance Online]

    In this article

      What is a renters insurance premium?

      A renters insurance premium is essentially the cost of your insurance policy. It includes the price of standard coverage, like personal property coverage, plus any endorsements you add, like flood insurance. Renters insurance premiums are typically calculated as an annual or biannual rate, but many people choose to pay their premium in monthly installments.

      Renters insurance premiums get paid to the insurance company that underwrites your policy. Your renters insurance premium will stay the same for the duration of the policy’s term, usually that’s one year or six months. But when the policy is up for renewal, your premium can increase or decrease. 

      What are the main factors that affect renters insurance cost?

      There are a variety of factors that will affect your renters insurance price. Here are some of the most common ones.

      Location

      Your location has a huge impact on your renters insurance premium. Renters insurance is more expensive in some states, and cheaper in others. You’ll see that in the next section when we look at the average cost of renters insurance for each state. Additionally, your ZIP code will impact the price. Renters insurance tends to be the most expensive in areas with a high crime rate and theft rate. Insurance can also be pricier in areas that experience severe weather.

      Age

      Your age will impact your renters insurance premium to a certain degree. Younger people tend to pay higher rates for renters insurance than older people. So if you’re a recent college grad who just moved into the city, expect to pay more than a retiree who’s renting an apartment in Florida. Insurance companies believe that age is linked to risk, so young renters are charged higher premiums to offset potential claims and losses.

      Credit score

      Almost every insurance company will look at your credit score to calculate your renters insurance premium. The higher your credit score is, the lower your renters insurance costs will be. The opposite is also true — renters who have a poor credit score will usually pay higher-than-average premiums. Improving your credit score is one of the best ways to get a cheaper premium and save some money on your policy.

      Claims history

      Renters who have filed insurance claims in the past — even small personal property claims — may pay a higher rate for their renters insurance. Renters who have never filed an insurance claim, or have no claims on the record within the last several years, typically pay lower rates. From an insurance company’s perspective, renters who have a history of claims are more likely to file additional claims in the future, so they offset their risk by charging a higher price.

      Find the Best Renters Insurance

      Save money on renters insurance with our simple comparison tool.

      Matching you with providers.
      We found results in
      Click at least 2-3 companies to find the very best rate.

        Powered by HomeInsurance.com (NPN: 8781838)

        America’s top-rated renters insurance

        • Policies starting at just $5/month
        • Sign up in seconds, claims paid in minutes
        • Zero hassle, zero paperwork

        Type and amount of coverage

        Renters insurance is worth it for most people, but it doesn’t cover everything. You might need to customize your policy with endorsements to fill gaps in coverage. If you buy endorsements, like flood insurance, valuables coverage or earthquake insurance, you’ll pay a higher rate. Similarly, the amount of coverage you purchase will affect your rate. The higher your coverage limits are, the more expensive your premium is going to be.

        Deductible

        Every renters insurance policy has a deductible, which is the out-of-pocket cost you pay toward a covered loss before the insurance company will reimburse you. The higher your deductible is, the lower your insurance premium will be. Many renters choose a higher deductible to save money, but remember that you are responsible for the deductible. If you do need to file a claim, you should be able to comfortably afford the out-of-pocket cost.

        [ Read: Raising Deductibles to Save Money on Insurance: Does It Work? ]

        Discounts

        Discounts are another factor that impact renters insurance costs. Most insurance companies offer discounts that can help you save money on your policy. The more discounts you qualify for, the cheaper your premium will be. If you’re looking for a cheap renters insurance policy, search for insurance companies that offer multiple discounts you can qualify for. Common renters insurance discounts are being claims-free, paying your premium in full, having good grades and bundling your policies.

        [ Read: Here’s How to Bundle and Save on Your Insurance ]

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        What’s the average cost of renters insurance for each state?

        As mentioned, the cost of renters insurance varies by state. The average cost of renters insurance in the United States is $179 annually, which breaks down to just under $15 per month. The table below includes the average annual renters insurance premium in all 50 states plus Washington D.C.

        StateAverage Annual Premium
        Alabama$222
        Alaska$175
        Arizona$175
        Arkansas$211
        California$178
        Colorado$164
        Connecticut$188
        Delaware$157
        Florida$185
        Georgia$214
        Hawaii$181
        Idaho$152
        Illinois$166
        Indiana$172
        Iowa$144
        Kansas$172
        Kentucky$166
        Louisiana$234
        Maine$149
        Maryland$161
        Massachusetts$191
        Michigan$185
        Minnesota$140
        Mississippi$252
        Missouri$179
        Montana$147
        Nebraska$149
        Nevada$182
        New Hampshire$148
        New Jersey$160
        New Mexico$186
        New York$189
        North Carolina$158
        North Dakota$126
        Ohio$169
        Oklahoma$236
        Oregon$161
        Pennsylvania$157
        Rhode Island$185
        South Carolina$184
        South Dakota$127
        Tennessee$195
        Texas$225
        Utah$155
        Vermont$153
        Virginia$152
        Washington$160
        Washington D.C.$157
        West Virginia$189
        Wisconsin$143
        Wyoming$146

        We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

        Help is here for renters amid the COVID-19 pandemic

        In response to the Covid-19 pandemic, many insurance companies provided relief in the form of percentages back on monthly bills as well as a freeze on coverage cancellations due to inability to pay. While it’s not recommended, you could technically stop your coverage to save money if absolutely needed — but again, it’s strongly advised against.

        See below for more details on how you can benefit from the recently approved economic relief act:

        Who can benefit from this?

        To qualify for rental assistance under the CARES Act at least one household family member must qualify for unemployment or have a significant income lost due to the pandemic. Income must fall at or below 80% of your county’s average income. You must also be a risk of homelessness. 

        Who’s getting how much?

        If families fall below 50% of the average income they’ll be given priority for rent relief funds. Families can get up to a year of rent covered, and three months in the future with the CARES Act rent relief assistance.

        How to apply

        If you need to apply for assistance, the way you do that will vary depending on where you live. If your city or town has an existing rental assistance program, you’ll likely use that to apply for new aid.

        You can contact your local housing authority, nonprofit groups or reach out to your local representatives to find out where and how to apply. Your landlord may also be able to apply for you — but they’ll have to get your approval and signature before doing so.

        Elizabeth Rivelli

        Contributing Writer

        Elizabeth is a contributor to The Simple Dollar, where she reviews insurance providers and policies. She has more than three years of experience writing for top online insurance and finance publications, including Bankrate, Coverage.com and Reviews.com.