Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 21, 2021

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Insurance Q&A: “How much is renters insurance?”

To make a long story really short, it’s cheap. Very cheap.

Cheap also happens to be the word used to describe those who rent and don’t purchase a renters insurance policy…or silly, to put it mildly.

Many renters MISTAKENLY assume their property and liability exposures are covered by their landlord’s insurance policy. Some just don’t think about it at all. This can be a very costly mistake. Even a small flood, earthquake, or other disaster could destroy all your belongings. You might be surprised at how quickly the costs add up.

If you don’t have a renters insurance policy and your apartment burns down, you’ll be at the local mall the following morning re-purchasing everything you own(ed) the day before. You may not be able to replace everything.

Also, if someone suffers bodily injury or property damage as a result of your negligence (someone slips and cracks their head open during your Final Four Beer Bash or your Avon party), sues you and wins, you’ll be writing a check for the damages. This is assuming you have cash sitting in an account for just such a day. 

[Is renter’s insurance required?]

How much does renters insurance cost?

Okay, okay, we’ll stop lecturing you and give you a ballpark price.  After all, that’s why you came here, right?

While your exact insurance premium is going to depend on a variety of personal factors as well as the location, the dollar amount of items you want to insure, any expensive items you want extra coverage for, and how comprehensive the type of coverage, it is safe to bet you can obtain coverage for a few hundred dollars per year. 

Your average “apartment renter” may see coverage as low as $200 and maybe as high as $400 per year. We’ll call it $250 for average credit, $25,000 property coverage and $100,000 in liability coverage.

The National Association of Insurance Commissioners (NAIC) says the average cost of renter’s insurance is only $185 per year, or roughly $15 a month. Talk about incidental. If you live in an apartment that requires renters insurance, you may even get a special deal on policies that offer things like security deposit coverage as long as you meet certain requirements. The cost of renters insurance does not actually go up for these policies. You just have to live in the right building.

But be sure to shop your premium with a local independent insurance agent to be certain you aren’t paying too much. If you only inquire with your existing auto insurance provider, you may overpay, even with a bundling discount factored in.

And ask for an all risk coverage form to ensure you are covered against the most causes of loss possible (Named Perils vs All Risk).  After all, what good is insurance if it’s full of exclusions. The good news is the average insurance company is not out to trick you. The average renters policy is pretty straightforward.

Finally, don’t sign on the dotted line until you verify your renter’s policy includes coverage against theft and water back-up.

Both are common causes of loss for property owners that are not necessarily included on the basic policy. They can cover your belongings and medical bills even when you’re on the road. Some policies also cover additional living expenses if you cannot live in your home for a short period of time.

Tip: A personal liability umbrella, which covers you against extreme liability losses, is the only policy considered to a better value than the renter’s insurance policy.

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Is the cost of renters insurance worth it?

A little renters insurance goes a long way. Many policies have $10,000 in personal property coverage and much more for $200 a year, sometimes less. College students who live in dorms may still be covered by their parents’ homeowners policy. You should always check with your insurance company. You don’t want to find out you don’t have coverage when trying to file a claim.

No matter your age or living situation, the average cost of renters insurance remains very reasonable. Just get a few quotes and see for yourself.