Renters: Insurance Ignored

Despite being a relatively affordable form of insurance, millions of renters forgo renters insurance each year. While the specific yearly figure is unclear, statistics show that far fewer renters have insurance than homeowners. According to a 2024 report from SafeHome, 95% of homeowners have homeowner's insurance, while only 55% of renters have renters insurance. Similarly, the Insurance Information Institute reported that only 37% of renters had renters insurance in 2014.

Renters insurance costs $148 per year on average

The average cost of renters insurance in the US is $148 per year, or about $12 per month. This estimate is based on a policy for a hypothetical 30-year-old tenant with $30,000 in personal property coverage, $100,000 in liability coverage, and a $500 deductible.

While the nationwide average is a useful baseline, renters insurance rates vary depending on where you live and how much coverage you need. For example, renters insurance in Louisiana costs $253 per year, or $21 per month, on average, while renters insurance in Wyoming costs $91 per year, or $8 per month, on average.

The cost of renters insurance also depends on the company you choose. For instance, State Farm offers the most affordable renters insurance, with annual premiums of $99 for $20,000 in personal property coverage. In contrast, Travelers offers renters insurance at $239 per year for the same coverage amount.

In addition to location and insurance provider, other factors that can influence the cost of renters insurance include your credit score, claims history, and deductible amount. Maintaining a good credit score, having a clean claims history, and choosing a higher deductible can help lower your renters insurance rates.

Renters insurance is designed for people who rent their homes and provides financial protection for personal property and liability. It covers various incidents, such as theft, fire damage, medical payments for guests injured on your property, and additional living expenses if your rental becomes uninhabitable due to a covered peril.

55% of renters have renter's insurance

While renters insurance is not required by law, it is still a good idea to have it. In fact, according to the Insurance Information Institute, 55% of renters had renters insurance in 2020, up from 42% in 2018 and 37% in 2014. This type of insurance is relatively affordable, with an average annual cost of $187 or $15.58 per month. It covers personal property, liability, and loss-of-use.

Personal property coverage pays to repair or replace your belongings if they are stolen, damaged, or destroyed in a covered event like a fire or burglary. Liability coverage protects you if someone is injured or their property is damaged and they sue you and you are found at fault. Loss-of-use coverage pays for rent, food, and other costs if you have to live somewhere else because your rental unit is damaged and uninhabitable.

The cost of renters insurance depends on several factors, including the policy coverage limits, deductible amount, the company you choose, and your location. For example, renters in Louisiana and Mississippi pay higher premiums at $253 and $252 per year, respectively, while renters in Wyoming and Alaska pay lower premiums at $91 and $101 per year.

It is worth noting that renters insurance does not cover all risks. For example, flooding is not typically covered by standard renters insurance policies, even though it is a common hazard in some states. Separate flood insurance may be purchased to cover this risk.

Landlords often require tenants to have renter's insurance

Landlords often require tenants to have renters insurance to protect their properties and keep more money in their pockets. While a landlord's insurance policy covers the building and medical payments for visitors injured on the property, it does not cover a tenant's personal belongings. Renters insurance, on the other hand, covers the tenant's personal property and provides liability coverage for certain types of bodily injury or property damage. This means that in the event of a loss, such as a fire or theft, the tenant's belongings and any resulting liability will be covered by their insurance policy, rather than the landlord's.

There are several benefits of renters insurance for landlords. Firstly, it reduces their liability by providing liability coverage for tenants, which helps to keep landlords out of court in the event of a lawsuit. Secondly, it helps landlords avoid payment for damages to a tenant's personal items in the event of a fire, flood, or other natural disasters. Thirdly, renters insurance can cover the cost of temporary living arrangements for tenants, so landlords don't have to pay for these accommodations while repairs or renovations are being made. Fourthly, it can help mitigate the risks of damage or injuries caused by tenants' pets to others or their property. Finally, requiring renters insurance can be a good indicator of a tenant's ability to pay rent on time and can help weed out potentially problematic tenants.

While it is not mandatory for landlords to require tenants to have renters insurance, it is a contractual issue and landlords have the right to include it as a condition of the lease. By doing so, landlords can highlight the importance of protecting their tenant's property and minimising their liability risk. Tenants who own expensive electronics or other valuable items should consider adding a personal articles policy to their renters insurance to assist with replacement costs in case of damage or theft.

Renters insurance is also beneficial for tenants as it protects their property and minimises their risk. It covers the cost of repairing or replacing their personal possessions, provides liability coverage in case of a lawsuit, and can even cover additional living expenses if they need to live somewhere else temporarily due to a covered loss. Additionally, renters insurance is relatively inexpensive, costing renters nationwide about $148 per year on average, or about $12 per month.

Renter's insurance covers personal property and liability

While I wasn't able to find statistics on how many people don't invest in renters insurance annually, I did find that only 37% of renters had renters insurance in 2014, according to the Insurance Information Institute.

Now, here's some detailed information on how renters insurance covers personal property and liability:

Renters insurance provides financial protection for your personal property and liability. It covers the cost of replacing your furniture and clothing after a house fire, paying your neighbour's medical bills if your dog bites them, or paying for a hotel room if your apartment is broken into and you need alternative accommodation.

Personal property coverage protects your belongings from theft or damage, even covering items stolen from your car or while you're travelling. It's important to note that some policies limit payments for certain types of property, such as cash, items used for business, and jewellery. You can also buy a policy that covers the replacement value of your items, but it will cost more.

Liability coverage, often referred to as personal liability, covers your personal liability if you cause damage to someone else's property or if someone gets hurt in your home. For example, if your friend gets injured in your apartment and needs medical treatment, your renters liability coverage can help pay for their medical fees. It also covers legal costs if someone sues you for situations like accidents within your home or dog bites.

Loss-of-use coverage, also known as additional living expenses coverage, pays for any extra costs you may incur if you need to relocate temporarily while your home is being repaired due to a covered loss. This includes hotel bills, rental costs, and other expenses beyond your normal living costs.

The cost of renters insurance varies depending on your location and the level of coverage you need. The average cost of renters insurance in the US is around $12 to $20 per month, but it can be higher in certain states, such as Louisiana and Mississippi, which have higher premiums.

It's relatively affordable

Renters insurance is relatively affordable, costing between $12 and $30 per month on average. In 2020, the average renter's insurance policy cost $15 to $30 a month, according to the National Association of Insurance Commissioners (NAIC). The cost of your policy will depend on factors such as the amount of coverage you need, the type of coverage you choose, the size of your deductible, and where you live.

The average renters insurance cost in the US is $148 per year, or about $12 per month, according to NerdWallet's latest rate analysis. However, renters insurance rates vary based on location and coverage needs. For example, renters insurance in Louisiana costs $253 per year, or $21 per month, on average, while renters insurance in Wyoming costs $91 per year, or $8 per month, on average.

Renters insurance is significantly cheaper than homeowners insurance, which costs more than $1,900 per year on average. This is because renters insurance only covers the contents of your home, not the building itself.

There are several ways to get cheap renters insurance. One way is to shop around and compare rates from multiple insurance providers. You can also increase your deductible, which will lower your premium but will result in higher out-of-pocket costs if you need to file a claim. Additionally, many insurance companies offer discounts for bundling policies, such as renters and auto insurance, or for having safety and security devices in your home.

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