How Much Does Renters Insurance Cost?

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If the thought of another $100-plus monthly expense is keeping you from buying renters insurance, you should know a renters insurance policy isn’t likely to cost nearly that much.

The average cost of renters insurance in the U.S. was $188 a year, or just over $15 a month, in 2015 per data from a 2017 report by the National Association of Insurance Commissioners (NAIC), ranging from a high of $262 to a low of $114.

Now that you know that the cost of renters insurance is closer to a car wash than a car payment, read on to learn more about how that number is determined:

How Much Does Renters Insurance Cost in Each State?

Given that your neighborhood and building type can influence your premiums, it stands to reason the cost of renters insurance varies dramatically across state lines. Keep in mind, though, pricing gets more granular than that, and the cost of renters insurance can also vary dramatically across any given state.

With that caveat in mind, here are the average annual renters insurance premiums in each one as of 2015, per the NAIC:

 

State Avg. Annual Premium
Alabama $242
Alaska $172
Arizona $191
Arkansas $214
California $202
Colorado $166
Connecticut $201
Delaware $156
District of Columbia $158
Florida $195
Georgia $226
Hawaii $201
Idaho $155
Illinois $173
Indiana $183
Iowa $146
Kansas $177
Kentucky $172
Louisiana $249
Maine $147
Maryland $161
Massachusetts $196
Michigan $203
Minnesota $144
Mississippi $262
Missouri $180
Montana $147
Nebraska $149
Nevada $189
New Hampshire $150
New Jersey $171
New Mexico $191
New York $202
North Carolina $154
North Dakota $114
Ohio $185
Oklahoma $242
Oregon $166
Pennsylvania $156
Rhode Island $179
South Carolina $192
South Dakota $121
Tennessee $210
Texas $241
Utah $149
Vermont $155
Virginia $153
Washington $169
West Virginia $186
Wisconsin $132
Wyoming $153
United States $188

The most expensive states for renters insurance

The unifying theme here: Extreme weather. Mississippi, Texas, Louisiana and Alabama are coastal and susceptible to strong storms, while Oklahoma has a tornado problem.

  1. Mississippi: $262
  2. Louisiana: $249
  3. Alabama & Oklahoma (tie): $242
  4. Texas: $241
  5. Georgia: $226

The cheapest states for renters insurance

Conversely, the states with the cheapest renters insurance are much more insulated from extreme weather and natural disasters. Is it worth moving to cut your renters insurance rates? We’re gonna go with … no. But it’s good to know about state-by-state disparities if you’re planning a move so you can account for the cost difference in your budget, or just understand why cousin Beth in North Dakota is paying so much less to insure her apartment than you are.

  1. North Dakota: $114
  2. South Dakota: $121
  3. Wisconsin: $132
  4. Minnesota: $144
  5. Iowa: $146

What Determines the Cost of Renters Insurance?

Renters insurance provides protection for your belongings, plus some liability coverage for good measure. Renters insurance rates are determined by a few factors, some of which you can choose, and some of which you can’t.

Renters insurance cost factors that are set by your circumstances:

  • Your location: Renters insurance rates can vary widely by location (see the table below) and can even vary within cities and neighborhoods and property by property (older buildings tend to cost more, while newer buildings with more security and safety features can garner lower premiums).
  • Your credit score: Your credit score influences a lot of the rates you’ll get in your financial life, and renters insurance is among them. A good credit score is considered a sign of financial wellness and is a big factor in lowering your premiums.
  • How much stuff you have: Generally, the more value your home inventory has, the more it’ll cost to insure. We’re saying value because, while having a lot to insure generally costs more, the total price of your possessions is the real driver here. So a two-bedroom full of Ikea furniture may be valued less than a studio full of Eames.

Renters insurance cost factors that are set by your choices:

  • How much coverage you want: More coverage costs more money. If you’re willing to accept lower payouts in the event of a claim, then your premiums will be lower. And if you’re willing to gamble that your entire vintage guitar collection isn’t covered, then you’ll save some money upfront. But if you want higher coverage limits and additional riders for expensive items (and you probably do), expect your premiums to be higher than if you just had a thrift store bed and a beater guitar.
  • How high (or low) you want your deductible to be: That’s the amount of money you pay out of pocket before your coverage kicks in. The higher your deductible, the lower your premium.
  • How you want to be paid in the event of a claim: Actual cash value renters insurance will pay you the value of belongings at the time of a claim, not the price you paid for them or the price it would cost to replace them. Replacement cost renters insurance covers the cost of repairing or replacing the item at the time of the claim. Replacement cost renters insurance pays out a lot more if you need to file a claim, but it also costs more.

