Average cost of renters insurance in 2025

What is the average cost of renters insurance?

The average cost of renters insurance in the U.S. is $170 per year or $14 per month, according to the most recent data available from the Insurance Information Institute. However, the exact cost of your renters insurance policy will vary, depending largely on the amount of coverage you buy.

Comparatively, the average homeowners insurance policy as of February 2025 is $2,258 per year for $300,000 in dwelling coverage, or $188 per month. Renters insurance does not cover the dwelling structure like homeowners insurance does, which contributes to the lower premium.

How much renters insurance do I need?

While it's important to note that renters insurance isn't a legal requirement, understanding how much coverage you need is key to ensuring you're adequately protected. Additionally, your landlord may require that you carry a policy at set limits. The amount of personal property coverage necessary can vary significantly from one insurer to another, with some offering minimums as low as $2,500 and others setting the bar at $20,000 to $25,000. This coverage is crucial for safeguarding items like your clothes, furniture and certain electronics.

In essence, how much renters insurance you need hinges on the value of your personal property and the cost to replace these items in the event of a loss. It's advised to have sufficient coverage that mirrors the total value of your possessions to ensure comprehensive financial protection. Beyond personal property, the total cost of your renters insurance will also be influenced by the liability coverage you opt for, any additional endorsements to enhance your policy and the deductible you select.

Factors that influence the cost of renters insurance

Understanding what affects renters insurance costs might help you feel more comfortable choosing coverage to build a policy that fits your needs and budget. This information can also help you to make strategic choices about which types of coverage you want and at what levels.

Coverage limits

Renters insurance policies are made up of several standard coverage options. You can often choose higher or lower limits to fit your needs. The standard renters coverage types include:

• Personal property coverage: This is the main coverage type in a renters insurance policy and covers your belongings, like clothing and furniture.
• Loss of use coverage: Also called additional living expenses, this coverage pays for expenses incurred while you cannot live in your home due to a covered loss. Such expenses may include hotel bills or other temporary housing, laundry fees and even pet boarding fees in some cases.
• Liability coverage: Liability pays for expenses related to guest injuries that occur on your property that you are found negligent for, as well as damage to others’ property that you cause. However, liability might not cover damage caused to your rental unit itself.
• Medical payments to others coverage: Medical payments to others coverage is designed to help pay for the medical expenses of guests injured on your property. In cases where a guest is injured but you are not legally liable for their medical expenses, medical payments to others can extend to help cover their bills. However, it’s important to note that this coverage does not include yourself (the policyholder) or any roommates and family that live with you.

Optional coverage types

You can also add optional coverage types that will increase your financial protection but will also increase your premium. Some common coverage options are:

• Contents replacement cost: This endorsement means you will be paid for the replacement cost of your damaged or destroyed personal property rather than its depreciated value.
• Scheduled personal property: If you have any high-value items, such as jewelry, collectibles or musical instruments, this option broadens your personal property coverage to include specific items that are more costly to replace.
• Water and sewer backup coverage: This coverage pays for the water damage to your belongings following a sewer or drain line backup. Not every company offers this option for renters, but it is available.
• Identity theft coverage: Identity theft tends to occur more commonly as our world becomes increasingly digital. This endorsement can help pay for the costs associated with restoring your identity if it is stolen.

There are numerous other optional coverage types, and each renters insurance company offers a different suite of endorsements. A licensed insurance agent can help you choose coverage that is appropriate for your situation.

Renters insurance deductible

Your deductible is the amount of money you will pay out of pocket if you file a claim. It is the portion of damage you agree to cover, and your insurer will pay the rest up to your policy limits. Because of this, your deductible impacts your premium.

Generally, the higher your policy deductible, the lower your premium. Many renters insurance policies have a standard deductible of $500, and with many insurers, this may be the lowest deductible that you can choose. You should always choose a deductible that you feel comfortable paying to ensure that you don’t find yourself in financial trouble after a claim.

Claims history

If you have filed property claims in the past, your premium will likely be impacted. An insurance company views you as more likely to file claims in the future, and they compensate for the increased risk by charging you a higher rate.

Even if you lived at a different location, had a different insurer or filed a claim under a different policy type, like a homeowners or condo policy, your new insurance company will see your past claims on your CLUE report. Generally, only claims filed in the past five years will affect your premium, although this varies by company.

Your location

Where you live is another factor that plays a significant role in determining the cost of renters insurance. What state and town you live in, and what ZIP code you reside in will all impact your premium, since details tied to your location can capture the risks of vandalism, theft and natural disasters. For instance, if you live in a neighborhood with a higher rate of theft, you may face higher renters insurance costs. Likewise, if you live in a neighborhood with a high risk of fire, you may similarly see an increase in premiums.

What does renters insurance not cover?

While renters insurance provides a broad range of protections for tenants, there are specific areas it doesn't cover:

• Structural damages: The physical structure of your rental property, including permanent fixtures, isn't covered by renters insurance. These aspects fall under the landlord's property insurance.
• Natural disasters: Common exclusions in standard policies include damage from earthquakes and floods. For these types of natural disasters, additional coverage or riders might be necessary.
• High-value items: While theft is typically covered, there may be caps on the payout for high-value items like electronics, jewelry and collectibles. To fully protect these items, consider increasing your coverage limits or scheduling these valuables separately.
• Pest infestations: Standard renters insurance policies often exclude problems caused by bed bugs, rodents and other pests, leaving tenants to manage these issues independently.

Understanding these exclusions can help you make informed decisions about additional coverage options (such as the ones we mentioned above) that might be needed to fill any gaps in your policy.

How to save on renters insurance

Although renters insurance is typically less expensive than homeowners insurance, there are ways to save. Here are some of the easiest ways to reduce your costs, but remember that it’s important to weigh other aspects of a company, such as its customer service or claims handling, in addition to price.

• Bundle your other insurance policies: If you have other policies like auto insurance or life insurance, you could consider bundling these policies with one insurer. This might qualify you for a multi-policy discount on all of your insurance policies. Since renters insurance is generally cheap, the savings your bundling discount may provide could come close to the additional cost of your renters policy. In other words, your bundling discount could end up paying for most (or all) of your renters policy, making it an even better value.
• Choose an actual cash value policy: The main difference between an actual cash value (ACV) policy and a replacement cost value (RCV) policy is how your personal property is covered — at its depreciated value or its replacement cost. RCV policies generally cost more money because many of your items, like your TV and laptop, are likely to be more expensive to replace at the current market value. Because ACV policies pay for your items at their depreciated value, you receive less money for their replacement if you file a claim, but may also pay lower insurance premiums.
• Increase your deductible: Your deductible amount plays a role in your renters insurance premium. The lower your deductible amount, the higher your policy premium. If you want a cheaper renters policy, you could choose to have a higher deductible amount, but be sure that it is an amount that you could pay if a claim arises.
• Install safety equipment: Safety and security equipment, like smoke detectors or a security system, may qualify you for a discount. Security equipment might deter thieves and smoke alarms can notify you of potentially dangerous situations. Some insurers reward you for these preventive measures by offering additional savings.
• Adjust your payment method: Paying your annual premium in full may earn you a discount with insurers, but it could also save you from having to manage another monthly bill or pay billing fees. Talk with your insurer to see if this discount is an option.
• Review your personal property coverage limit: Another aspect of your renters insurance policy that you can control is the dollar amount for which you choose to cover your personal property. Reducing the amount will likely reduce your premium. Before reducing your coverage, you may want to take the time to consider if you have included enough to cover the cost of replacing your personal property.

Frequently asked questions