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What Is The Cost Of Renters Insurance By State? (2024 Renters Insurance Guide)

Last updated 07/05/2024 by

Benjamin Locke

Edited by

Summary:
Renters’ insurance costs differ widely based on state-specific factors such as local regulations and natural disaster risks. States with severe weather events tend to have higher insurance premiums, while those with milder conditions enjoy lower costs.
Renters insurance is a type of policy that protects your personal belongings within a rental property, covering damage or loss due to events like theft, fire, or water damage. It also provides liability coverage if someone gets injured in your home. Renters insurance is relatively inexpensive, with premiums varying by state, but it offers significant peace of mind by safeguarding your possessions and finances.

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How does renters insurance cost vary by state?

The states with the highest average renters insurance costs include Mississippi, Oklahoma, Louisiana, Texas, and Alabama, primarily due to the high risk of severe weather events such as tornadoes, hurricanes, and floods. Conversely, states like South Dakota, North Dakota, Wisconsin, Iowa, and Minnesota have lower insurance costs due to their milder weather conditions and lower risk of natural disasters.

Is renters insurance always necessary?

Renters insurance is not legally required, but it is often necessary and highly recommended. While your landlord’s insurance covers the building itself, renters insurance protects your personal belongings and provides liability coverage. Without renters insurance, you would be responsible for replacing your possessions out of pocket in case of theft, fire, or other covered events. Additionally, liability coverage helps protect you from financial loss if someone is injured in your rental unit.

Will renters insurance differ in different areas of the state?

Yes, renters insurance costs can vary significantly within different areas of the same state. Factors such as the neighborhood’s crime rate, the property’s proximity to fire stations and hydrants, and the area’s susceptibility to natural disasters can all influence insurance premiums. Urban areas with higher crime rates or more densely populated regions may have higher insurance costs due to the increased risk of theft or property damage. Conversely, rural areas or neighborhoods with lower crime rates and fewer risks might have lower premiums.

States with the lowest average renters insurance costs

StateAverage Annual Premium
North Carolina$83
Wisconsin$100
South Dakota$108
Iowa$113
Vermont$111
The states with the lowest average renters insurance costs include North Carolina, Wisconsin, South Dakota, Iowa, and Vermont. These states benefit from fewer severe weather events and lower risks of natural disasters, contributing to their lower insurance premiums. Additionally, the economies in these states tend to be more stable, with fewer fluctuations that can impact insurance rates. The relatively low population density in these regions also means fewer claims and less strain on insurance resources, which helps keep premiums down. Furthermore, these states often have strong building codes and regulations that reduce the likelihood of damage, further contributing to more affordable renters insurance coverage.
Certain states do provide special incentives or plans that can lower policyholders’ renter’s insurance premiums.
For example, the report notes that Florida has a discount program for renters who install hurricane-resistant features in their homes, such as impact-resistant windows or doors. This can help offset the higher insurance costs associated with hurricane risk.
Similarly, California offers a FAIR Plan, a state-backed insurance program that provides coverage for renters in high-risk areas. Since private insurance is difficult to obtain, this program can provide more affordable options for renters in certain regions of the state. – Sal Dimiceli, Owner of Lake Geneva Area Realty.

States with the highest average renters insurance costs

StateAverage Annual Premium
Mississippi$221
Louisiana$294
Arkansas$208
Georgia$187
Connecticut$185
The states with the highest average renters insurance costs include Mississippi, Louisiana, Arkansas, Georgia, and Connecticut. Mississippi has the highest average premium at $221 annually due to the frequent occurrence of severe storms, including hurricanes and floods. Similarly, Louisiana and Arkansas face high premiums because of the regular threats of tornadoes and hurricanes. Georgia’s high premiums, averaging $187 annually, are driven by the frequent occurrence of severe storms and tornadoes, which cause extensive property damage. Connecticut’s high insurance costs, averaging $185 annually, are influenced by the risk of snowstorms and other natural disasters, making it one of the more expensive states for renters insurance.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Determinants of renters insurance costs

