Renters insurance cost depends on geographic location, deductible, the insurance company and the particular coverage plan.
According to the Insurance Information Institute, the average cost of renters insurance is $150 to $300 per year. This buys $30,000 to $35,000 of coverage for personal belongings and $100,000 to $300,000 of liability protection.
Why have renter's insurance? If you're currently renting a home, apartment or condominium, damage to the property is insured through the landlord's policy. However, your personal property may not be protected, nor are you protected against a liability lawsuit (such as somebody slipping and falling in your apartment).
What does renter's insurance cover? It usually includes replacement or repair of personal property resulting from wind or hail storms, lightning, fire, smoke, explosions, vandalism, theft, electrical damage, water damage and more, depending on the individual policy. Also, if you're forced to live in a temporary residence due to property damage, renters insurance will cover the related expenses such as the cost of a new place to stay and eating out. Some policies even cover your personal possessions when you're not at home (staying at a hotel, for example).
There are two types of renters insurance: actual cash and replacement cost. Replacement cost coverage costs 15-20% more than actual cash, but is usually worth it because it covers the cost to replace items, whereas actual cash only pays you what the items cost at the time of purchase. This is an important distinction because goods purchased years ago will be worth significantly less than what you paid.
Damage resulting from floods and earthquakes are not covered by renter's insurance and must be bought separately.
Renters insurance is cheaper when a policy is shared among roommates, has a higher deductible, or is purchased through a provider with which you already have insurance (say for a car or motorcycle).