Renters Insurance By the Numbers

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.

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.

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.

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.

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.

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.

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%.

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 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.

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.

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.

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.

As a renter, you are faced with responsibilities. As a property owner, different responsibilities require research and more financial preparedness. For various reasons, renting might be your short-term or long-term plan. If you are a renter, consider MoneyGeek’s list of pertinent resources.

• Your Guide to Your Rights and Responsibilities as a Renter: It’s best to know what you can or can’t demand from your landlord. Additionally, you must also understand what’s expected of you as a tenant.
• What Renters Insurance Does and Doesn’t Cover: Dive deeper into renters insurance and get a clearer picture of what it does and doesn’t cover. It’ll help you decide whether you need supplemental coverage or not.
• How Much is Apartment Renters Insurance? An apartment is one of the many properties you can rent. This page explores several essential topics, such as cost, coverage and which providers offer the most affordable rates.
• How to Find the Best Renters Insurance for College Students: Almost half of the renters in 2019 were under 30 — some were in college. MoneyGeek provides strategies to find affordable coverage while you’re still in school.
• Covering Pet Liability Costs with Renters Insurance: Many renters are fur parents. No matter how well you take care of your furbaby, accidents can happen and your possessions may sustain damage. See if renters insurance can help you with these costs.