Who needs renter’s insurance? Answer: anyone who rents a house or an apartment.
Many tenants believe they’d be covered by their landlord’s insurance. Unfortunately, when disaster strikes, they learn they have no insurance protection at all. According to the National Association of Insurance Commissioners and the Insurance Information Institute, the average cost of rental insurance is anywhere from $15 to $30 a month.
Not only should you get renter’s insurance – you should get the best renter’s insurance, a policy blending the most comprehensive coverage with the most reasonable insurance rates.
We’ve prepared a list of the best renter’s insurance companies, checking their financial standings with JD Power and AM Best, making sure your belongings from personal property damage are covered as a tenant. We haven’t ranked these providers in any specific order; we’ve just identified each provider for the niche in which it stands out.
Once you decide what your own personal renter’s policy niche is, choosing the best renter’s insurance company will be easy.
Best Renters Insurance Companies for 2020
Here are the top 9 providers of the best renters insurance:
- Lemonade: Best for Low Premiums
- USAA: Best Rental Insurance for Current and Former Military
- Policygenius: Best for Shopping Between Multiple Carriers
- Amica: Best for Paying Claims
- Erie Insurance: Best for Customer Service
- Allstate: Best for Complete Insurance Coverage
- The Hanover: Best for Comprehensive Plans
- Nationwide: Best for Extended Coverage
- State Farm: Best for Policy Management
Lemonade advertises quick renters insurance coverage as low as $5 per month, and in some states, coverage is available with no deductible.
That’s not hard to believe given Lemonade functions as a peer-to-peer insurance platform specializing in homeowner’s insurance and renter’s insurance. Known for ease, Lemonade’s mobile app allows you to get a renters insurance quote and start your personal property coverage almost immediately.
The company is more transparent than most traditional insurance companies. All members pay in monthly premiums, and Lemonade uses these pooled funds to pay out claims.
Here’s where Lemonade stands out: The insurer takes a 20 percent cut of paid premiums for administrative costs and then donates whatever’s left at the end of the fiscal year to specific charities. Because the company doesn’t operate for profit, it’s much more likely to pay out claims and pay them quickly.
Lemonade offers a basic renters policy at a low base rate and then allows you to add “extra coverage” for high dollar value items in your home. They also cover your personal property anywhere in the world.
Learn More: Read our Lemonade Renters Insurance Review.
- Low Costs: The company offers the lowest renter’s insurance policies available due to the unique nature of its business model.
- No Deductible Required: In some states, there is no deductible required.
- Quickly Pays Claims: And because the company operates as a nonprofit, it’s more likely to pay out claims quickly.
- Limited Options: Lemonade’s coverage limits to homeowner’s and renter’s insurance. If you need other types of coverage options, you’ll need to go with other companies like Liberty Mutual or American Family Insurance.
- Limited Availability: Also, the company is currently active in only 26 states and the District of Columbia. However, they have plans to expand into 22 more.
USAA scores high in both customer satisfaction, financial strength, and low rates in nearly every market across the country.
USAA is a diversified financial services company offering products only to veterans, active duty U.S. military members, and their families. They offer renter’s insurance starting at $10 per month.
USAA renter’s insurance policies cover just about everything. Among personal property, they offer theft protection that covers military equipment, fine art, items in storage, sporting equipment, cameras, coins, music equipment, guns, stamps, antiques, and furs.
And through a provision that’s unusual with renter’s insurance, USAA also offers natural disasters such as floods, windstorms, lightning damage, and earthquakes as a standard peril.
Learn More: Read our USAA Renters Insurance Review.
- Numerous Financial Options: USAA provides all types of financial services to military families including banking, investing, credit cards, auto loans, personal loans, and home mortgages.
- Numerous Insurance Options: On the insurance side, they provide life insurance, home insurance, small business insurance, and annuities. And their auto insurance policies are among the highest-rated available with consistently low premiums.
- Limited Coverage: Coverage is not available if you are not a current or former member of the U.S. military.
Policygenius is unique among the services on this list because it does not provide insurance directly.
