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How Much Is Renters Insurance?

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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...

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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...

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Reviewed byJoel Ohman
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UPDATED: Mar 13, 2020

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renters

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. Think again.

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.

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?]

Just Tell Me the 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, construction of your premises, the dollar amount of items you want to insure, 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.

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.

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.

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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