Before you dive into how much a renters insurance policy costs, are you wondering if you even need it? Yes. Yes, you do. (Your mom was right on that one!)

Turns out, renters insurance protects you against a bunch of all too common situations, like your laptop getting swiped from your bag, your apartment catching fire due to a tipped candle, or your BFF hurting himself while cooking in your kitchen and going to the hospital.

But how much is renters insurance, you ask? We’ve got good news. Starting at just $5/month, you can get peace of mind and confidence that you, and your precious belongings, are covered.

The average cost of renters insurance

The average cost of a renters insurance policy is $15.50/month – a big departure from those 5 monthly dollars we just mentioned. (Value Penguin) Why the difference?

The price of renters insurance can vary significantly, depending on your apartment’s location, condition of your building, deductible, and the amount of coverage you need.

One of the most important factors to keep in mind when considering renters insurance cost is the insurance company you go with. Lemonade is able to charge 80% less than the largest insurers. Seriously.

The nation’s 4 largest insurers came in between 2X and 4X Lemonade’s prices for equivalent coverage.

How is Lemonade able to provide these prices? Lemonade works hard to lower fraud costs by aligning interests, and slashing expenses through technology. That makes for a more affordable and delightful experience.

Even so, your renters insurance price will depend on a couple of individual factors. So yours might cost $5/mo, or it could cost $20/mo, depending on a few variables we’ll discuss below.

Making sense of your renters insurance price

Let’s dig a bit deeper into this. Here are the factors that can determine your renters insurance cost.

1. The property itself

How old is the building you live in? How big is it? What kind of renovations has it been through?

Those pre-war hardwood floors may be your favorite thing about your home, but are the pipes as old as the carpentry? The older your apartment building is, the more prone it may be to damage. So older homes = higher renters insurance cost.

2. The location of the property

For obvious reasons, the neighborhood you reside in may affect your renters insurance rate. If you live on the coast, you may be more likely to encounter extreme weather. And as an insurance rule-of-thumb, the more likely you are to file a claim, the more your renters insurance will cost.

But your location could also help lower your price! For example, living around the corner from a fire station could help bring costs back down.

Btw, keep in mind that insurance regulations, and therefore pricing, can differ from state to state. Renters insurance in Texas might be different from renters insurance in PA.

Here’s the average price of renters insurance in several states across the U.S.:

StateAverage monthly cost of renters insuranceHow much you’ll save with Lemonade, on average
California$1766%
New Jersey$1562%
New York$1562%
Texas$2274%
Virginia$1460%

3. Your deductible

An insurance deductible is an amount of money you choose when purchasing a policy that will be subtracted from any future claims payouts. So if your $1,000 watch was stolen, and your deductible was $250, your insurance company would pay you $750.

Insurance deductible

Think of a deductible as your participation in the damage or loss. You’re saying, “I commit X dollars to any claim, and my insurance company will cover the rest.”

The higher your deductible is, the lower your premium could be, but keep in mind that a higher deductible also means you’ll pay a lot more out of pocket in the event of a claim. Different people have different preferences – you’ll have to decide what’s right for yourself at the end of the day.

Relationship between insurance deductibles and premiums

Btw, you can’t make a claim for anything lower than your deductible. So if the replacement cost of your item is lower than your deductible, there’s no point in making a claim since your insurance company won’t be able to reimburse you for anything.

The amount of coverage you need

The Little Mermaid had whoozits and whatsits galore, and we’re willing to bet you do too. From your airpods to your Xbox to your Grandpa’s old cufflinks you’ll never wear, we know you want to make sure your stuff is covered appropriately.

To do so, you’ll need to adjust your renters policy based on your personal needs and lifestyle requirements. And as expected, your monthly renters insurance premium may change according to how much loss of use, personal property, and liability coverage you choose. If you need help figuring out how much personal property (aka, ‘stuff’) coverage to get, check out this guide to how much your stuff is worth.

At Lemonade, a basic renters insurance policy starts at $5 a month and includes $10,000 of personal property coverage. You’ll probably want to get Extra Coverage for those big-ticket items. And with Lemonade’s Live Policy, it’s easier than you’d imagine.

So if you decide your personal belongings are worth around $40,000, you’ll most likely pay more than if your stuff was worth $20,000. If you’re lying awake at night wondering ‘how much is renters insurance?’, first consider how much renters insurance coverage you’ll need, and then you can look into adjusting that premium.

How can I lower my premium?

While monthly prices may cost as much as a latte, adding all of your swag to your policy might leave you looking to lower your price. Luckily, there are some things you can do to help lower your premium.

