Best Renters Insurance Companies

Best Renters Insurance Companies

Just like insurance for homeowners, there is insurance to protect renters. Is renter’s insurance a racket or does it make sense? We’ll look at the benefits and costs of having renter’s insurance and then give you a quick overview and assessment of different renter insurance companies.

Renting is becoming more common than homeownership. Some rental complexes offer insurance through a company like ePremium or erenterplan. These aren’t bad companies, but can be more expensive and offer less coverage than privately purchased renter’s insurance.

Is Renters Insurance Worth the Cost?
Renters insurance averages about $15 to $30 a month. Your landlord’s home insurance policy covers the landlord’s property and only rarely covers the renter’s belongings. If something happens to your stuff, you’ll be out the cost to replace it.

Who Should Get Renters insurance?
College Students
If you live on campus, having a renter’s policy is fairly cheap. You may even be covered by your parents’ personal property coverage, although generally limited to 10% of your parents’ personal property coverage. If that doesn’t cover the cost to replace your belongings, consider getting a policy.
If you live off-campus, you definitely need a policy. You might think you don’t have much, but it will cost a lot to replace your computer, phone and other belongings – generally estimated at $30,000.

Adult Renters
If you have recently graduated from college and are working, you are probably in the process of upgrading your belongings from college cheap to professional chic. You need renters coverage to make certain you can replace your newly acquired swag. In any case, you may continue to rent instead of buying, so protect your belongings.

Senior Citizens
After retirement, it might make sense to sell your home and move into a rental. Living on a fixed income can make it difficult to replace your belongings or you may have more expensive jewelry, artwork, or heirlooms that needs protection.

Types of Renters Insurance Coverage
Like homeowner’s insurance, you can choose how much to cover. Remember that not all events are covered. Your policy will clearly lay out what is covered. Sinkholes, earthquakes, hurricanes, floods, and terrorist acts, among many, are probably not covered. Ask your agent and read your policy carefully. Generally, renters insurance will cover theft, water damage, vandalism, fire, smoke, and lightening.

When you are comparing insurance policies, look for coverage of the following:

  • Personal Property Coverage – items used on a daily basis, like clothing, furniture, etc. Your personal property coverage limits should be at or near the total value of your belongings. If you have expensive items, make certain these are covered. Really expensive items may need a rider or special documentation. Generally, items are covered no matter where they are. If you are at class when your laptop is taken, you should be covered. Again, read your policy!
  • Liability Coverage – this protects you if someone is injured in an accident involving your or a family member. For instance, someone falls over your couch and is injured. It’s your couch, not your landlord’s, so you are liable. A standard renters insurance policy legal liability coverage covers tenants up to $100,000, although higher coverage is available.
  • Medical Payments to Others – this covers medical costs for a guest who is injured in your rental. It doesn’t cover you or other members of the household.  
  • Additional Living Expenses/Loss of Use – this covers your living expenses if your rental is damaged and you are temporarily displaced. Read your policy for specific coverage. Coverage limits are usually a percentage of total personal property coverage limits.
    Extended Coverage – if you have something particularly valuable, you may need additional coverage or a floater policy.

What Affects Renters Insurance Costs?

Before you purchase renters insurance, you need to make some decisions. Each of these will affect how much you pay.

  • Level of coverage – how much do you need to have insured and how much will it cost to replace it?

  • Location – high crime, higher chance of natural disasters, etc will affect your rates.
  • Deductible – how much you can afford to pay before insurance kicks in. A higher deductible means a lower rate, but you will have to come up with that amount to cover your replacements costs.

  • Replacement cost vs. actual cash value – you may be offered this choice and it will affect your rate. Replacement cost means that you will receive the amount that it will cost to replace your belongings. Actual cash value is what the item is worth at the time of loss. Replacement is more expensive but means you will be able to replace your belongings.
  • Discounts
    If you already have insurance with a company, you may be able to get discounts on your renters insurance. These include:
    • Multi-Policy – if you already have a policy, like car insurance
    • Claims-Free Discount – available if you have no claims over a specified period of time
    • Protective Devices – possibly available if you have fire or smoke detectors or a home security system

How Much Do You Need?
How much renters insurance you need depend on how much stuff you have and how valuable it is. Overestimating the value means you’ll pay more, while undervaluing your belongings means you won’t be able to replace them. Most leading renters insurance companies have a calculator to help you. Try the Allstate What’s Your Stuff Worth? tool. It’s easy and walks you through each room. At the end you’ll have a good idea of the replacement value.

Another terrific app is the Allstate Digital Locker app. With this app you can document all your possessions along with values. By using this app, you can get a more precise replacement value and file a claim more easily. It’s available on Apple and Android platforms.

Best Renters Insurance
What are the best renters insurance companies?

Allstate Renters Insurance
Known for: Technology-savvy policyholders and online tools
Financial Strength Rating: A+ (Superior)
J.D. Power Ranking:  No. 5 for overall satisfaction
Special: Can exclude off-premise protection. Generally regarded as the most expensive renters insurance

Nationwide Renters Insurance
Known for: Extended Coverages
Financial Strength Rating: A+ (Superior)
J.D. Power Ranking: No.1 in overall satisfaction
Special: more expensive than State Farm or Liberty Mutual

Liberty Mutual Renters Insurance
Known for: Discounts
Financial Strength Rating: A (Excellent)
Special: second cheapest renters insurance policies

American Family Renters Insurance
Known for: Competitive Rates
Financial Strength Rating: A (Excellent)
Special: Average or better customer service ratings

State Farm Renters Insurance
Known for: Cheap rates, policy Management Financial Strength Rating: A++ (Superior)
J.D. Power: No 3 For Overall Satisfaction
Special: Highly competitive rates in populous states. Offers highly customizable renters insurance policies

MetLife Renters Insurance
Known for: Customer Service
Financial Strength Rating: A+ (Superior)
Special: customizable policies

USAA Renters Insurance
Known for: U.S. military and their families
Financial Strength Rating: A++ (Superior)
J.D. Power Ranking
Special: coverage against floods, earthquakes, windstorms and lighting. Competitive rates. Familiarity with military conditions

AARP Renters Insurance
Known for: People over 50
Financial Strength Rating: A++ (Superior)
Special: lots of perks for the over 50 crowd

Erie Renters Insurance
Known for: High ratings and reviews
Financial Strength Rating: A+ (Superior)
J.D. Power Ranking No. 1 for overall satisfaction
Special: Only available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and Washington, D.C.

Lemonade Renters Insurance
Known for: Quick coverage in a matter of minutes
Financial Strength Rating: Not currently rated
Special: Currently available in Arizona, California, District of Columbia, Georgia, Illinois, Iowa, Maryland, Michigan, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, and Wisconsin

Farmers Renters Insurance
Known for: Customizable policies
Financial Strength Rating: A (Excellent)
Special: second most expensive insurer but very customizable

Geico Renters Insurance
Known for: Very inexpensive, marginal customer satisfaction
Financial Strength Rating: A++ (Superior)

Assurant Renters Insurance
Known for: Expensive
Financial Strength Rating: A (Excellent)
Special: Does offer pet damage policies

Our Take
Get the best renters insurance you can afford! Read the fine print and understand what you are paying for.