Over a third of U.S. households are occupied by renters. For this segment of the population, renters insurance could be an important purchase. The average cost of a renters insurance policy is $179 per year according to the Insurance Information Institute (Triple-I). Bankrate reviewed the largest renters insurance companies by market share and evaluated coverage options, discounts, policy features and third-party ratings to help you find the best renters insurance company for your needs.
Why renters insurance is important
Renters insurance is relatively inexpensive at around $15 per month, but its value can significantly outweigh its monthly cost in the event of a claim.
In addition to replacing your personal belongings, renters insurance also offers coverage for incidents that affect your guests. Perhaps a guest slips at your residence, sustaining an injury. In this case, renters insurance could help pay for their medical costs. If the injury results in legal action, renters insurance could also help pay legal fees. Insurers commonly offer coverage for relocation and food if your rental becomes temporarily uninhabitable due to a covered claim.
Add-ons are generally available for your renters insurance policy as well to help provide more robust coverage. For example, if you need extra coverage for your jewelry or other high-value items, you may be able to add additional coverage on top of your standard renters coverage.
The best renters insurance companies overview
Bankrate has researched more than a hundred companies offering renters insurance policies to narrow down some of the best renters insurance companies of 2021. The following companies have all been selected based on positive customer satisfaction ratings by J.D. Power, a leading third-party source for industry research, and have received âExcellentâ or âSuperiorâ credit ratings from AM Best. Additionally, the companies below either include additional protections or offer them as add-ons for your renters policy, such as pet insurance and flood coverage.
*Not officially ranked by J.D. Power due to eligibility restrictions
Allstate is a widely recognized name in the insurance industry, which could provide you with peace of mind. Additionally, the company offers add-ons for increased limits for items such as business property and additional policies, such as a personal umbrella policy, are available to renters. Allstate also offers a few discounts that could have a significant impact on your monthly premium.
However, Allstate received a slightly below-average rank from J.D. Power. While the score is not significantly lower than the industry average, customers seeking exceptional customer service may want to consider another carrier.
Learn more: Allstate Insurance review
American Family offers a few unusual endorsement options on its renters insurance policies. You can add several optional coverages, including identity theft coverage, travel protection and home-based business coverage, on top of the three traditional coverages: personal property, personal liability and loss of use.
American Family may fall a bit short when it comes to financial stability. Although an A rating from AM Best is still relatively high, other companies on our list scored in the A+ or A++ range. If you are looking for a company with strong financial backing, there could be other options that better fit your needs.
Learn more: American Family Insurance review
Erie Insurance has a stellar reputation built upon several factors: affordable rates, excellent customer satisfaction and an easy-to-navigate claims service. Erie offers considerable discounts on bundles, additional living expenses if you need to find a temporary place to live and the option for extra coverage for things like identity recovery and your more expensive personal items.
Unfortunately, Erie only offers renters insurance in roughly a fifth of the U.S., but could be an excellent choice if you live in one of the areas it services. States covered are Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin. Erie also offers coverage in Washington, D.C.
Learn more: Erie Insurance review
Liberty Mutual could be a great choice for renters on a strict budget. The company advertises that its policies start at just $5 per month. Although the coverage options available are fairly basic, you might be able to add replacement cost coverage for your belongings, as well as jewelry coverage or earthquake coverage.
However, Liberty Mutual does have a higher-than-average complaint index score with the National Association of Insurance Commissioners (NAIC). A score of 1.00 represents a baseline number of complaints. Liberty Mutualâs overall score is 2.20, indicating that the NAIC receives over twice as many complaints than average.
Learn more: Liberty Mutual Insurance review
Renters tend to like MetLife (now a part of the Farmers Insurance Group) because it offers excellent customer service that can help you tailor your renters policy to your needs, including the option to insure expensive luxury items. Somewhat rare in the industry, MetLifeâs renters insurance policies automatically come with identity protection in many states.
The recent acquisition by Farmers could mean that changes will come to MetLifeâs renters insurance policies. If you value having a sure sense of how your policy will work, you might prefer to wait until the mergeâs impact is complete to get a quote from MetLife.
Learn more: MetLife Insurance review
State Farm offers renters insurance in every state throughout the U.S., making it a great option for renters in rural areas or areas that other companies underserve. But itâs not just State Farmâs wide availability that may make it a good option. The company also has exceptional ratings from companies like J.D. Power and AM Best, which could make it a safe bet for your renters policy.
However, State Farm doesnât offer nearly as many discounts as some of the other providers weâve chosen. You might lower your premium if you insure your car with State Farm, too, or if you have security devices installed in your apartment. While not an actual discount, you could increase your deductible to lower your premium, which would mean you have to pay more out of pocket if you file a claim.
Learn more: State Farm Insurance review
Even without owning the property, many renters like to make their spaces feel like home with home improvements. In addition to standard renters protections for your items and liability, Travelers offers an option to apply up to 10% of your personal property coverage to improvements and alterations, whether they are made by choice or because of a covered loss.
Unfortunately, Travelers did receive one of the lowest customer satisfaction scores from J.D. Power. Scores were calculated by using five key areas of focus: customer interaction, coverage options and discounts, average premiums, billing procedures and claims service. A low score could indicate that customers are generally dissatisfied with Travelers in one or more of these areas.
Learn more: Travelers Insurance review
USAA has a stellar reputation among consumers and the insurance industry, and it offers renters insurance policies particularly supportive for those in a military lifestyle. The basic policy includes coverage for personal property, personal liability, medical payments and additional living expenses. Flood coverage is also included in standard USAA renters insurance policies, which is notable considering that flood insurance typically has to be purchased separately.
