Cheapest Renters Insurance | 2021 Insurance Guide

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If you’re looking for affordable renters insurance, you’re in the right place. This guide will give you an overview of the five most affordable companies in our rating of the Best Renters Insurance Companies of 2021 along with tips for saving money on renters insurance. Keep in mind, the rates listed below are for illustrative purposes only. You should contact an insurance company or insurance agent directly for applicable quotes.

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The Most Affordable Renters Insurance Companies of 2021

Prices appearing on this webpage are sample rates for illustrative purposes only based on a particular consumer profile. For specific pricing, you should go either to a certified broker or directly to the insurer’s website.

Nationwide  »

Nationwide
AM best rating
A+
Online Tools
Online Estimate
Multi Policy Discount Available

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Nationwide

As one of the largest insurance companies, Nationwide is a great fit for those who prefer working with independent agents to walk them through purchasing a renters insurance policy. The standard coverage includes the usual features plus credit card fraud coverage (up to a limit for fraudulent credit or debit card transactions and forged checks) and protection if you make alterations or improvements to your rented space.

If you need additional protection, Nationwide offers optional coverages such as loss or damage of high-ticket items, earthquake damage, and more. Discount opportunities are also available for applicants who have more than one Nationwide policy, are claims-free for a certain amount of time, or have protective devices such as smoke and fire detectors on the premises. Filing claims is a straightforward process that policyholders can do through their online account or by calling customer service, which is available 24/7.

Lemonade  »

Lemonade
AM best rating
N/A
Online Tools
Online Application
Multi Policy Discount Available

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Lemonade

Lemonade stands out for a few reasons, one being that it offers a fast sign-up and claims process due to its use of AI technology. Depending on the nature of your renters insurance claim, Lemonade says it can approve your claim within seconds. Plus, Lemonade donates unclaimed premiums to nonprofits, and customers have a choice as to which charities.

This insurer’s basic policy includes loss of use coverage (when your home isn’t livable), personal property coverage (replaces lost or damaged items), and personal liability coverage (if you or someone else is injured on your rented property). Policyholders can opt for extra coverage for high-value items such as jewelry or electronics, and you may be able to make claims without paying a deductible.

State Farm  »

State Farm
AM best rating
A++
Online Tools
Online Estimate/Online Application
Multi Policy Discount Available

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

State Farm

Available nationwide, State Farm lets applicants request a quote online or by contacting a local agent. Like other competitors, a standard policy protects policyholders against theft or damage to personal property (up to a predetermined limit), loss of use from a covered event, and coverage if someone else was injured around your property. State Farm offers pet insurance through Trupanion for an additional cost. Other options include protection against earthquake damage, additional liability, and identity theft.

State Farm offers the usual discounts, such as if you have more than one policy with the company or if you have home safety devices such as a fire alarm or home monitoring system. The policy comes with inflation coverage so that you’ll be protected at the same levels as the cost of living goes up.

Erie Insurance  »

Erie Insurance
AM best rating
A+
Online Tools
Agent only
Multi Policy Discount Available

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Erie Insurance

Founded in 1925, Erie Insurance isn’t available nationwide – it’s only available in 12 states and Washington D.C. Qualifying applicants have access to competitive rates and more than 13,000 local agents. Plus, on top of its competitive prices, applicants can receive discounts by bundling their auto and renters policies together.

Once you’re a policyholder, you can check the status of your claims online 24/7 after logging in to your account. The standard policy includes coverage for injury to other people (or damage to their property), additional living expenses if your home becomes uninhabitable, and personal belongings from a covered loss around the world. Policyholders can also choose to purchase optional coverage such as ones for earthquakes, high-ticket items, and identity theft.

Farmers  »

Farmers
AM best rating
A
Online Tools
Online Estimate
Multi Policy Discount Available

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Farmers Insurance

Farmers Insurance is available in 39 states and most applicants can receive a quote online. Basic coverage from Farmers includes reimbursement for lost, damaged, or stolen items (up to a certain limit), reimbursement for additional living expenses if you’re displaced, liability coverage, and guest medical coverage. Additional coverage options include personal property replacement cost, identity theft coverage, and even pet insurance.

A Farmers Insurance agent can help find discounts for your policy. Discounts are available for households that have been cigarette smoke-free for the past two years, have qualifying home protection systems, or are bundling policies. Reporting claims is easy as there are multiple ways to do so. Policyholders can file a claim online, by calling a Farmers representative, or via Farmers’ mobile app.

The sample monthly costs of the renters insurance companies we rated range from $13.43 for Nationwide to $24.29 for American Family. However, there are many variables within those sample monthly costs, and it’s unlikely that your renters insurance quotes will match these exactly. If you’re wondering how much renters insurance is for you and your household, here are some factors to take into account.

Most policies include some standard rental insurance coverages. When you’re getting quotes for renters insurance, you can increase your limits or add additional coverage for your personal property, personal liability, and extra expenses you may incur if you have to temporarily relocate due to a disaster. Common options include:

  • Higher policy limits for household possessions
  • Supplemental coverage for specific valuable possessions (which generally won’t be optional if you want those items covered)
  • Coverage for specific disasters such as floods or earthquakes
  • Coverage for small business inventories or assets stored at the rental property
  • Additional liability coverage
  • Higher limits for additional living expenses.

