Digging into the numbers provides insight into how this insurance works, who uses it, and its numerous benefits

Key takeaways:

  • 57% of US renters have renters insurance, a number that has steadily increased in the past decade.
  • The average premium in New York state is $185 annually and $175 nationally.
  • Renters insurance offers coverage for various damages and potential liability, plus some policies pay for temporary living expenses.

If you own a home and have a mortgage, homeowners insurance is usually mandatory. Your lender will demand this coverage before finalizing any agreement to ensure you’re protecting the investment. However, the same can’t be said for renters insurance. 

It’s up to the individual or landlord to determine if renters have this coverage. And many of the latter don’t make this part of a lease agreement because finding suitable tenants is challenging enough. For their part, many individuals don’t take out policies because they think renters coverage is unnecessary, don’t know what it does, or (mistakenly) believe it’s expensive.

Of course, renters insurance is a good idea because it protects the contents of your home from theft or damage. It also provides liability protection if a guest is injured while on the property and could offer loss-of-use coverage to pay for living expenses if the property becomes unlivable. 

Looking into the numbers provides a greater understanding of this insurance and its workings. Here’s a peek at some renters insurance statistics you should know.

How many people have renters insurance

Renters insurance is becoming far more common, as the Insurance Information Institute’s most recent stats show that 57% of renters in the United States have a policy. That number is up from 42% in 2018, 37% in 2014, and 31% in 2012. More renters are learning the importance of these policies and taking the necessary precautions to protect themselves and their belongings.

Renter demographics could also be one reason for the shift, as renters aged 30 and under occupy 49% of all rental properties in the United States. Many of these individuals don’t necessarily have a financial safety net to bail them out if they’re hit with theft, damage, or a lawsuit. Coupled with the relatively modest cost of policies (that we’ll cover below), the cost-benefit equation is sound.

About 10% of renters believe they live in a high-crime neighborhood, too, while 25% say petty crime is common in the area they’re renting. These numbers could drive at least some of the growth in renters insurance in certain parts of the country.

The cost of renters policies

So, how much does renters insurance cost? Since it only covers contents, liability, and possibly displacement rather than the actual building, the premiums are far lower than homeowners insurance. Including the structure in the renters insurance package would be redundant anyway, as the property owner already has a landlord policy.

Like the cost of home insurance, the premiums you’ll pay depend on where you live. New York is on the higher end of the scale at $185 per year vs. the national average of $175 but is still very affordable for most renters. The country’s highest premiums are in Mississippi, where renters insurance costs $252 per year, while the lowest are in North Dakota, which averages $115. 

When you break fees down on a month-by-month basis, you can see that renters insurance in New York averages a little over $15 per month while providing excellent coverage in an emergency.

Information on deductibles

Policyholders must pay a deductible before receiving reimbursement through the insurance policy. Providers often deduct this amount from a payout to streamline the process. Renters insurance deductibles typically sit between $500 and $1,000, so the policy kicks in once damage reaches that amount. 

While those deductibles might seem significant, one burglary or lawsuit will easily eclipse those numbers. It’s also worth noting that increasing the deductible can lower annual premiums.

What the insurance covers

The items your renters insurance covers depend on the policy you choose. 

Typically, a policy shields personal possessions from fire, flooding, electrical issues, specific weather damage, vandalism, and theft. However, the amount of coverage received depends on the policy. Renters with extremely high-value items might need an insurance floater to ensure they’re covered fully. Speak with your agent or provider to see if this additional coverage is necessary. 

A policy should also offer liability coverage, so you don’t have to pay out of pocket if someone is hurt while visiting you and decides to sue. The insurance covers legal fees and court judgments up to the policy limit. The liability limit depends on what you choose, but coverage typically starts at $100,000 and goes up to $300,000. You’ll want to determine your personal risk when selecting liability coverage as part of your insurance policy and may consider adding umbrella coverage if that makes sense.

Many renters insurance policies will cover temporary living expenses, too, although this coverage isn’t always included in a standard policy. If you opt for it, you will receive reimbursement for meals, hotels, and other mandatory expenses if your rental becomes uninhabitable.

Finding renters coverage to meet your needs

Renters insurance is becoming more common as more renters understand its benefits. Leaving yourself without this safety net is risky because you could be on the hook for legal fees and replacing all your belongings if the unforeseen occurs. This coverage is also quite affordable, especially when factoring in the benefits.

NICRIS Insurance provides personal, life, and commercial insurance in New York state. Our team can work with you to develop the ideal renters or homeowners insurance plan, reducing your day-to-day risk. Contact NICRIS today for a free insurance assessment or to receive a quote.