How Do Coverage Choices Affect Price?

Since your circumstances are generally set, it’s your choices about coverage that allow you to have some leeway over the rates you’ll get. Find out how your choices can change your premiums.

What does a basic renters insurance policy cost?

The average renters insurance policy costs between $120 and $190 a year. These basic policies generally offer $25,000 personal property coverage, $100,000 liability protection, and a $500 deductible, though those numbers are just ballpark figures and your particular insurance company’s basic coverage may be different.

Some examples of what a basic renters insurance policy will cover:

  • At least part of the replacement cost of a laptop that gets fried by a water damage from a burst pipe.
  • Some coverage for medical expenses if a friend gets hurt making a smoothie in your apartment — plus some court expenses if that friend decides to sue you.
  • Coverage for personal property that is stolen when you’re away from home.
  • If a covered event renders your apartment uninhabitable, your policy will also pay additional living expenses so you can stay in a hotel during repairs.

Check out our deep dive on what renters insurance does and doesn’t cover.

What is the cheapest renters insurance you can buy?

The cheapest renters insurance will have the least amount of coverage. If you opt for low coverage amounts for personal property (say, $10,000), personal liability ($100,000), and medical payments to others ($1,000) and you choose a high deductible ($500 to $2,500), you can conceivably get renters insurance for as little as $5 to $8 a month.

Learn more about how to buy cheap renters insurance online.

How much does more coverage cost?

As you up the coverage limits of your renters policy, you also up your premiums. But remember, renters insurance is super affordable, so even huge leaps in coverage can result in just a few more dollars a month.

For example, if you increase to the most common coverage amounts — $25,000 for personal property, $300,000 for personal liability, and $2,000 for medical payments to others — your premiums can still often be under $20 per month.

You can also purchase riders to increase your coverage for specific belongings, so if a basic policy only covers $1,000 worth of jewelry but you have a $5,000 ring, a rider could make up the coverage difference.

Riders are also available to add to your policy that cover you and your belongings in more situations. For example, renters insurance policies don’t cover earthquakes, but you can purchase a rider so that you will be covered in the event of a seismic disaster.

These additions can be as low as a few more dollars a month, or in some cases, even less than that.

Read more about popular renters insurance riders, floaters, and endorsements.

How can you save on renters insurance?

You can lower your insurance rate by increasing the number of safety and security features in your home. Many renters insurance companies offer discounts if you have one or more of the following features in your home:

  • Local fire/smoke alarms (sounds in home)
  • Central fire/smoke alarms (alerts monitoring system)
  • Automatic sprinklers
  • Fire extinguisher
  • Local burglar alarm (sounds in home)
  • Central burglar alarm (alerts monitoring system)
  • Deadbolt lock

Some companies also offer discounts if you bundle your renters insurance plan with another plan, like auto insurance, or if you pay your annual premium at once instead of monthly.

Finally, another huge way to save: increase your credit score. This one takes time, but as your score gets higher, you can get better renters insurance rates.


Colin Lalley is a writer for Policygenius, an online life insurance site with one purpose: “To get people the insurance coverage they need and make them feel good about it.”’ Please note that this editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you. 
This post originally appeared on Policygenius.

How Moving Helped Me Pay off $107,000 in Student Loans

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Student loan debt is higher than ever, with 44 million Americans owing $1.48 trillion on their student loans. In fact, the average Class of 2017 graduate left school owing $39,400.

Assuming a 4.45% interest rate and a 10-year repayment plan, a balance of that size would require a monthly payment of $407.

That’s a serious burden for new graduates, let alone anyone facing today’s sluggish wage growth and sky-high rent.

So here’s an out-of-the-box idea for conquering your student loans: Move to another state. I moved from New York City to Austin, Texas, and it helped me pay off $107,000 in student loans.

Here’s how this decision helped my finances, along with surprising reasons why relocating could help yours, too.

Moving seriously lowered my cost of living

Andy Josuweit, CEO of Student Loan Hero

I attended Bentley University and majored in managerial economics. My degree helped me start my business, Student Loan Hero, but it also left me saddled with $74,000 in student loans.

In total, I had 16 different loans from four different loan servicers, none of which helped me understand my repayment options. I put some of these loans into deferment, only to watch my balance balloon to $107,000.

Between the stress of carrying all this debt and the challenges of starting a business, I realized that living in New York, one of the country’s most expensive cities, might not be the best idea for my finances.

In 2015, I decided to move to Austin. I’d heard the quality of life there was great, and I loved its mix of urban culture with outdoor activities. Having grown up in rural Pennsylvania, I was drawn to a city that still had trees and nature.

Plus, the cost of living in Austin was a lower than in NYC. In New York, the median rent for a one-bedroom apartment is $2,070, according to Apartment List. But in Austin, the median cost is just $1,120, nearly half that of New York.

Overall, Numbeo found that rent prices in New York are 97.6% higher than in Austin. Even groceries are 47.26% higher in the Big Apple!

Besides enjoying more affordable rent and food, I also saved money by not owning a car my first two years in Austin. I mainly relied on my bike to get around.

Of course, this might not be an option for a lot of Americans, especially for those who don’t live in cities with many options for public transportation.

In my case, though, giving up my car helped me reach my financial goals.

Relocating could help you save on state income taxes

Decreasing my cost of living wasn’t the only reason I saved money by moving to the Lone Star State. My tax bill also decreased significantly, since Texas doesn’t have state income taxes.

It’s one of seven states that don’t have an income tax. The full list includes:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Additionally, New Hampshire and Tennessee only tax interest and dividend income, which is money you make from stocks or mutual funds.

Between lowering my cost of living and eliminating state and municipal income taxes, I saved over $15,000 by relocating to Austin. Thanks to these savings, I was able to make extra payments on my student loans.

“If you put those savings toward your student loans, you could get out of debt 67 months earlier and save $7,193 on interest.”

As a result, I started to see my student loan balances go down. Not only did I save money on interest, but I also watched my six-figure balance return to a manageable level within a year.

I had been tackling my balance as aggressively as I could since 2013, and moving to Austin helped me pay it off even faster. In August 2016, I made my last payment on my student loans.

How much you save

Since my move helped my finances so much, I was curious about what impact a similar strategy could have for other Americans. To find out, Student Loan Hero conducted a study on the financial impact of relocating to a state with no state income taxes.

Student Loan Calculator

We learned that moving to a state with no income tax would save the average person $1,977 per year. We also found that nearly one out of three people said they would move to an income tax-free state if it meant they’d save money.

Although this number seems fairly high, it’s not all that surprising that debt, taxes, and finances affect where people choose to live.

If you’re interested in how moving could affect your finances, check out the state tax savings calculator in the study. It compares costs between two states and reveals how moving would impact your student loans.

If you’re considering a move, be sure to compare the cost of living between your current and prospective cities. But if you’re focusing on state income taxes, the calculator reveals how much you could save year to year.

For example, let’s say you’re living in Oregon and making $60,000 per year. You only have one exemption, and you owe $25,000 in student loans at a 5.70% interest rate. By moving up to Washington, you could save $4,777 per year on state income taxes.

If you put those savings toward your student loans, you could get out of debt 67 months earlier and save $7,193 on interest.

Should you move to pay off your student loans faster?

Although I’ve been discussing how much you can save by moving to another state, there are expenses involved in relocating. For one, you have to pay for the move itself. Plus, you must make sure the new destination has job opportunities in your field unless you’re capable of working remotely.

If you’re considering a move, ask yourself these essential questions:

  • Can I find a job in my line of work?
  • Can I work remotely in my current role?
  • How much in moving expenses will I have to cover?
  • What will my new cost of living look like?
  • Is the new state a good fit for me in terms of climate, culture and other factors?

You might also estimate your moving costs with HireAHelper’s moving cost calculator. This tool gives you a quote based on your old and new zip codes so you can prepare for the expenses of your move. The great news is that there are many moving options to considerably lower your moving costs, which you can read about here.

Moving Cost Calculator at Moving101.HireAHelper.com

As long as you’ve done your due diligence, moving could be a smart financial move. With the money you save by choosing an affordable city over an expensive one, you could pay off your student loans ahead of schedule and move closer to a debt-free life.

Saving money, by the way, might not be the only perk in moving. In Austin, I now enjoy 228 days of sunshine, not to mention some of the best tacos I’ve ever had.


Andrew Josuweit Bio: Andrew Josuweit is CEO and Co-Founder of Student Loan Hero. After he graduated with $107,000 in student loan debt, he realized he wanted to help others become debt-free and financially independent.
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