Your home doesn’t need to be ‘smart’ in order to install some devices that will help to lower renters insurance cost. Start with a standard fire alarm and burglar alarm, and you’ve already lowered your risks. And lowered risks equals lowered premiums. Which equals more lattes?

Don’t forget: You can always update your coverage limits using Lemonade’s Live Policy, whenever and wherever, on the Lemonade app with no brokers or paperwork involved.

What the average cost of renters insurance covers

So what are you getting for your $5/month, anyway? There are more reasons to buy a renters insurance policy than you probably thought. A typical insurance policy covers three main areas:

Let’s start with personal property coverage. This type of coverage helps you pay for lost or damaged items for a bunch of different scenarios, including fire, lightning, windstorm, hail, smoke, vandalism, and theft, to name a few. More good news? Your personal property is covered outside of your home as well. So if your phone gets swiped while you’re paying for your matcha, it’ll be covered.

What about temporary living expenses, or in insurance speak, loss of use? These are the additional living expenses you would face if your home is temporarily unlivable. So if an electric fire or water damage from a burst pipe forces you out of your apartment, your renters insurance policy will cover the cost of a hotel and any additional expenses.

And remember personal liability and medical bills? If one of your friends gets hurt in your apartment, goes to the hospital, and then decides to sue you (what a friend, right?), your liability coverage will kick in for both medical payments and legal fees.

What the cost of renters insurance doesn’t cover

It’s equally important to know what renters insurance doesn’t cover.

Unfortunately, renters insurance coverage isn’t the be-all and end-all. It doesn’t cover those annoying things that sometimes happen, like:

  • Your power, water or heat going out in your condo or apartment in the dead of winter
  • A place to stay because your apartment got infested with bedbugs (eek!)
  • Natural disasters such as floods and earthquakes (or man-made catastrophes such as terrorism, war, and nuclear meltdowns – those require either a separate policy or additional coverage)
  • Your single speed bike after you crash it into a tree, or any other items of considerable value (although you can always add Extra Coverage onto your policy to protect jewelry, fine art, etc.)
  • Oh, and zombie attacks aren’t covered either

Rule of thumb: If it’s not a listed peril on your policy, it’s not a covered loss.

The best part of renters insurance is that you can usually stop and start as you wish. With coverage starting from monthly prices as low as your morning cup of joe, it would be the smart thing to invest that same dollar amount for something much greater than a single caffeine rush – daily peace of mind.

How much renters insurance do I need?

So you’ve been told you need renters insurance, but aren’t sure exactly how much coverage you need…

Renters insurance coverage is kind of like an umbrella. It protects you from a range of bad things that could happen to you and your stuff.

When you sign up for renters insurance you’ll be asked to pick a coverage amount. This means you’ll need to pick how much you’ll want your policy to cover in the event something happens. For let’s say your bag was stolen—how much would you need back to cover the value of the stolen stuff? 

Your renters insurance policy is split up into 4 different coverage areas. 

coverage amounts - college renters insurance

Weigh up how much you think you need in terms of your belongings and lifestyle, and how much you think you can pay monthly. Picking higher coverage will push up your monthly premiums slightly, but on the other hand you don’t want to be left without the right amount of coverage in the worst case scenario. 

If you’re not sure how much your stuff (ie.Personal Property) is worth, here’s a good tip to figure it out. 

Look around your apartment, and mentally calculate the value of all your stuff. How much are your things worth? Think about clothing, furniture, and electronics, but don’t forget about your stuff outside your home, like your bicycle, or that old trumpet you left at your parents’ place.

Long story short, you’ve probably got more stuff than you think… 

Follow these simple steps :

1. Walk around your place, and take a video of everything you have

2. Make a list of your most expensive items and estimate how much they cost

3. Figure out how much your bulk items (like clothes) are worth 

4. Add this up to determine how much coverage you’ll need

Always round up to the nearest $10,000. So, let’s say you have $18,000 worth of items, you should pick around $20,000 for your Personal Property coverage. 

Standard policies start with $10,000 of Personal Property. Boosting your coverage to $30,000 is usually the safer thing to do, and it’s not too pricey. 

As for additional coverage – to insure pricier items like jewelry, cameras, musical instruments, bikes, and fine art – you can generally add stuff separately. This is known as scheduled personal property coverage, or ‘Extra Coverage,’ as we call it at Lemonade.

Still not sure what amount of coverage is right for you? Check out our easy guide to how much renters insurance I need?

categories: #Lemonade101 #Renters

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