These policy add-ons increase your premiums, but the increase may be somewhat offset if you qualify for a discount by buying more than one type of insurance policy with the same company, often known as a multipolicy discount.

The next factor affecting a renters insurance quote is the deductible, or the amount you pay out of pocket before receiving compensation for your losses. As explained by State Farm, a lower deductible means higher premiums but also higher compensation when you file a claim. A higher deductible lowers your premiums, but it means you’ll pay more out of pocket before receiving compensation for your claim.

Finally, your location is a factor in your renters insurance costs, as illustrated by a January 2021 study by the National Associate of Insurance Commissioners that showed data for average renters insurance costs through 2018. In some states, an average renters insurance policy costs more than in other states due to state regulations and other factors. The study shows that in 2018, renters in Mississippi faced the highest average renters insurance premiums at $252 annually, and renters in North Dakota enjoyed the lowest average renters insurance premiums, at an annual average of $126.

When determining how much renters insurance you need, keep in mind that there are three main types of coverage: personal belongings, personal liability, and additional living expenses. You’ll likely be able to adjust your policy limits for all three types.

Figuring out the value of your personal belongings is particularly important for buying the right amount of renters insurance. The Insurance Information Institute recommends taking an inventory of your personal property. To create your inventory:

  • Write a detailed list of all your possessions, including clothing, furniture, appliances, bedding and towels, electronics, and sports and hobby equipment.
  • Add information on acquisition dates and price.
  • Make a separate list of particularly valuable items, such as jewelry, artwork, and collectibles.

Valuables will generally require extra coverage and documentation, such as receipts or appraisals, based on your policy requirements.

Ensure that your policy limit is high enough to cover the total value of all of your belongings. Decide if you want an actual cash value policy or a replacement value policy. An actual cash value policy is a little cheaper, but it considers the current value of your possessions and you’ll be compensated on that value if you file a claim. For example, computer equipment and mobile devices depreciate quickly, which means they will likely cost much more to replace than the amount you receive from the insurance company.

Most renters should consider a replacement value policy, which will compensate you to replace your old items with their new equivalents. According to the Insurance Information Institute, a replacement cost policy adds about 10% to your premiums in comparison to an actual cash policy.

You’ll also need to pay slightly more for additional coverage, known as “riders” or “floaters,” to cover those particularly valuable items called out in your inventory.

Shopping for renters insurance based primarily on price isn’t necessarily a winning strategy. Consumers should consider affordability when evaluating renters insurance policies but also evaluate important aspects like the specific coverages offered and customer service quality. Higher-rated companies may be better for a variety of reasons even if they’re more expensive, such as better financial strength or higher customer satisfaction. They also might have greater opportunities for savings or discounts, which could make them cheaper for you in the long run. Furthermore, while renters insurance policies are often similar from company to company, there are important differences, such as coverage limits. Depending on your situation, it may be worth a slightly higher premium to ensure you have the specific coverage you need to make sure your priorities are met.

Renters Insurance Companies

U.S News Renters Insurance Guides

Other Ratings From 360 Reviews

For information on other forms of insurance visit our other guides.

The following describes our 360 approach to researching and analyzing renters insurance companies to provide guidance to prospective consumers.

Why You Can Trust Us: 15 Renters Insurance Companies Researched

1. We researched the companies and products people care most about.

U.S. News analyzed and compared a variety of publicly available data, including internet search data, to determine which renters insurance brands Americans are most interested in. We found 15 companies that stand out in terms of volume of searches and research among consumers, as well as across the different rating sources. Once we identified these companies, we reviewed the companies’ available renters insurance features offered at the time of publication.

We compared policy costs across different companies using an archetype that, as much as possible, represents a typical American renter: a 33-year-old individual renting a 1,200 square-foot apartment with one other roommate in a building with a local fire alarm and sprinkler system. We built a standard plan that includes property/contents coverage of $30,000, liability coverage of $100,000, and a $500 deductible. We collected quotes from four locations – Chicago; Cleveland; Glendale, Wisconsin; and Indianapolis – to get a better idea of price variations for a standard plan across different areas. We then took the median value of the price quotes we received to create a sample monthly plan cost.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.

Our scoring methodology is based on a composite analysis of the ratings and reviews published by credible third-party professional and consumer review sources. The ratings are not based on the personal opinions, tests or experiences of U.S. News. To calculate the ratings:

(a) We compiled two types of third-party ratings and reviews:

  • Professional Ratings and Reviews: Many independent renters insurance evaluating sources have published their assessments of renters insurance companies and products online. We consider several of these third-party reviews to be reputable and well-researched. However, professional reviewers often make recommendations that contradict one another. Rather than relying on a single source, U.S. News believes consumers benefit most when these opinions and recommendations are considered and analyzed collectively with an objective, consensus-based methodology.
  • