Best Renters Insurance

To keep living costs low, many people choose to rent their homes, rather than buy. To protect your personal belongings, purchasing a renters insurance policy is important. However, choosing the right insurance on your own can be overwhelming. There are dozens of providers on the market, and it can be difficult to navigate the marketplace if you don’t know what you’re looking for. Fortunately, we’ve crafted the definitive one-stop guide to finding the best renters insurance on the market. Keep reading to see which companies ranked the highest.

Our Top Picks for Renters Insurance Are the Following:

• American Family – #1 choice for renters insurance.
• State Farm – Best for most people.
• USAA – Best overall if you qualify.
• Allstate – Best for online resources and digital experience.
• Nationwide – Best for Discounts.
• Lemonade – Best for affordable coverage.

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American Family – #1 Choice for renters insurance

After poring over mounds of reviews, customer ratings, and speaking with an insurance agent of over 15 years, we found American Family to be the clear #1 choice for the best renters insurance, according to J.D. Power’s 2019 U.S. Home Insurance Study of Renters Insurance. American Family is a good choice for people who care about the overall insurance experience, including customer service and claims handling, rather than price alone. Speaking of price, we got a sample quote for a 26-year old single female, living in Rhode Island, which came to $24 per month. However, American Family claims that most of their policies cost around $15 a month. American Family’s affordability, paired with its unrivaled customer-service interaction, policy offerings, price, billing processes, and policy information, set it apart from the crowd. In our research, much like with home insurance, we found that local and regional options like state Farm Bureaus can often be the best fit because these companies offer unique insight into the region they cover. However, for this article, we chose to focus solely on national companies, available to the majority of Americans. Although American Family ultimately shined the brightest, many outstanding companies were in the running.

State Farm – Best for most people

Although rates are largely dependent on geographic location, State Farm tends to offer better-than-average premium rates in the United States.  Based on our sample quote, an average policy from State Farm costs around $22 per month. With a huge share of the market, rock-solid financial standing and low premiums, State Farm is a good option for anyone looking to insure their home at a great price. The only area they seem to fail a bit is customer satisfaction with the claim process. Other than that, they are right up there with American Family.

USAA – Best overall if you quality

USAA is often considered the gold standard for insurance companies. The company boasts excellent add-on coverage, including identity-theft protection and flood protection, something that’s next to impossible to find elsewhere. To take advantage, you must be enlisted or have served in the United States military, but if you qualify, it’s hard to find a better option on the national market. USAA ranks high in all areas of coverage, including the claim process. If you qualify, contact a USAA representative to get a price quote.

Allstate – Best for online resources & digital experience

Allstate comes out on top when searching for the best renters insurance online. For the most part, the premiums are at or below average, but if you live in a high-risk area (for theft, arson, flooding, etc.), the policies can be far more expensive than other companies. For a single renter living in Rhode Island, our sample quote came out to $19 per month. Coverage, pricing, and customer service all rank high, as does the convenience of online resources. The one place Allstate’s coverage falls short is on electronics, which reimburses $1,000 per item. That means that a $5,000 computer and printer won’t be covered for more than $1,000 if stolen. Even so, you can talk to an agent about additional coverage. You might be surprised to learn that Allstate is a great insurance provider for people who are retired. The company offers a 25% discount on policies for people who are over 55 and not actively looking for employment.

Nationwide – Best for discounts

Nationwide came in below American Family in most areas of coverage. However, Nationwide’s renters policies are top-tier when covering the contents of your home or apartment. They even provide coverage for loss of use — or the out-of-pocket expenses you’ll encounter if you need to find another place to live. Nationwide has coverage for medical payments to others, personal liability, credit card coverage for unauthorized usage, and building additions and alterations. It’s website also does a nice job stating what you need to know about renters insurance. It didn’t outdo Allstate or American Family in those areas but might give you the cheapest quote thanks to its many discounts. Our sample quote came to just $18 per month, which makes Nationwide the least expensive provider on our list. That’s why we recommend Nationwide for renters who prioritize price over extensive policy options. 

