Get three quotes. That is the entire cost strategy, and the Insurance Information Institute recommends the same number, because prices for identical coverage vary more between carriers than they do between the choices a tenant makes on the application.
Then the numbers, so the quotes have something to sit against.
The national picture
The NAIC’s average premium series puts US renters insurance at $170 a year in 2021, the most recent year in the published table. That was a 1.7 percent decline, and the seventh consecutive annual decline in a row: the series ran $187 in 2012 and has drifted down almost every year since.
Renters insurance is one of very few insurance lines that has gotten cheaper over a decade. Homeowners insurance over the same period went from $1,034 to $1,411.
The state spread is the real story
A national average hides a spread of more than two to one. From the same NAIC data for 2021:
| Highest | Lowest | ||
|---|---|---|---|
| Mississippi | $258 | North Dakota | $114 |
| Louisiana | $243 | South Dakota | $117 |
| Alabama | $222 | Wisconsin | $127 |
The pattern is weather. The expensive states sit on the Gulf, where wind and water losses drive pricing for every property line, and the cheap ones are northern plains states with far less catastrophe exposure.
For a specific market, the Texas Department of Insurance tells Texans to budget about $20 a month, which is roughly the national average expressed differently.
The five things that move a quote
Coverage amount. How much personal property the policy insures. Most tenants overestimate what they own until they walk a room and add it up, then underestimate the total by about half. A home inventory is the fix, and it takes twenty minutes with a phone.
Deductible. The largest lever a tenant controls. The Texas Department of Insurance suggests considering at least $500, and notes that raising it to $1,000 may cut as much as 25 percent off the premium. The catch is that the deductible applies to each claim.
Actual cash value versus replacement cost. Replacement cost pays what it costs to buy the item today, no depreciation. Actual cash value subtracts depreciation first. The Insurance Information Institute puts the price difference at about 10 percent, which is the best value in the entire policy.
Liability limit. Going from a low limit to $100,000 or $300,000 is usually a small number of dollars. Beyond that, an umbrella policy adding $1 million of liability generally runs $200 to $350 a year, which is more than the underlying renters policy costs.
Discounts. Bundling with auto is the big one. The Insurance Information Institute also lists discounts for a security system, smoke detectors, and deadbolt locks, plus carrier-specific discounts by age or non-smoking status.
Where a cheap policy gets expensive
Premium is not the only number on the page. Sublimits are, and they are where a $12-a-month policy turns out not to cover the thing that was stolen.
The Texas Department of Insurance lists the common ones: $100 for cash, $2,500 for items used for business, and $500 for jewelry and watches. The Insurance Information Institute puts typical jewelry coverage nearer $1,500. Either way, a tenant with a ring, a camera, a musical instrument or a work laptop is under-covered on a standard policy, and the fix is a floater or endorsement that carries its own cost.
Off-premises coverage has a ceiling too, generally around 10 percent of the personal property limit. That is the line that decides how much of a stolen laptop gets paid when it was taken from a car.
Read the sublimits before comparing two quotes. Two policies at the same price are not necessarily the same policy.
What a landlord does with these numbers
Two things.
First, when you require coverage, put a real number next to it. “About $15 to $25 a month in most states” is a sentence that ends most objections before they start, and it is defensible because it comes from published NAIC data rather than a guess. Writing the requirement into the lease covers the rest of the clause.
Second, do not tell a tenant which carrier to use, and do not collect anything for steering them to one. Requiring coverage is a lease term. Selling or placing coverage is a licensed activity in every state, and the line between the two is not somewhere to improvise.
The comparison that actually persuades
A tenant paying $1,600 a month in rent spends $19,200 a year on housing. Adding renters insurance at the national average takes that to $19,370.
That is a 0.9 percent increase to cover every belonging they own, their liability to other people, and a place to stay if the unit burns. Nothing else on a tenant’s budget has that shape.
What it does not cover is the building, which is on your policy, at roughly eight times the price. The coverage split between the two policies is worth understanding before either of you needs it.
A note on the data
Every figure above is the NAIC’s published average through 2021, which is the latest year in the series, or the Texas Department of Insurance’s current guidance. Averages move, and a quote in your market this month is the only number that binds anybody. Use these to know whether a quote is normal, not to predict it.
LeaseRooster keeps the policy the tenant actually bought on the lease it belongs to, with the carrier, the limits, and the expiration date. The renters insurance page covers the tracking.
This is general information, not legal advice, and it is not insurance advice. Premiums vary by carrier, state, coverage and individual circumstances. Get quotes from admitted carriers in your state and confirm coverage details with your agent or state insurance department.