7 Factors That Impact Your Renters Insurance Cost - Experian (2024)

When you buy a house, most mortgage lenders require you to purchase homeowners insurance to cover any losses. If you're a renter, there's no legal requirement to have renters insurance—but getting it can save you significant sums should your belongings get stolen or damaged in a disaster.

Renters insurance not only reimburses you for these items, but it usually offers personal liability coverage. It might even cover temporary living expenses if you can't stay at the house following an emergency.

The average monthly premium for renters insurance is around $15, according to Experian data. However, rates can vary a bit; according to Progressive, their monthly renters insurance rates range from $14 to $30. But what causes your rate to be on the higher or lower end? Here are seven factors that impact how much you'll pay for renters insurance.

1. Your Coverage Limits

The more you want your renters insurance to cover, the more you have to pay. Your policy should be enough to cover the costs of replacing all of your personal belongings, from clothing to electronics to furniture.

You'll need to inventory and estimate the total cost of your possessions, and it's possible you'll have to pay a higher rate to insure everything. If you're on a tight budget, you can go for a smaller policy; you just might not receive enough money to replace everything in a disaster.

It's important to know that high-value items, such as fine jewelry, artwork, musical instruments and collectibles, are not typically covered in a basic renters insurance policy. If you want coverage for these costlier items, you may need to add a floater or rider to your policy for an additional fee.

2. Your Deductible

If you've ever had to select a health insurance plan, you'll be familiar with how insurance deductibles work in tandem with premiums. It's the same concept when you get renters insurance: the lower your premium, the higher your deductible. That's because you're paying less into your policy, so when you do make a claim, you have to pay a sizable amount first (your deductible) before the insurer pays up.

On the other hand, you may have the option to pay a higher premium in exchange for a lower deductible. This means you spend more monthly (or annually), not knowing if you'll get it back. But if you do file a claim, you won't owe as much out-of-pocket for the deductible before getting your insurance money.

As you compare renters insurance plans, make sure to pay attention to the deductible, and know that adjusting it can impact your rates. Ultimately, your choice will depend on whether your budget is best set up to pay more over time, or at once when a claim is filed.

3. Where You Live

Insurance is all about risk, so customers that live in areas with higher risks of claims usually have to pay more for coverage. Some location-based factors that impact renters insurance rates can include:

  • The rate of crimes, especially theft, in your ZIP code
  • The weather and climate in your area, since locations prone to fires, storms and hurricanes are riskier
  • The age and condition of the property you live in

Renters insurance tends to be more expensive in Southern states—such as Louisiana and Mississippi—as the risk of costly hurricane claims is higher. In states with fewer natural disasters, such as New Hampshire, Maine and South Dakota, premiums are often lower.

4. Your Insurer

Just like any other industry, different insurance companies charge different rates for the same types of policies. Some businesses offer low prices to be competitive, though others charge more but include better coverage.

Since the cost of your renters insurance can vary depending on the current rates charged by an insurance company, it pays off to get quotes with a variety of insurers and compare costs.

5. The Type of Coverage

There are actually two different types of renters insurance coverage: actual cash value and replacement cost. As you shop around, it's important to understand the differences between these coverage types so you can choose the best one for you.

  • Actual cash value: This pays out the current market value of the item, including depreciation, meaning it accounts for the item losing value over time.
  • Replacement cost: This pays out the cost of replacing the item with a new item that is comparable.

Actual cash value policies usually offer cheaper coverage, but they don't pay out as much when a claim is filed since it's replacing items with what the used one is worth—not what it would cost to replace it with a new one.

6. Your Other Insurance Coverage

To cultivate loyalty and gain more business, most insurance companies offer multipolicy discounts, providing a discount for "bundling." For example, if you already have car insurance or life insurance with one company and add renters insurance, you'll usually score a discount.

7. Safety Features

Insurance companies may offer reduced rates on renters insurance policies if the property has features that reduce risk (and, therefore, your chances of filing a claim). These might include:

  • Gated or secured community
  • Security/alarm system
  • Smoke detectors
  • Deadbolt locks
  • Video cameras
  • Sprinkler system

The Bottom Line

While the cost of renters insurance may be something you never recoup, you'll sure be thankful you have it if your belongings are stolen or destroyed in a natural disaster. Since policy rates can vary quite a bit, make sure to shop around to find the best deal for your budget.

A convenient way to do this is to use Gabi®, a part of Experian, to quickly compare renters insurance quotes in one place. If you already have renters insurance, the Gabi platform makes it easy to connect your current policy and compare it with others that might have a better price.

7 Factors That Impact Your Renters Insurance Cost - Experian (2024)


7 Factors That Impact Your Renters Insurance Cost - Experian? ›

The cost of renters insurance depends on several factors like your location, policy deductible, total amount of coverage, and insurance carrier. Renters insurance not only pays for damage to or loss of your personal property, but it also includes personal liability, medical payments, and loss of use coverage.