Lemonade – Best for affordable coverage

Lemonade is a little-known insurance provider that operates entirely online. It offers affordable prices, and because it’s entirely digital, you can get coverage starting on the same day you get a quote. If you have to file a claim, you’ll get paid almost instantly, which means no more waiting around for reimbursements. Currently, Lemonade renters insurance is available in 24 states, and it’s continuing to expand. To find out if Lemonade offers coverage in your state, you can get a quote online. We enjoyed the short quiz that asked us about roommates, valuables, and other factors that impact the price of a policy. Our sample quote came to about $19 per month, which is just $1 more expensive than Nationwide, the cheapest provider on our list. However, the experience of getting an online quote with Lemonade was much more enjoyable. We recommend Lemonade to student renters or people living with roommates.

American Family – A full review

 Whether you’re buying your dream house or renting your first apartment, there’s no place like home — and we believe that’s worth protecting. In our research, we unequivocally found that American Family offers a fairly standard renter’s policy. But its optional coverages and discounts are worth noting and quite comprehensive, fully customizable, and backed by a solid company. Overall, according to Consumers Advocate, on a scale of 1 to 5, American Family renter’s insurance ranked:

•     4.0/5 – Coverage Options
•     4.3/5 – Add-Ons & Discounts
•     3.5/5 – Customer Service
•     4.3/5 – Financial Strength

Coverage

American Family offers all of the standard coverage options you’d expect for a top-ranked company, including liability, loss of use, and property damage. It also has a wide selection of policy options and add-on coverages, which include travel insurance, identity theft protection, home based-businesses insurance, and pet insurance.

Add-ons and discounts

American Family Insurance offers a wide range of discounts for customers who opt to bundle their renters insurance with other policies. You’ll also receive a discount if you have been claim-free for at least five years, and started using smart technology, like devices that monitor air quality, fire, temperature, humidity or intruders. You can even qualify for additional discounts if you opt for a preferred method of payment, if you become a loyal customer or if you have a parent that is also a member of American Family Insurance.

Customer services

American Family received a perfect 5-star rating for customer service in J.D. Power’s 2019 Renters Insurance Study. However, data collected by the NAIC reveals that American Family received less than the national median ratio of complaints regarding its renters/homeowners insurance products in 2017. However, American Family only holds an A rating with the Better Business Bureau. This is based on 42, mostly negative, customer reviews. Still, when compared to most other renters insurance companies, American Family ranks well within the top.

Financial strength

Although American Family does not have a financial strength rating with Moody’s Investor Services or S&P global, the company holds an A (Excellent) rating for stable long-term issuer credit outlook and financial strength with the insurance-centered credit rating agency AM Best. American Family also has over 8.3 million active members, making it financially stable with a proven ability to fulfill future policyholder obligations. One customer we spoke with said, “The customer service is great. I even spoke to a real human. My claim was handled fairly and quickly. I really couldn’t have asked for more.”As with any kind of insurance, we would recommend consulting with a personal agent to make sure you’re getting the biggest bang for your buck. In general, talking with an agent about your insurance policy can help you avoid financial pitfalls and find one to fit your individual needs.

Who should skip

American Family does not have coverage in every city or state in the nation. Although its website is comprehensive and easy to navigate, it cannot give you a complete quote because of the many factors that determine each renters rate, discounts, and qualifications. Therefore, it’s better to consider this insurance company when you have the time to sit down and speak with a local agent. Nonetheless, its comprehensive coverage at competitive prices makes American Family our #1 pick. What made American Family stand out:

•     Customer satisfaction
•     Competitive rates across the board
•     Consistently fair payouts of claims
•     Discounts and bundling opportunities
•      A top-of-the-line company with strong financial backing

How we chose the best renters insurance

We spent more than 50 hours breaking down dozens of reviews and independent ratings to get a grasp on the companies that had the most to offer. We spoke with customers of various firms to get a sense of how large enterprises treat their customers when it comes time to file a claim. Finally, we sat down with an experienced agent to gain insight on the intricacies of purchasing renters insurance, and what to look for in a policy. Overall, we learned that renters insurance is extremely individualized. Insurance, in effect, is purchasing the peace of mind that your belongings will be protected should tragedy strike. An important note for any renter to know: Your landlord’s homeowners insurance policy will typically only cover the actual building you live in. This essentially means that everything inside those walls is your responsibility to protect, which is why choosing the best insurer is a must.

