Renters Insurance Deductibles: How Do They Work?

WRITTEN BY: Mark Romero


Part of choosing the best renters insurance policy is choosing what deductible is right for you. A deductible is an amount you pay out of your pocket when a claim is made on your renters insurance policy.

If you have a high renters insurance deductible, it lowers the price of your monthly premium. The choice you want to make is whether you want a higher monthly payment or a higher out-of-pocket deductible.

What Is A Renters Insurance Deductible?

If you make a claim on your renters insurance, your deductible is the amount you pay to repair or replace your personal property before your insurance kicks in. Your insurer deducts your deductible from the amount they have to pay to cover your expenses. The deductible only applies to your personal property coverage, including jewelry, furniture, clothes, electronics, gear, and other possessions.

You don’t have to pay a deductible for additional living expenses, medical payments, or personal liability coverage.

How does my deductible affect the cost of renters insurance?

If you have a higher deductible, that lowers your renters insurance premium and vice versa. The great part is you can choose a lower deductible that works right for your lifestyle. You can ensure your premium is affordable while protecting yourself from financial hardship if you file a claim.

Regardless of the type of deductible you choose, it’s important not to file an insurance claim unless you have a major loss. Claims always increase your insurance, and if you file too many claims, your insurance company might not renew your policy.

Are there cheap ways to lower my renters insurance deductible?

There are a few ways you can reduce your renters insurance deductible.

  • Bundling: It’s possible to bundle your renters and auto insurance to reduce your out-of-pocket costs if an incident requires you to file a claim on both policies. By bundling, you save money on your premium.
  • Schedule Personal Property: One way to partially reduce your renters insurance deductible is only available for valuables such as art and jewelry. Most coverages have caps of up to $1,500 but buying extra insurance coverage saves money in the long run. It makes your policy higher, but they have a separate deductible lower than the one in your base policy.
  • Diminishing Deductible: A great way to save money is to choose an insurance company that offers a diminishing deductible. Allstate and American Family offer diminishing deductibles that reduce your deductible by roughly $100 after each claim-free year.

Which Renters Insurance Deductible Should You Choose?

When choosing a deductible, it’s the trade-off between the benefits of a lower deductible compared to paying a higher premium. Your policy premium is what you pay monthly or yearly for insurance coverage. If you have a low deductible, your premium is higher, as your insurance company pays more if you make a claim.

The low deductible is only beneficial if you make a claim. If you never make a claim, you’ll never use your deductible, and the benefits of a pricier policy are pointless.

Why do insurance companies have deductibles?

The purpose of an insurance deductible is to share the risk between the policyholder and the insurance company. There’s also accountability, so if you’re making a claim, you must pay some costs.

This reduces the number of small claims, as your insurance doesn’t pay out unless your claim is above your deductible amount. It also reduces the risk of insurance fraud because if people have to put their own money in, they’re less likely to commit fraud.

How much should my deductible be?

On average, renters insurance deductibles are roughly between $500 to $2,000. Some companies go as low as $100 or even $0 deductibles for renters, while other carriers work with you to find a specific amount. Some offer a percentage of your policy’s personal coverage. You pay $500 on a claim of $5,000 if they offer you 10% on your policy’s coverage.

What Does Renters Insurance Cover?

It’s important to understand your coverage before you purchase renters insurance coverage. There are four types of coverage, each designed for different expenses. One type of coverage covers your legal expenses if you’re sued, while another pays out if your belongings are destroyed in a fire.

Each one only pays up to the limit of that coverage. Renters insurance also doesn’t cover flood damage to your property. You must purchase separate flood insurance to protect your belongings.

These four coverage types are typically in all renters insurance policies:

  • Personal Property: Covers furniture, clothing, electronics, and other belongings.
  • Medical Payments: Covers injuries to other people in your home, despite who’s at fault.
  • Loss Of Use: Pays for hotel stays, restaurant meals, and other expenses if you have to stay elsewhere if your home has suffered damages.
  • Liability: Pays out if you’re responsible for other people’s injuries or damage to their property.

How much of a deductible can you afford?

Choosing your deductible amount is part of applying for the coverage you desire. You need to determine the affordable amount for a premium and how much for your deductible. These are a few things to consider when choosing how much your deductible is.

Think about what is affordable if you must file a claim

Consider your budget and whether you have emergency savings in a pinch. It’s tempting to want a low premium, but the deductible you select should not be so high that it creates a financial hardship for you. 

If you determine that $1,000 is affordable for a deductible, contact your insurance agent to get a quote for your premium and deductible together.


How does a deductible work on renters insurance?

A deductible is an out-of-pocket amount when you make a renters insurance claim.

Is it better to have a $500 deductible or $1000 for renters insurance?

Increasing your deductible to $1,000 decreases your annual premium by roughly $12.

What does it mean to have a $250 deductible for renters insurance?

An insurance plan that has a $250 deductible costs 20% more than a larger deductible plan. Finding an affordable higher deductible is best, so your premium isn’t high.

What does it mean when you have a $1000 deductible for renters insurance?

It means that your premium is going to be a lot lower. If you have a $10,000 claim, you pay $1,000 for your deductible, and your insurer pays $9,000.

Is it possible to have a $0 deductible for renters insurance?

Yes, getting a low deductible, even $0 deductibles for renters insurance, is possible. But that depends on the company and how they calculate deductibles.

How to Find the Best Renters Insurance Deductible

Purchasing cheap renters insurance through a reputable home insurance company is easy. Ensuring you have the right coverage to protect your personal belongings is essential.

If you’re ready to get a renters insurance quote, it’s as simple as comparing rates with an insurance agent, as amounts vary by company. We have a helpful tool to find the best renters insurance.