Instead, Policygenius is an online insurance marketplace. Dozens and even hundreds of insurance companies participate on this platform. You can get quotes from several companies by completing a single questionnaire.
Once you’ve decided on renter’s insurance coverage that will work for you, you’ll complete a full application with the insurance company of your choice.
From there, the process will resemble a direct application to an individual company. But Policygenius helps you find the company, giving you a great way to find the lowest premium possible, not only for renters insurance, but you can also gather quotes on car insurance, life, home, disability, travel, pet insurance, and more!
Learn More: Read our full Policygenius Review.
- Multiple Quotes at Once: Policygenius enables you to get quotes from multiple companies who will compete for your business.
- Numerous Insurance Options: But this service also provides all types of insurance policies, including auto, life, and business insurance.
- Still Have To Do Your Research:
- Online insurance marketplaces may draw you toward companies that charge the lowest prices without regard to coverage or claims experience.
- Can Be Overwhelming: In addition, receiving multiple policy quotes can get confusing.
Amica took the top spot on the J.D. Power 2020 U.S. Property Claims Satisfaction Study Rating, scoring 902 out of a potential 1,000 points.
This means Amica’s own policyholders rate it best at paying claims. Since that’s the whole reason for having insurance, Amica should be one of your go-to choices for renter’s insurance.
Amica provides personal property, personal liability, and loss of use coverage as standard provisions. But they also offer personal property replacement (replacing items regardless of depreciation), smart devices and computers, identity fraud, and scheduled personal property for more expensive items.
Learn More: Read our Amica Renters Insurance Review.
- Customer Satisfaction: Not only is Amica the leader in customer satisfaction but it’s also one of the lowest cost providers in many markets across the country.
- Numerous Insurance Products: They also offer other types of insurance, especially auto insurance. The same situation with auto – Amica is one of the best for customer satisfaction with some of the lowest premiums. That naturally opens the door to discounts like multi-policy discounts such as auto and renters coverage or protection discounts like adding security systems and smoke detectors.
- None: None that we could identify!
Erie Insurance consistently ranks as one of the top insurance companies for customer service in its market areas. It’s also one of the lowest cost providers.
Erie provides all types of coverage, including auto, personal valuables, long-term care, business, life insurance, and Medicare supplements.
With renter’s insurance, Erie’s standard provisions provide liability, personal property, living expenses (providing a hotel stay while your home is being repaired), and even liability and personal property while you are away from home.
Learn More: Read our Erie Renters Insurance Review.
- Customer Satisfaction: Erie Insurance is also one of the top providers of auto insurance in the states where it operates. It has a strong combination of customer satisfaction and low premium rates.
- Bundling Discounts: Having numerous insurance options offers an excellent opportunity for a big bundling discount between auto and renter’s insurance.
- Limited Availability: The company only operates in the following states: District of Columbia, Pennsylvania, New York, North Carolina, Illinois, Indiana, Kentucky, Maryland, Ohio, Tennessee, Virginia, West Virginia, and Wisconsin. You may need to change carriers if you moved to a different part of the country.
As one of the largest and most respected insurance companies in America, Allstate can provide any type of coverage you need including, of course, renter’s insurance.
Allstate renter’s insurance policies include personal property, scheduled property, reimbursed living expenses, liability coverage, guest medical coverage, and identity restoration.
Allstate can also offer flood insurance and personal umbrella insurance which can provide additional liability coverage of several million dollars if you need it.
Learn More: Read our Allstate Renters Insurance Review.
- Full Range of Insurance Products: Allstate operates in all markets and provides its full range of insurance products.
- Discount Options: It may be possible to get all your insurance plans through Allstate which can provide a handsome bonus.
- Cost: Allstate is rarely among the least expensive providers in any market.
The Hanover Insurance Group
The Hanover isn’t one of the best-known insurance companies in the industry, but it is a full-service insurance provider
This company also sells other types of insurance coverage, especially auto insurance, which means you could bundle your auto and renter’s policies to save.
The Hanover’s basic level policies include personal belongings, liability, loss of use, and some less conventional provisions, like medical payments to others and building additions and alterations. The latter will kick in if you have installed cabinets, wood shelving, and other amenities in your rented dwelling.
Learn More: Read our Hanover Insurance Review.
- Comprehensive Plans: The Hanover offers more comprehensive plans that include specialized coverage. For example, their Select Plan not only covers personal property replacement and identity theft, but also lock replacements and refrigerated products. The Select Plus Plan covers breaking or misplacing personal items, water backup and sump overflow, and waiver of the deductible when the loss to your home exceeds 50 percent of the value of your contents.
- Cost: Not the lowest cost provider, no doubt due to the very comprehensive nature of their plans.
Known for having the best policy management of all insurance companies, State Farm sets itself apart from the other insurance companies listed by offering optional insurance coverage.
When using State Farm, you can customize your renter’s insurance policy to suit your needs.
They include liability coverage, including the rare earthquake coverage, and quick online quotes.
- Comprehensive Plans: State Farm comes with 5 out of 5 stars from JD Power Company’s Insurance study in all categories. They offer numerous options to customize your renter’s insurance policy.
- Cost: They aren’t quite as competitive with discounts like other companies we’ve studied.
Nationwide renters insurance is another stalwart company, offering extensive coverage of your valuables.
Want to get a quick renters insurance quote? Nationwide will not only give you a quick quote without surrendering your personal information, as in your social security number– they will also let you customize your policy AND file claims online, all with speed and ease.
- Extended Coverage Plans: Nationwide allows you to cover your valuables in your rental property such as clothes, jewelry, electronics, and furniture.
- Discounts: Nationwide offers numerous discounts, multi-policy, claims free, and safety discounts available.
- Cost: JD Power gave Nationwide a 3 out of 5 because of their customer service.
Why Do I Need Renter’s Insurance?
In most rental situations, your landlord will require you to have renter’s insurance and will even specify so in your lease agreement. In fact, some leases include language allowing a landlord to evict you if your policy lapses. Renter’s insurance reduces the likelihood you’ll bring a lawsuit against your landlord in the event of a hazard.
But even if your landlord doesn’t specifically require renter’s insurance, you should still get a policy. First, lawsuits against landlords have uncertain and often unsatisfactory outcomes. Second, a lawsuit won’t be a viable option if the cause of the hazard was directly related to you, such as a guest slipping on a wet floor in your home or your dog biting a neighbor.
Renter’s insurance policies are designed specifically to protect you and your possessions. Compared to most types of insurance, renter’s coverage is affordable and well worth the cost if you need to file a claim.
Speaking of cost…
How Much Does Renter’s Insurance Cost?
According to data provided by Policygenius, the average renter’s insurance policy costs $180 a year ($15 per month).
But there’s a wide range from one state to another. For example, the average annual premium in North Dakota is just $120; the average annual premium in Mississippi is $258.
But even based on the average renter’s insurance premium in your state, exactly how much you will pay will depend on several factors:
- Personal property value: insuring $50,000 of the property will cause a higher premium than $25,000.
- Personal liability amount: a $50,000 limit will cost less than a policy with $300,000.
- Policy riders: these may provide extra protections such as covering a home business or high-value items.
- Availability of discounts: most insurance companies offer discounts, but some offer more than others. The most common is the auto and renter’s insurance bundle.
- Replacement cost or actual cash value: this is a poorly understood insurance provision, but it matters with personal property. Replacement costs will cover the full replacement of items lost or destroyed. The actual cash value will cover only the depreciated value of an item. For example, an item purchased five years ago for $1,000 may have an actual cash value of $200. Replacement cost will be more expensive, but it will be your best friend in a disaster.
- Your personal claims experience: if you’ve ever filed a claim against a renters insurance policy, it’s likely you’ll be charged a higher premium than someone who hasn’t.
The best way to find the best coverage at the lowest premium – considering all the factors above – is to shop between several companies. Not all insurance companies charge the same amount for different provisions or even look at your claim experience in quite the same way.
