Whether you’re a first-time renter or have been in your third-floor studio for years, renters insurance is one way you can help protect what matters most. But with all the other bills you have to pay, you might be wondering just how much renters insurance will cost you. We’ll help you understand what goes into the cost of renters insurance and how much you can expect to pay.

How much does monthly renters insurance cost?

The average cost of renters insurance is often less than $15 a month. In general, most renters insurance policies are extremely affordable. So for the cost of about three fancy coffees or one large pizza, you could get the coverage you need for your apartment or home.

How is renters insurance calculated?

So how is your renters premium calculated? Here are a few factors that can affect the price of your renters policy:

• Coverage limits
• Location of residence
• Property type
• Replacement cost vs actual cash value
• Deductible amount

We’ve highlighted some questions below to help you better understand the cost of your renters insurance.

What are your coverage limits?

One of the biggest factors that helps determine the cost of your renters insurance is the amount of coverage you have. Every renters insurance policy has standard coverage limits, which are the maximum amount your policy will pay in case you have a claim. Your personal property and liability coverage both offer protection up to two different dollar amounts.

And there are also options to expand your coverage limits to protect valuable items worth more than your limits. Perhaps you have expensive electronics, a pricey new engagement ring — you’ll want to consider scheduled personal property coverage (also known as itemized personal property coverage). This not only gives you a higher coverage amount, but your items will be covered for more types of events.

Just remember that extending your coverage limits will impact the cost of your renters insurance premium.

Will location affect the cost of your renters insurance?

The location of your rental may also affect your insurance rate. If your area is prone to natural disasters or crime, your renters insurance rate will probably be higher than an area that is relatively safer.

Does property type change the cost of renters insurance?

Typically, the type of property you rent doesn’t alter the cost of your renters insurance. It’s more influenced by your location and the coverage limits you select.

Do you need replacement cost coverage with renters insurance?

To ensure you can afford to replace the things you work so hard for, you’ll want to consider adding replacement cost value coverage (RCV). RCV does come with a slightly higher price tag than actual cash value (which pays you what your property is worth today). But, in the event of a covered loss, we’ll replace your property with new property of the same type, kind and quality and you won’t have to worry about paying more than your deductible to fully cover the damaged item. Here’s a closer look at how replacement cost value coverage protects you.

How does a deductible affect the cost of renters insurance?

If you file a claim, your deductible is the amount you’ll pay before your insurance company steps in to cover any additional costs. For example, if your $1,000 TV is stolen and you have a $500 deductible, you’ll pay $500 towards a new TV and your insurer will cover the remaining amount.

Your deductible factors into your renters insurance cost because the higher you set your deductible, the lower your premium will be. And vice versa — the lower your deductible, the higher your premium will be. Find out more about renters insurance and theft.

Renters Insurance Coverage Options

Like coverage limits, many renters insurance policies have the flexibility to be customized to fit your lifestyle. Ask yourself these questions to help you decide if you need additional coverage:

Do you own more than $1,500 in jewelry?

Though your jewelry is covered by your personal property coverage, it’ll only be covered up to a certain amount and for the types of losses specifically listed in your policy. If you own expensive jewelry that’s worth $1,500 or more, consider adding jewelry insurance to make sure your valuables are properly protected. This way, you’ll be covered for a broader range of losses, as well as having higher amounts of coverage. Here’s a closer look at how jewelry insurance works.

Are you concerned about identity theft?

Identity theft isn’t something you can 100% prevent, but it is something you can plan for. Adding identity theft insurance is an inexpensive coverage that helps you through the restoration process after getting your identity stolen. It can help cover expenses such as legal fees, loan reapplication fees, notary expenses and lost wages due to time taken from work to restore your credit.

Do you have a pet?

We offer a special add-on coverage that provides up to $1,000 for veterinarian or final expenses for your dog, cat, fish or bird as a result of a covered loss. You also might want to consider adding an umbrella liability policy since it can help cover costs from property damage or injuries your pet may cause.

Do you run a business from your home or apartment rental?

If you have a business that you run from the comfort of your rental, you’ll want to talk to your agent to make sure everything you work so hard for is properly protected. An agent will help you determine whether your business qualifies as a small home-based business or if you’ll need a more comprehensive commercial policy.

Renters Insurance Discounts

Looking for ways to save on your insurance? American Family Insurance offers a variety of discounts that can lower the average cost of your renters insurance. Some popular discounts include:

• Paperless billing
• Setting up automatic payments
• Buying multiple policies from the same company (also known as bundling)
• Safety discounts
• Equipping your place with smart home technology

It’s always best to check with your agent to make sure you’re taking advantage of every discount you qualify for.

Why do you need renters insurance?

To understand the cost — and ultimately the value — of your renters insurance, it’s important to know how renters insurance protects you. For starters, having renters coverage helps cover the cost to replace your personal property in the event your belongings are damaged by a covered loss.

It also offers liability coverage, which protects you if you’re responsible for injuries to guests or damage to your rental. And renters insurance provides loss of use coverage, which pays for additional living expenses if your place becomes uninhabitable after a covered loss. Don’t forget one of the best benefits of renters insurance — it protects you whether at home or away from it.

The cost of renters insurance varies depending on your coverage and limits — that’s why it’s important to talk with your American Family Insurance agent to find the best policy for your belongings and your budget.

And be sure to check out our Resource and Apartment Resource Hub to learn more about renters insurance, landlords, DIY ideas for your place and more!

This article may include information that represents a brief description of coverages, but this is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Exclusions may apply to policies, endorsements, or riders. Coverage may vary by state and may be subject to change. Some products are not available in every state. Please read your policy and contact your agent for assistance.