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Out of 147.4 million U.S. housing units, 45.5 million are renter-occupied. Unlike homeowners, renters aren't covered by landlord insurance, leaving personal belongings vulnerable to theft, fire or liability claims.
Renters insurance provides affordable protection for tenants at an average cost of $170 per year as of 2021. Premiums vary by state due to coverage limits, crime rates and natural disaster risks, so compare options for the best value.
45.5 million U.S. households were renter-occupied in Q4 2024 despite a 6.9% rental vacancy rate.
Average renters insurance costs dropped from $190 in 2014 to $170 in 2021.
Coverage limits impact your cost: policies under $14,000 cost about $130, while policies over $100,000 cost $432.
Mississippi, Louisiana, Alabama, Oklahoma and Arkansas have the highest premiums (up to $258) due to natural disaster risks.
The national rental vacancy rate was 6.9% in Q4 2024, statistically similar to 6.6% in Q4 2023. Renters insurance protects your personal assets affordably as demand for rental properties stays consistent.
Annual renters insurance premiums stay under $200 on average. Year-over-year changes typically stay under 3%, with 2012 seeing less than 1% change. Premiums peaked at $190 in 2014 but have dropped steadily since. The biggest decrease happened between 2018 and 2019, when the average dropped from $179 to $174 (a 2.8% decrease). This downward trend continued through 2021, reaching $170.
Higher coverage limits mean higher premiums, but the rate of increase varies by tier. Premiums stay affordable for lower coverage amounts but climb at mid-range levels. Coverage between $38,000 and $43,999 averages $203, a major jump from lower tiers.
Policies from $75,000 to $99,999 average $284, reflecting the added risk insurers take on with higher protection limits. The sharpest jump occurs at $100,000 and over, where premiums reach $432, over 50% more than the previous tier.
Renters insurance costs $170 per year on average in the U.S., but premiums vary widely by state. Mississippi has the highest average at $258, followed by Louisiana at $243 and Alabama at $222. These states face higher rates due to hurricanes and flooding risks.
North Dakota offers the most affordable renters insurance at $114, followed by South Dakota at $117 and Wisconsin at $127. These lower rates reflect fewer natural disaster risks and lower property crime rates.
State | Rental Insurance Premium | |
|---|---|---|
1. | Mississippi | $ 258 |
2. | Louisiana | $ 243 |
3. | Alabama | $ 222 |
4. | Oklahoma | $ 221 |
5. | Arkansas | $ 206 |
State | Rental Insurance Premium | |
|---|---|---|
1. | North Dakota | $ 114 |
2. | South Dakota | $ 117 |
3. | Wisconsin | $ 127 |
4. | Minnesota | $ 132 |
5. | Iowa | $ 135 |
A house-year measures 12 months of insurance coverage for a rental dwelling, whether through one policy or multiple policies providing year-long coverage. This metric shows the volume of renters insurance policies in each state.
Renters insurance accounted for over 19 million house-years nationwide in 2021. These states had the most house-years:
These five states alone accounted for about 39% of all U.S. house-years, showing where rental markets concentrate.
The District of Columbia had the highest ratio of renters insurance house-years at 43.3%. The highest state ratios were:
These figures come from HO-4 policies, which give renters personal property and liability coverage. HO-4 policies protect your belongings and provide legal protection if someone gets injured in your rental unit. However, HO-4 policies don't cover the building itself; that's your landlord's responsibility.
HO-3 policies cover homeowners differently, protecting both the structure and personal property. Understanding this difference helps you avoid paying for unnecessary coverage.
Your coverage amount, deductible, location, credit history and rental property's age and condition affect renters insurance premiums. Insurance providers assess these details to determine your risk level and calculate your premium:
Higher coverage limits provide more protection but increase your premiums. Policies covering high-value items like electronics, jewelry or collectibles cost more.
Create an inventory of your possessions to determine how much protection you need and avoid paying for unnecessary coverage.
Higher deductibles lower your renters insurance premium. By paying more out of pocket when you file a claim, you reduce the insurer's financial risk and get a cheaper policy. Lower deductibles increase your premium since the insurer covers more of potential claims.
Select a deductible that balances affordability and protection. Have enough savings to cover the deductible amount in case of a loss.
Insurers assess your neighborhood's risks when determining your premium. Areas prone to natural disasters like hurricanes, wildfires or flooding have higher premiums due to increased property damage risk.
Crime rates matter too. Neighborhoods with high theft or vandalism rates have more expensive premiums. Research the area's crime statistics and disaster history before renting to estimate your insurance costs.
Many insurers use your credit history to predict claim likelihood. Strong credit scores indicate financial responsibility and lower your perceived risk, leading to cheaper premiums. Poor credit scores result in higher premiums due to increased risk of missed payments or claims.
Improve your credit score before applying for renters insurance if needed. Pay bills on time and reduce outstanding debts to qualify for better rates.
Newer properties with modern safety features like smoke detectors, security systems and fire-resistant materials have lower insurance premiums. These features reduce damage or theft risk, making the property less costly to insure.
But older buildings with outdated wiring, plumbing or structural issues cost more to insure. They're more likely to experience maintenance problems, leading to frequent claims and higher premiums. Choose a well-maintained property to keep insurance costs down.
MoneyGeek's experts answered common questions about renters insurance cost changes, state differences, coverage amounts and top providers:
Renters insurance costs have declined over the past decade. The average peaked at $190 in 2014 and dropped to $170 in 2021. Year-over-year changes typically stayed under 3%.
Renters insurance costs have dropped due to increased competition among insurers and improved risk assessment models that enable more accurate pricing. Technology advancements have also streamlined claims processes, reducing administrative costs and allowing insurers to pass savings to policyholders.
Location significantly impacts renters insurance premiums. In 2021, Mississippi ($258), Louisiana ($243) and Alabama ($222) had the highest premiums due to natural disaster risks. North Dakota ($114), South Dakota ($117) and Wisconsin ($127) had the lowest premiums.
About 55% of U.S. renters (approximately 61 million people) currently have renters insurance, while 45% remain uninsured. This leaves many renters without financial protection against theft, fire or liability claims.
Renters insurance coverage between $20,000 and $30,000 for personal property is most common. This range typically covers furniture, electronics and clothing for most renters. Higher coverage limits are available for valuable items like jewelry or collectibles.
The best renters insurance provider depends on your needs, but State Farm, Auto-Owners Insurance and Nationwide consistently rank among the top for affordable rates, comprehensive coverage options and customer service. Compare quotes and read customer reviews to find the best fit.
Explore these MoneyGeek resources to learn more about renters insurance, renting trends and homeowners insurance facts:
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