The cost of renters insurance is influenced by several factors. Insurance companies consider the following aspects when determining premiums:
Items that might affect your renters insurance premium.
CriteriaConsiderationImpact on Insurance Decision
LocationEvaluate the risk of natural disasters in your areaHigher risk areas lead to higher premiums
Coverage AmountDecide on coverage limits and deductiblesHigher coverage and lower deductibles increase premiums
Credit ScoreCheck your credit score regularlyHigher scores can secure lower premiums
Claims HistoryMaintain a low frequency of claimsFrequent claims can raise your premiums
Mike Wall, an expert at EZ Sell Homebuyers, shares some valuable insights into the factors that influence renters insurance costs
Several factors influence the cost of renters insurance:
  • Location: States prone to natural disasters tend to have higher premiums. Urban areas with higher crime rates can also see increased costs.
  • Coverage Amount: Higher coverage limits and additional riders for items like jewelry or electronics increase the premium.
  • Deductible: A higher deductible generally means a lower premium, and vice versa.
  • Credit Score: Insurers often consider credit scores when determining premiums, with higher scores generally leading to lower costs.
  • Claims History: A history of previous claims can result in higher premiums.
  • Building Type: The age, construction type, and safety features of the building can impact insurance costs.

Renting with an idea to Airbnb the property, what to know

Whether renting a place and then listing it on Airbnb is legal depends on local laws and regulations. Many cities have specific rules regarding short-term rentals, and some may require permits or have restrictions on how long you can rent out your property. Additionally, your lease agreement with your landlord may prohibit subletting or listing the rental on platforms like Airbnb. It’s crucial to check local regulations and your lease terms to ensure you are in compliance.
When it comes to insurance, standard renters insurance typically does not cover damages or liability arising from commercial activities, including short-term rentals like Airbnb. If you plan to rent out your place on Airbnb, you should inform your insurance provider and consider obtaining additional coverage specifically designed for short-term rentals. Airbnb offers its own Host Protection Insurance, but it may not cover all potential risks. You might need a specialized short-term rental insurance policy to fully protect yourself and your property in these situations.

Pro Tip

“As a professional insurance advisor, I recommend renters listing their property on Airbnb consider short-term rental insurance. This specialized policy provides protection for guests’ injuries, property damage caused by guests, and potential loss of income due to cancellations. Unlike standard renters insurance, which mainly covers personal belongings and liability, short-term rental insurance addresses the unique risks associated with hosting. Consult with a qualified broker to ensure your coverage meets all your needs.” – Barry Galvin, Insurance Advisor at Founder Shield

Types of short-term rental insurance

Type of InsuranceCoverageExample Providers
Host Protection InsuranceProvides liability coverage for hosts if a guest gets injured or if the guest’s property is damaged. Includes coverage for legal fees.Airbnb
Host Guarantee InsuranceCovers damage to the host’s property caused by guests, including damage to furniture, electronics, and personal items.Airbnb
Commercial Property InsuranceTailored for properties used commercially as short-term rentals. Covers building structure, personal property, and liability.Proper Insurance, CBIZ
Short-Term Rental EndorsementAn add-on to a standard homeowners or renters insurance policy that extends coverage to include short-term rental activities.Traditional insurance companies (e.g., Allstate, State Farm)
Vacation Rental InsuranceComprehensive coverage including property damage, liability, and loss of income if the property becomes uninhabitable.SafelyStay, SquareMouth
Landlord Insurance with Short-Term Rental CoverageDesigned for property owners renting out properties for various durations, including short-term. Includes property damage, liability, and loss of rental income.Allstate, State Farm

Ways to lower your renter’s insurance costs

Improve your credit score

Enhancing your credit score can lead to better insurance terms and lower premiums. Regularly monitoring your credit report and addressing any discrepancies can help improve your score. Pay off outstanding debts, avoid new credit inquiries, and make timely payments on all your bills to gradually raise your credit score. Over time, a higher credit score can open up access to more competitive insurance offers and lower premiums, ultimately reducing the total cost of your renters insurance.