Understanding coverage

Feeling exhausted from all of the insurance talk? No need to worry. Choosing the right renters insurance starts with simply understanding the different types of coverage. With renters insurance, it’s critical to remember that your landlord, no matter how compassionate, will not cover any damage to your personal property that occurs for any reason. For everything in the home, you must take it upon yourself to find a renters insurance policy that covers those bases. Here’s a quick look at the essential types of coverage your renters insurance policy should include.

Personal property coverage

This helps you replace day-to-day items, such as furniture or clothes, that are damaged or lost in any covered perils. Typically, there is some form of monetary limit for what your insurer will cover. For expensive, easily movable items (e.g. your limited-edition Rolex or 1970 Gibson Les Paul), an additional floater insurance policy may be a smart item to add. This assures that the full value for your items will be returned should catastrophe strike.

Liability coverage

In the event that someone is injured to the point of needing medical attention in your home, and you are found liable, this coverage can save you from breaking the bank. It will help pay the medical costs of the injured party and even help cover legal fees should that person take you to court. Liability coverage can even protect you and your family from financial liability if you cause damage to another person’s property. This coverage is typically worth the front-end investment.

Medical payments to others

This helps pay for medical expenses for others injured in your home, regardless of whether you are legally liable. This coverage isn’t always included in renters insurance policies and covers only houseguests, not anyone living at the residence.

Additional living expense

What happens if the damage done to your home forces you to find a new place to live? With this coverage, your temporary living expenses are covered, ranging from hotel rooms to restaurant bills you wouldn’t normally have. Without this coverage, you might be moving back into Mom and Dad’s spare room.

The rise of uninsured renters

 While most homeowners would never think of skipping out on purchasing an insurance policy, studies show that renters aren’t following suit. Only 37% of renters purchased an insurance policy. This is especially surprising considering how affordable renters insurance coverage can be. According to the Insurance Information Institute, the average price of renters insurance is actually dropping. Between 2017 and 2016, the average cost fell by 2.7 percent, which was down 1.6 percent from the year before. As of 2017, the average cost of renters insurance is $180 per year. That’s drastically cheaper than even the most affordable home insurance policy, yet a huge percentage of renters still go uninsured. The biggest reason is ignorance of the necessity of renters insurance. Many new renters wrongly believe their landlord’s policy covers their belongings in the house. Others think that they are in a low-risk area for any perils. The biggest lie renters tell themselves is that they don’t own anything worth insuring. While no one will force you to safeguard your belongings, every savvy renter should at least look into a policy. It’s much cheaper to insure it on the front end than to lose it all on the back end. When we asked Pippin for his best piece of advice to someone deciding whether or not to purchase renters insurance, he said: “I would recommend they check it out for themselves. [People] would be surprised at how affordable coverage can be.”What makes a great renters insurance company:

•     A+ customer service
•     Fair claims payment
•     Reasonable premiums
•     Unique discount offers

Renters insurance coverage for you

As with homeowners insurance, renters insurance is extremely individualized. Depending on your location, home type, expendable income, and a plethora of other variables, your insurance policy will likely not look exactly like that of your neighbor. This is why we want to equip you with the basics.