What are the factors that affect the premiums for renter's insurance? ›

To estimate how much your renters insurance will cost, consider how these factors apply to you:
  • The state where you live. ...
  • The location where you live. ...
  • What insurance provider you have. ...
  • How much coverage you need. ...
  • The type of coverage you choose. ...
  • The amount of your deductible.

What factors determine the cost of a person's rental insurance? ›

The cost of renters insurance depends on several factors like your location, policy deductible, total amount of coverage, and insurance carrier. Renters insurance not only pays for damage to or loss of your personal property, but it also includes personal liability, medical payments, and loss of use coverage.

What factors affect the cost of homeowner's and renter's insurance? ›

The cost of homeowners and tenants insurance depends on a number of factors including: location, age and type of building. use of building (residence and/or commercial) proximity of fire protection services.

What decreases the cost of renters insurance? ›

Have Your Landlord Install Safety and Security Equipment. Some renters insurance policies may drop their price if your landlord has installed safety and security equipment such as fire and burglar alarms. The insurance company has an interest in making sure your belongings are well-protected.

What are 5 factors that are used to determine the cost of insurance premiums? ›

Five factors that affect your auto insurance payment are how often you pay your premium, your vehicle, your driving history, your credit history and your state's coverage requirements. Insurance companies use most of these factors to determine how likely you are to file a claim and thus how risky you are to insure.

What are 5 factors that affect your home insurance premium? ›

Profit and prosper with the best of expert advice - straight to your e-mail.
  • Location. Homes in high-risk areas typically have higher premiums. ...
  • Type of coverage. ...
  • Deductible. ...
  • Home's age and condition. ...
  • Home security. ...
  • Claims history. ...
  • Credit history. ...
  • Discounts.

How do you think the different factors impact the monthly premium for renters insurance? ›

One of the the key factors that affects your renters insurance costs is the amount of personal property, or contents, coverage you choose. This is the amount of money you'd receive if all your belongings were stolen, destroyed in a fire or lost due to any other covered peril, up to the limit you set.

What are the factors that determine insurance? ›

Common factors include:
  • Driving record. ...
  • Garaging of the vehicle. ...
  • Gender and age of drivers. ...
  • Marital status. ...
  • Prior insurance coverage. ...
  • Miles driven and use of vehicle. ...
  • Make and Model of vehicle. ...
  • Licensed drivers in your household.

How does insurance determine cost? ›

Many factors help determine the cost of car insurance

Your driving record – The better your record, the lower your premium. If you've had accidents or serious traffic violations, it's likely you'll pay more than if you have a clean driving record.

Which of the following affects the cost of your insurance? ›

The factors that affect car insurance rates include your age, driving history and marital status and details about your vehicle, such as its model year.

Why would my renters insurance go up? ›

Your rate for renters insurance will increase after a claim, especially if it was due to theft or fire. Typically, you'll have two to three days (48 to 72 hours after the loss) to file a claim, but this may differ from policy to policy.

What two factors affect the cost of insurance premiums? ›

  • Age. The primary factor affecting the cost of life insurance premiums is the your age. ...
  • Gender. Gender is also a significant factor in the price of life insurance. ...
  • Smoking. Smoking puts you at a higher risk for many health problems. ...
  • Health. ...
  • Lifestyle. ...
  • Family Medical History. ...
  • Driving Record.

What types of losses are covered by renter's insurance? ›

The standard coverages on a typical renters insurance policy are personal property, personal liability, medical payments to others, and loss of use.

What is the most common amount for renters insurance? ›

Renters insurance is relatively inexpensive. According to NerdWallet, the average renters policy costs about $15 per month for up to $30,000 in personal property coverage. That's solid coverage for less than the cost of a few cups of coffee a week.

Why is renters insurance so low? ›

Renters insurance is one of the cheapest insurance products you can buy, costing an average of $15 a month. This is partly because a renters policy doesn't insure a physical dwelling — just your personal property, liability, and additional living expenses. Kara McGinley.

What are the 5 factors your premium depends on for auto insurance? ›

5 Factors That May Impact Your Car Insurance Rate
  • Factor #1: Make & Model of Your Car. The type of car you drive can have an impact on how much you're required to pay for coverage. ...
  • Factor #2: Zip Code. ...
  • Factor #3: Your Car's Age. ...
  • Factor #4: Your Driving Record. ...
  • Factor #5: Marital Status & New Drivers.

What are the 3 main factors used in determining health insurance premiums? ›

Factors affecting health insurance premiums
  • Age and Gender: Age: As individuals get older, the likelihood of needing healthcare services typically increases. ...
  • Medical History and Current Health Condition: ...
  • Coverage Type and Level: ...
  • Location and Local Healthcare Costs: ...
  • Deductibles, Copayments, and Coinsurance:
Sep 1, 2023

Why did my renters insurance premium go up? ›

Your rate for renters insurance will increase after a claim, especially if it was due to theft or fire. Typically, you'll have two to three days (48 to 72 hours after the loss) to file a claim, but this may differ from policy to policy.

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