Renters Insurance By the Numbers

Name: Renters Insurance By the Numbers
Item: Renters Insurance By the Numbers
Author: Mark Fitzpatrick

Renters insurance in the U.S. costs an average of $174 for coverages ranging from $26,000 to $38,000.

Updated: October 30, 2024

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Smiling woman holding a set of house keys with a small wooden house keychain, expressing excitement.

The average renters' insurance is $174 per year for coverages ranging from $26,000 to $38,000 as of 2019. While there are different factors affecting the cost of monthly premiums, renters insurance is an affordable way of keeping your belongings protected as a tenant. The technical term for renters insurance is the “HO-4”.

While your landlord is responsible for ensuring the property remains habitable, they aren’t liable for your personal belongings if they are damaged. An HO-4 policy protects your personal belongings from damage and offers liability coverage in the event of injury on your rented property.

Key Takeaways

Across almost 50 million renter-occupied households, 48% of renters are younger than 30.

Of an average renter’s financial responsibilities, they typically spend at least 30% on rent and utilities.

Renters insurance premiums have been declining since 2014. In 2019, it reached an all-time low of $174 per year.

Although average annual premiums have decreased, your coverage limits affect the cost. The higher they are, the more you pay annually. Policies that cover less than $14,000 only cost $132, while those that cover $100,000 and higher cost $437.

Mississippi, Louisiana, Oklahoma, Texas and Alabama were the five states with the highest average annual renters insurance premiums in 2019.

Statistics on Renters Insurance

The number of renter-occupied households has been steadily increasing. According to a Harvard study, occupied rental units were up by 611,000 in the third quarter of 2021. Renters insurance comes in handy as it is an affordable way to ensure your assets are protected.

As with all things, the rate of renters insurance premiums in the U.S. has fluctuated over time. MoneyGeek's graph shows its change from 2010 to 2019.

Average Cost of Renters Insurance, 2010-2019

Source: Insurance Information Institute

Numbers show that the annual average cost of renters insurance has always been under $200. Year-over-year fluctuation has remained under 3%. 2012 saw the least amount of change, at less than 1%.

2014 had the highest average premium recorded at $190. Since then, rates have consistently decreased. The most significant change was between 2018 and 2019, from $179 to $174 — a 2.8% decrease.

Insurance Coverage and Premiums Paid

Knowing how much renters insurance you need is essential in managing your finances. After all, policy premiums vary depending on your coverage. The more protection your plan provides, the more expensive your premium.

Renters Insurance Coverage and Average Premium Paid

Source: National Association of Insurance Commissioners

For most protection plans, your annual premium won’t exceed $200 per year. Rates stay reasonably low for protection of less than $49,999. However, the average rate for plans ranging from $75,000 to $99,999 increased by 18.56%, from $194 to $230.

The most significant jump was from $75,000 to $100,000 and higher. Premiums increased by around 51%, from $290 per year to $437.

Renters Insurance by State

On average, the cost of renters insurance in 2019 was $179 per year. However, policyholders may pay a different rate depending on where they live. MoneyGeek's map shows how premiums vary by state. Those with darker hues indicate a higher annual premium, while lighter shades indicate more affordable rates.

The amount policyholders spend on renters insurance differs from state to state. MoneyGeek highlighted the most affordable and the most expensive annual premiums below.

Top 5 States With the Highest Renters Insurance

	State	Rental Insurance Premium
1.	Mississippi	$ 252.00
2.	Louisiana	$ 236.00
3.	Oklahoma	$ 235.00
4.	Texas	$ 220.00
5.	Alabama	$ 219.00

Top 5 States With the Lowest Renters Insurance

	State	Rental Insurance Premium
1.	North Dakota	$ 115.00
2.	South Dakota	$ 117.00
3.	Wisconsin	$ 127.00
4.	Minnesota	$ 135.00
5.	Nebraska	$ 144.00

Renters Insurance House-Year by State

One house-year refers to a 12-month coverage on a dwelling, whether based on a single policy or several with coverage lengths totaling the same period. MoneyGeek's heat map shows which states had more house-years in 2019, marked with darker shades.

2019 had over 18 million house-years across all states. Those with the highest were as follows:

California: 2,499,306
Texas: 1,745,270
New York: 954,491
Florida: 863,742
Pennsylvania: 741,424

These five states already total 37.5% of all house-years in the U.S. for the year.

The house-years indicated above only considered HO-4 policies. Keep in mind that there are other Homeowners Insurance (HO) policies available.

To the overall number of house-years in 2019, HO-4 policies contributed about a fifth. Looking at individual states, the ratio of HO-4 policies was highest in the following areas:

District of Columbia: 41.9%
North Dakota: 30.3%
Washington: 26.2%
Oregon: 25.5%
California: 25.4%

Vermont, Maine, Mississippi and West Virginia were on the other end of the spectrum, each contributing less than 13%.

