How to Estimate Your Renters Insurance Cost

To estimate how much renters insurance you need and how much it will cost, you'll need to consider four things:

The value of your personal property, how much liability coverage you need, where you live and any other extra coverages you might want to add, based on your circumstances.

As with all policies, the more renters insurance coverage you buy, the more you'll pay in premiums. But correctly calculating the amount you'll need will ensure adequate protection without pricey, unnecessary add-ons. A basic policy is fairly inexpensive — ** $10 to $30 per month** — so if you're paying more than that, consider looking for cheaper coverage.

Calculate the value of your personal property

Renters insurance covers damage to your personal property, up to the policy's limit. So, to estimate how much personal property coverage you need, create a list of all of your belongings.

Categories of items to include:

Then estimate their worth. Start with the highest-value items, like electronics and furniture, and work your way down. Personal property insurance is usually sold in $10,000 increments, so once you've taken care of the pricier items, you can better estimate how much coverage you'll need, without having to price every book and T-shirt.

Creating a detailed list of your belongings, including when you bought each and what you paid, will also make your life a lot easier if you ever need to make a claim. This is especially true if your belongings are stolen or completely destroyed, such as by a fire. Taking photographs will also speed the process, both while you're calculating coverage and if you ever need to make a claim.

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Not all personal property is covered by renters insurance

A few things aren't covered by renters insurance. One is your car, since that's covered by auto insurance. Another is the structure of your apartment, which is protected by your landlord's property insurance. And high-value items, such as jewelry, cash or gold, might not be covered or could be subject to dollar limits. For example, a standard renters insurance policy might only cover up to $1,500 for jewelry. If your $5,000 engagement ring were stolen, you'd be responsible for paying the other $3,500 to replace it.

Own any high-value items that would have limited coverage under your policy? Consider adding an endorsement or floater that will protect your valuables for their entire worth.

Actual cash value or replacement cost value?

There are two ways your property can be valued: actual cash value (ACV) or replacement cost value (RCV). ACV subtracts depreciation from reimbursement. So if you bought a laptop three years ago for $1,000 and it's depreciated by 60% at the time of the claim, you'd only get $400, minus your deductible. RCV, on the other hand, pays the total cost to replace the item with a brand-new version. So you'd get the full $1,000 for the laptop — again, minus your deductible.

Some renters insurance companies allow you to choose between ACV and RCV. You'll pay a little extra for RCV. But some companies only offer one or the other, so consider that before committing to a renters insurance company.

Estimate how much liability coverage you'll need

Another key part of renters insurance is liability coverage, which protects you financially if you are legally liable for another person's medical bills or other damage. Someone might make a liability claim against your insurance, for example, if they slip and fall in your apartment or your dog bites them.

Generally speaking, the more assets you have and the more high-liability activities you participate in, the more liability coverage you should buy. People are more likely to bring a lawsuit if they believe you have enough money to pay a settlement. And if you engage in high-liability activities, such as frequently having houseguests, owning a dog or employing domestic workers, you're more likely to have a claim made against you.

If you feel you're at an especially high risk of a lawsuit, consider an umbrella policy to boost your liability coverage. It typically starts at $1 million of coverage for a few hundred extra dollars per year.

Renters insurance costs across the country

The monthly cost of renters insurance varies across the United States. For example, the cheapest states for renters insurance are Maine, New Hampshire and South Dakota, at only $12 per month. Meanwhile, the most expensive state is Louisiana, where renters pay an average of $34 monthly. You can see a breakdown of renters insurance costs by state here.

The cost can vary within a state, too. For example, the two most expensive places for renters insurance are Beverly Hills, California, a wealthy suburb just outside of Los Angeles, and Oakland, California, where renters can expect to pay $30.33 and $27.33 per month, respectively. In Santa Maria, California, it's about $13.83, which is the cheapest in the state.

Extra coverages you might need

In addition to the most typical parts of renters insurance — personal property and liability coverage — companies often provide additional coverages. Some are included in a standard policy, while others come with an additional fee. You should include the fee in your calculations.

Here are the additional and optional coverages available from four top renters insurance providers: Allstate, Erie, Lemonade and State Farm.