However, USAA is not available for everyone, which could be considered a major drawback of the company. Only military members, veterans and immediate family members are eligible for coverage. Unless you fit one of these categories, you will not be able to purchase a USAA policy.
Learn more: USAA Insurance review
How to compare renters insurance companies
With so many renters insurance companies on the market, how do you choose which provider is right for your needs? Finding the best renters insurance policy will depend largely on your particular living situation and coverage preferences. The first step to finding a provider who can best cover your unique circumstances is to take some time to consider what you may want from a company.
For example, if you run a business or keep business-related items in your home, you may find that an add-on for extended coverage or business personal property is necessary. This may cause you to look for a provider which specializes in renters insurance for business personal property.
Additionally, it may be helpful to review third-party reviews from companies like J.D. Power and AM Best. J.D. Power runs numerous studies each year, including evaluating renters insurance companies. Scores are out of 1,000 points and evaluate customer satisfaction based on a number of factors. AM Best rates the financial strength of companies. This can be a good indicator of insurance companiesâ ability to pay claims, especially if a company is inundated with numerous claims at once.
Once you have identified a handful of companies that could meet your needs, you can start requesting quotes. This can often be done online or by phone, or you could contact a local agency. Getting quotes from several different insurance carriers allows you to compare premiums, coverage options, discounts and policy features.
Additional considerations before choosing a renters insurance policy
Like any insurance policy, renters insurance is not one size fits all. No two rental circumstances are the same, and neither will the insurance for them be. When choosing a renters insurance company and personalizing your policy, you may want to consider:
- The value of your belongings. To help ensure you do not over- or under-insure your belongings, you could create a home inventory. This exercise could help you estimate the total value of your belongings so that you choose an appropriate personal property coverage amount.
- If you have any high-value items. Possessions like fine jewelry, collectibles, fine art, guns or antiques often have set coverage limits included within a policy. For example, without alterations to a policy, you might only have $1,000 in coverage for jewelry, regardless of how much personal property you buy. Scheduling your high-value possessions can provide more accurate and broader coverage.
- If you have a pet. You might not consider your pet when you buy renters insurance, but you should. While many pets are covered for liability, some dog breeds and exotic animals are often excluded. If you have one of these animals, you probably want to look for a company that will extend liability insurance to it. That way, if your pet injures someone, your insurance can step in to help pay for the bills.
- What company insures your vehicle: Many car insurance companies also offer renters insurance. When you bundle your policies together, you could see significant savings. Plus, thereâs the added convenience of having all your insurance policies in one place.
If you arenât sure where to start in your search for renters insurance, sitting down with a licensed insurance agent can be helpful. An agent can listen to your needs, circumstances and concerns and could help recommend companies, coverages and policy features that fit your situation.
What does renters insurance cover?
Renters insurance typically covers damage to your personal items, additional living expenses and situations where a guest is injured. These things are generally not covered by your landlordâs insurance policy. Similar to homeowners insurance policies, covered perils generally include fire, theft, falling objects, items stored outside of your rental and medical coverage for guests.
- Personal property: Coverage for your personal property is not included in your landlordâs insurance for rentals. Purchasing renters insurance allows you to protect items like your laptop, clothing and furniture. Even if your personal property is stored away from your rental, coverage generally extends up to a certain limit to anywhere your personal property is kept.
- Living expenses: If your rental becomes uninhabitable due to a covered loss like a fire, renters insurance helps cover the resulting costs from having to stay outside your home while it is being repaired. This could include fees for hotels, food and other necessary costs.
- Medical payments and liability: If a guest gets injured within your rental property, guest medical protection is available to help pay for potential medical bills resulting from the accident, regardless of fault. If fault is placed and a guest issues a lawsuit for the injury, liability protection also serves to help with legal fees, medical expenses, payments for pain and suffering and lost wages.
Depending on the common risks where you live, you may want to consider add-ons and additional coverage options where available. You may choose to add earthquake coverage if you live in a state more prone to those damages, for example. Other factors to consider when choosing a policy are the replacement cost of your most valuable items.
Frequently asked questions
What is a reasonable price for renters insurance?
Renters insurance is remarkably affordable when compared to other types of insurance. Prices will vary based on where you live, how much personal property coverage you buy and the deductible you choose for your policy. Per the Triple-I, the average cost of renters insurance is about $179 a year, or $15 per month.
Should I select the cheapest renters insurance available?
Choosing the cheapest renters insurance without looking into what is covered could mean being left paying out of pocket should a claim occur. Shopping around and comparing renters insurance could help you find the most affordable price with the right coverage for you. You should always make sure you understand everything covered in your policy by reviewing your policyâs documents and speaking to a licensed agent.
Does renters insurance cover my roommate?
Some insurance carriers may allow roommates to share a renters insurance policy. However, in general, each resident needs their own policy because roommates do not have an insurable interest in each otherâs belongings. The exception to this would be spouses or other family members who reside under the same roof.
Do I have to buy renters insurance?
Renters insurance is not legally required in any state or in D.C. However, landlords frequently require tenants to carry renters insurance policies and often mandate a minimum level of liability coverage. In addition to the landlordâs policy, the liability coverage on a tenantâs policy provides a layer of financial protection if someone is injured on the rented property. Landlords donât typically mandate any level of personal property coverage, but most companies have a lower limit (often $10,000 or $25,000). Even if your landlord does not require a policy, renters insurance can be a fairly inexpensive way to protect your finances.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female renters with a clean claim history, good credit and the following coverage limits:
- Coverage C, Personal Property: $25,000
- Coverage D, Loss of Use: $5,000
- Coverage E, Liability: $100,000
- Coverage F, Medical Payments: $1,000
The renters also have a $500 deductible.
These are sample rates and should be used for comparative purposes only. Your quotes will differ.