Understanding Renters Insurance

Renting is a solid alternative to homeownership, especially if you prefer more flexibility. However, there's more to it than finding the ideal apartment or home. You also have to consider potential risks, especially to your personal belongings.

While your landlord's policy may cover damages to the structure of your rental unit, it doesn't extend to what you own. Yes, your landlord is responsible for ensuring your rented unit is habitable. Still, uncontrollable events, such as earthquakes or floods can cause unexpected damage and require you to spend on temporary housing. Renters insurance is beneficial in these circumstances.

You can only explore renters insurance statistics by understanding what renters insurance is, what it covers and what factors affect your premium.

HO-4 and HO-6 Policy Form

HO-4 is the technical term for renters insurance. Besides protecting your belongings, most policies also come with liability coverage, which is most useful in the unfortunate case that someone suffers an injury while on your rented property.

An HO-6 policy is a type of insurance for condo homeowners. These usually include dwelling, personal property and liability coverage.

In 2019, 73.86% of renters purchased HO-4s, while only 26.14% went for an HO-6 policy. Keep in mind that HO-4 policies are for renters and HO-6 policies are for condos and co-ops.

Typical Renters Insurance Coverage Types

A renters insurance policy isn't mandatory for all renters. The only time you must have one is if your landlord requires it. However, having one is an advantage because of the coverage it offers.

Here are the common types of coverage included in a renters insurance policy.

Personal Items

Several things may occur that result in damage to your belongings. These include fire, lightning, windstorms, theft and vandalism. Replacing or repairing your property may be expensive, and renters insurance protects you against these costs.

Liability

Liability coverage protects you against instances wherein a guest sustains an injury on your property. If an investigation finds that your negligence caused it, he may sue for damages. Renters insurance protects against such lawsuits.

Living Expenses

Extensive damage to your rental unit may make it uninhabitable, forcing you to stay elsewhere temporarily. Renters insurance covers expenses from hotel stays or meals.

Perils

Although your renters insurance policy won't cover damage from floods or earthquakes, you can file a claim if it's due to other covered perils. These include fire, hail, explosions and damages from a vehicle or aircraft, among other things.

Factors Influencing Renters Insurance Premiums

Although average renters insurance costs vary between states, these could further differ between cities in the same area. Insurance providers look at multiple things when calculating your policy's premium. Here are some factors they take into consideration.

Factor	Description
Amount of Coverage	Although most renters insurance policies have the same common coverages (personal property, living expenses and liability), your preferred limits will affect your rate. The more protection, the more expensive your premium.
Deductible	A deductible is the amount you pay each time you file a claim before your policy kicks in. A higher deductible requires you to shell out more money out of pocket but makes your premium more affordable. A lower deductible results in insurers paying out a higher amount, so they'll charge a higher monthly rate.
Area of Residence	Your rental unit's location determines whether or not you'll encounter severe weather conditions. If the insurer determines that you will, it might result in a higher premium. The same goes if you live in a state, a city or a ZIP code with higher crime rates.
Credit/Financial History	Insurers consider your credit score as a numerical basis of how well you manage your finances. A good credit standing indicates that you're reliable and will likely pay your premiums on time, making you less risky to insure. In turn, insurers typically offer lower rates.
Age and Condition of Residence	The newer your rental unit, the more affordable your premium becomes. Insurers see these properties as less risky and more likely to have security features present. Besides your building's age, insurers also look at its size — units with more lot area usually cost more to insure.

Renters Insurance Statistics FAQ

There's a lot more to renters insurance than its cost. It's easy to get overwhelmed by renter and homeowner responsibilities. To zero in on the essentials, we've compiled the questions renter policyholders commonly ask.

What’s the difference between HO-4 and HO-6 policies?

HO-4 and HO-6 are insurance policies. HO-4 is the technical term for renters insurance. However, if you own a condo, you would need an HO-6 policy.

While both provide personal property and liability coverage, HO-6 policies also protect you against costs from damages to your interior finishings, such as crown molding, countertops or cabinets.

How has the cost of renters insurance changed over the years?

Although the average cost of renters insurance has fluctuated over time, the change is typically small — never over 3% in the last decade.

Rates have shown a downward trend for the last five years. From an average of $190 in 2014, it reached $174 in 2019.

Does location affect your renters insurance premium?

Yes, location affects insurance. In 2019, 20 states had an average annual premium higher than the national average ($174). Those with the highest were Mississippi ($252), Louisiana ($236) and Oklahoma ($235).

What does renters insurance cover?

The commonly-found coverages in a renters insurance policy protect you against damages to your personal belongings, liability and additional living expenses.

Most policies indicate a list of covered perils, which include fire, hail, vandalism and theft. You can purchase supplemental insurance to cover damage from earthquakes and floods since standard policies don't have them.

What factors do insurance companies consider when calculating the premium of your renters insurance policy?

Besides location, insurers also look at your credit score, your home's age, your choice of deductible and coverage limits.