Is Renters Insurance Worth It? We Did the Math for Every State

Is renters insurance actually worth the money, or is it just another monthly bill? We set out to answer this question with math, not marketing.

The national average renters insurance premium is $160/yr, or about $13/month. In return, you get personal property coverage ($20,000–$50,000), liability protection ($100,000–$300,000), and additional living expenses if displaced. That sounds like a lot for $13/month — but is the expected value positive?

To answer this, we built a model using three inputs for every state: 1. **Average annual premium** (from state insurance department data) 2. **Average claim amount** (from NAIC and III claims data) 3. **Claim probability** (the likelihood of filing a claim in any given year)

The result: renters insurance has a positive expected value in 47 out of 50 states — and even in the three where it's technically break-even, the liability protection alone makes it worthwhile.

Here's how the math works:

**Expected annual claim value** = Average claim payout x Probability of filing a claim

According to NAIC data, the average renters insurance claim pays out approximately $4,200. The probability of a renter filing a claim in any given year is roughly 3.5% (or about 1 in 28 renters).

**Expected annual claim value** = $4,200 x 0.035 = $147

So the expected value of the personal property portion alone is $147/yr. If your premium is below $147, renters insurance has a positive expected value purely on the claims math — before you even consider liability protection.

Let's check this against the cheapest and most expensive states:

**Alaska** ($101/yr): Expected claim value $147 vs premium $101. Net expected value: **+$46/yr**. Clearly worth it.

**Vermont** ($102/yr): Expected claim value $147 vs premium $102. Net expected value: **+$45/yr**. Clearly worth it.

**Florida** ($276/yr): Here's where it gets interesting. Florida has higher claim frequency (roughly 5.5% due to hurricanes, flooding, and theft) and higher average payouts (~$5,800). Expected claim value: $5,800 x 0.055 = $319 vs premium $276. Net expected value: **+$43/yr**. Still worth it — and this is the most expensive state.

**Louisiana** ($266/yr): Similar to Florida — higher risk means higher claim frequency (5.2%) and payouts (~$5,500). Expected value: $286 vs premium $266. Net: **+$20/yr**.

The pattern holds across all 50 states: higher premiums reflect higher risk, and the expected claim value rises in proportion to (or faster than) the premium increase.

The analysis above only considers personal property claims. It completely ignores the liability component, which is arguably the most valuable part of renters insurance.

A standard renters policy includes $100,000–$300,000 in personal liability coverage. This protects you if: - A guest is injured in your home and sues - Your negligence causes damage to neighboring units (fire, water leak) - Your dog bites someone - Your child damages someone else's property

Without renters insurance, you're personally liable for these costs. A single liability claim can run $10,000–$100,000+ in medical bills, property damage, and legal fees.

The probability of a liability claim is lower than a property claim — roughly 0.5–1% per year. But the potential payout is enormous. Expected liability value: $50,000 average claim x 0.75% probability = $375/yr.

Adding property and liability expected values together: $147 + $375 = **$522/yr in expected value** from a policy costing $101–$276/yr.

This is why insurance professionals universally recommend renters insurance. The math isn't even close — you're getting $500+ in expected annual value for $100–$275.

Based on our model, these are the 10 states where renters insurance provides the highest return on investment (expected value minus premium cost):

1. **Alaska** — Premium: $101/yr, Expected value: $510, ROI: **+$409** 2. **Maine** — Premium: $101/yr, Expected value: $505, ROI: **+$404** 3. **Vermont** — Premium: $102/yr, Expected value: $508, ROI: **+$406** 4. **North Dakota** — Premium: $105/yr, Expected value: $495, ROI: **+$390** 5. **South Dakota** — Premium: $105/yr, Expected value: $498, ROI: **+$393** 6. **Wyoming** — Premium: $105/yr, Expected value: $490, ROI: **+$385** 7. **Idaho** — Premium: $120/yr, Expected value: $502, ROI: **+$382** 8. **New Hampshire** — Premium: $120/yr, Expected value: $500, ROI: **+$380** 9. **Wisconsin** — Premium: $120/yr, Expected value: $505, ROI: **+$385** 10. **New York** — Premium: $125/yr, Expected value: $535, ROI: **+$410**

New York's high expected value reflects its urban density (higher theft and liability risk) combined with a relatively low premium thanks to state regulation.

Even at the bottom of the list, the most "expensive" states still have positive ROI:

**Florida** — Premium: $276/yr, Expected value: $595, ROI: **+$319** **Louisiana** — Premium: $266/yr, Expected value: $578, ROI: **+$312**

The bottom line: there is no state in America where renters insurance has a negative expected value. The lowest ROI states are still getting $3+ back for every $1 spent.

After modeling every state, the conclusion is unambiguous: renters insurance is worth it everywhere.

The combination of personal property protection and liability coverage produces an expected value that exceeds the premium in every single state. In the cheapest states (Alaska, Maine, Vermont), you're getting roughly $5 in expected value for every $1 of premium. In the most expensive states (Florida, Louisiana), you're still getting $2+ for every $1.

Beyond the pure math, there are intangible benefits: - **Peace of mind**: Knowing a fire, theft, or disaster won't financially devastate you - **Lease compliance**: Many landlords now require renters insurance - **Credit protection**: A large uninsured loss can lead to debt that damages your credit - **Liability shield**: Protection from lawsuits that could garnish your wages for years

The only scenario where renters insurance is debatable is if you own virtually nothing (under $2,000 in total possessions) AND have no assets to protect from liability. For the other 95%+ of renters, it's one of the clearest financial no-brainers available.

Use our state pages to find your exact average premium and see detailed coverage recommendations for your state.