The perils

In all types of insurance, causes of loss are known as perils. For example, if your favorite suit is consumed by a raging fire, the fire is the peril. Typically with renters insurance, your insurer will list the perils covered by your policy, the most basic of which are highlighted below:

•     Vandalism
•     Theft
•     Fire
•     Lightning
•     Water damage (not flooding)
•     Smoke damage
•     Falling objects
•     Wind

We interviewed G.K. Pippin, a North Carolina Farm Bureau insurance agent of over 15 years, and asked him what renters tend to overlook. He said: “The liability exposure as a tenant to the landlord and possibly their neighbors is in a multiple unit housing. For example, say you’re cooking in your kitchen and you walk away for a second, and you come back to a fire. Without renters coverage, you are responsible for that fire and all the damage it causes.”

Two types of value

Here’s a quick rundown of two methods for discerning value in the event of a claim. 

Actual cost value (ACV)

This pays for items lost in any covered peril, minus the depreciation. Essentially, you’ll get paid the estimated current value of the item, and not what you spent on it. In other words, don’t expect too much for that Beanie Babies collection. Actual Cost Value typically results in a lower premium but can be a bit frustrating (and laborious) when filing a claim. 

Replacement cost value (RCV)

This pays for your belongings at the price it would cost to buy the same item new today. For the renter who has spent years building a one-of-a-kind collection, or who simply has a lot of money invested in their belongings, RCV will give you a much better payout if the time comes to file a claim. The downside of RCV is that your monthly premiums will undoubtedly go up to compensate. But insurance is all about weighing the risks. Those who don’t want to chance financial ruin in an accident will likely lean toward RCV. When asked what he recommends to his clients, Pippin said: “I always recommend replacement cost. With the ever-increasing cost of goods, it gives much more benefit to the client.”

Final thoughts

Whether you’re renting a house or hopping from apartment to apartment to find the perfect fit, your home is your sanctuary. It’s where you live and thrive, and we love helping you make it the best it can be. While there’s no one-size-fits-all choice for insurance, we (along with many other reviews and reputable companies) believe that American Family is the best renters insurance choice to shield your home and your wallet. Given how regionalized and individualized renters insurance is, we encourage you to speak with local agents and educate yourself on the specific insurance needs of a home in your area.

Did you know?

Your vehicle’s location has a big impact your car insurance premiums. Even if you’re moving in the same city, you might see a change in your rate. That’s why moving is such a good time to compare car insurance quotes — from at least three providers if you can. Switching car insurance providers can often save you hundreds of dollars a year in some cases.

Frequently asked questions

Is renters insurance necessary?

Renters insurance isn’t legally required, although your landlord might request that you purchase insurance before moving in. Getting renters insurance is a smart investment. Without it, you’ll have to pay out-of-pocket to repair or replace your items if they get damaged or stolen. It’s a small price to pay for big savings in the long run. 

How much does renters insurance cost?

Data from the Insurance Information Institute determined that the average renters insurance policy costs $180 per year, which breaks down to just $15 per month. However, the actual amount you’ll pay depends on a number of factors, including your state, your age, your credit score, your deductible and more.

How can I save money on renters insurance?

Most insurance providers offer discounts to help you save money on your policy. You can expect to save money by bundling your policies, paying your policy in full, improving your credit score, raising your deductible and having a fire and anti-theft system in your home.

Sources

Interview: G.K. Pippin, North Carolina Farm Bureau insurance agentJ.D. Powers U.S. Home Insurance Study – Renters Insurance (2019): https://www.jdpower.com/business/ratings/study/U.S.-Home-Insurance-Study—Renters-Insurance/10184ENGConsumer Advocate:https://www.consumersadvocate.org/renters-insurance/c/american-family-renters-insurance-reviewAmerican Family Insurance: https://www.amfam.com/insurance/renters/renters-overviewDorothy Wilson, American Family customer“Types of Damage and Loss Usually Covered by Renters Insurance,” Homesite, January 2017“How to Choose the Best Renters Insurance,” Lifehacker, February 2018Average cost of renters Insurance https://homeguides.sfgate.com/averagcost-renters-insurance-8445.html“Learn Renters Insurance 101,” Trusted Choice