Expert Insight

Because a high credit score may be interpreted as evidence of stable finances, raising one’s credit rating could help obtain better renters insurance. It saves more money overall and results in reduced rates.” – Brady Bridges, owner Reside Real Estate

Shop around

Comparing offers from multiple insurance companies can help you find the best rates. Utilize online comparison tools and seek quotes from various insurers to identify the most favorable terms. Different companies may offer varying rates and policy conditions, so it’s essential to explore all available options. Don’t settle for the first offer you receive; instead, take the time to negotiate with insurers and leverage competing offers to secure the best possible deal on your renters insurance.

Choose a higher deductible

Opting for a higher deductible can reduce your premiums. While higher deductibles mean you will pay more out of pocket in the event of a claim, they can significantly decrease the amount of your monthly or annual premium. This strategy can be particularly beneficial if you have the financial flexibility to handle higher deductibles and aim to minimize long-term premium expenses.

Consider bundling policies

Bundling your renters insurance with other policies, such as auto or life insurance, can lead to discounts. Many insurance companies offer multi-policy discounts to encourage customers to consolidate their insurance needs with one provider. This can simplify your insurance management and provide cost savings on your overall insurance expenses.

Maintain a claims-free history

Avoiding frequent claims can help keep your premiums lower. Insurance companies often provide discounts to policyholders who have not made claims over a certain period. By maintaining your rental unit well and addressing minor issues out-of-pocket, you can reduce the likelihood of making claims and benefit from lower insurance costs.

FAQ

Does renters insurance cover natural disasters?

Renters insurance typically covers damage from certain natural disasters like windstorms, hail, and fire, protecting your personal belongings in these events. However, standard policies usually do not cover damage caused by floods or earthquakes, which require separate policies or endorsements. It’s important to evaluate your specific risks based on your location and consider additional coverage if necessary. For example, if you live in a flood-prone area, obtaining flood insurance is crucial, and earthquake insurance is essential in seismically active regions.

Can I get discounts on my renters insurance?

Yes, many insurers offer discounts that can help lower your renters insurance premiums. Common discounts include those for installing security systems, smoke detectors, or fire alarms, which reduce the risk of damage or loss. Bundling multiple policies, such as renters and auto insurance, can also lead to savings. Additionally, insurers often provide discounts for maintaining a claims-free record. It’s advisable to ask your insurer about available discounts and compare offers from different providers to maximize your savings.

How often should I review my renters insurance policy?

It’s recommended to review your renters insurance policy annually or whenever significant changes occur in your life or rental unit, such as renovations, purchasing valuable items, or moving to a new location. Regular reviews ensure that your coverage remains adequate and up-to-date. Updating your inventory of personal items and assessing your coverage limits helps avoid being underinsured or overpaying for unnecessary coverage.

What should I do if my renters insurance claim is denied?

If your renters insurance claim is denied, review your policy and the denial letter carefully to understand the reasons. Ensure that the denial is not due to a misunderstanding or missing information. If you believe the denial is unjustified, you can appeal the decision with your insurer, provide additional documentation, or seek assistance from your state’s insurance department or a legal advisor.

Key takeaways

  • Renters insurance costs vary significantly across different states, influenced by local regulations, natural disaster risks, and market competition.
  • States with higher insurance costs often face greater risks from severe weather events like hurricanes, tornadoes, and floods.
  • States with lower insurance costs benefit from milder weather conditions and fewer claims, resulting in more affordable premiums.
  • Different types of renters insurance policies offer varying levels of coverage, with basic policies like HO-4 providing essential coverage at a low cost.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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