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What Affects Renters Insurance Premiums?

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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 Choose the Best Renters Insurance ]

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 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 — will 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, pay the lowest 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.

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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 ]

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.

State Average 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.

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.