How Much Coverage Do I Need?
As just discussed, the amount of coverage in your renter’s policy will affect your premium costs. But this is not an area to cut corners. Buying a minimum value policy to reduce premiums can leave you in a deep financial hole if a hazard occurs.
Your coverage amount should match the value of items you have and the potential incidence of personal liability.
There are three major areas to consider with the amount of your coverage:
Most renter’s policies offer flat dollar amounts of coverage for personal property. These levels may start as low as $10,000 and go as high as $100,000 or more. A flat dollar coverage amount may either be inadequate or excessive based on the actual value of your personal belongings.
Do at least a rough assessment of your personal property. You can use a flat amount, such as $10,000 per room. But if you have some more valuable items, you may want to get them appraised or at least have your original purchase receipt available. This may identify the need for higher overall coverage, or even scheduling the item for special coverage.
If someone is injured in your home, personal liability will be available to cover out-of-pocket costs like medical expenses, as well as liability for damages in a lawsuit. Given the wide potential for liability, it’s best to go with the highest coverage amount you can afford.
You’ll also need to evaluate your personal situation and the risk of liability. For example, if you’re a single person with no pets, minimum liability coverage may be enough. But if you have children and pets, the risk of a liability situation is dramatically higher.
Your children could have friends over who gets injured, or your dog could bite a neighbor’s child – these sorts of possibilities will raise both the likelihood and the dollar amount of potential claims.
Another very important consideration with personal liability coverage is your net worth. If you have a few thousand dollars in savings and no other significant assets, minimum liability coverage may be sufficient.
But if you have several hundred thousand dollars in savings and investments, you’ll want to have at least enough coverage to match the total value of those accounts. If you don’t, a judge could seize your personal assets to provide punitive or actual damages in a lawsuit.
In either case, understand that a victim can pursue your personal assets in excess of your personal liability coverage. Buying enough liability coverage reduces this possibility.
Add-ons customize your coverage to include higher value possessions or special situations. High-value possessions could apply when you have a piece of jewelry worth $15,000, and your standard policy will cover only $2,000 per item. You’ll need to schedule that item, at an additional premium, to get it covered.
Special situations might include running a daycare in your home, or some other type of home-based business. Some policies may include these activities as part of your standard coverage. But most will require some type of additional coverage that will increase your premium.
What Does Renter’s Insurance Cover?
A typical renters insurance policy covers the following list of perils.
But you can expect to see the following included in most:
- Personal liability protection for injuries caused by your pets, medical costs incurred by anyone injured in your home, and lawsuits from either event.
- Damage from fires, storms, or vandalism.
- Theft of personal property and identity theft.
- Reimbursement for additional living expenses incurred while your property is being repaired.
- Water damage caused by burst pipes, malfunctioning water heaters, and other internal sources.
- Some policies will provide for items in remote storage, but only if specified in the policy.
What Does Renter’s Insurance NOT Cover?
Knowing what a renter’s policy doesn’t cover is just as important as knowing what it does cover. As a general rule, any hazard that’s not specifically included in your policy won’t be covered.
Common examples include:
- Losses incurred as a result of gross negligence on your part.
- Damage caused by illegal behavior. If you torch your apartment because you’re running a meth lab, you’ll be on your own.
- Damage to the property caused by you or your pet(s).
- Loss or destruction of items that exceed the dollar value of coverage provided for in the policy.
- Damage from earthquakes and floods. Many companies offer special policies for these hazards.
- Property owned by someone living in your home who is not listed as part of your policy.
- Damage caused by war or acts of terrorism.
- Damage caused by pest infestations. These more typically affect the building itself which will be the responsibility of your landlord. But if there is any damage to your personal effects, it won’t be covered by a standard policy.
What’s The Best Renters Insurance For You?
As you can see, renter’s insurance policies are more complicated than they seem at first glance. It can be something of a matrix to make sure you get the right coverage at the lowest cost.
Work with one of the companies on this list, and you’re very likely to come up with a policy that will achieve both goals.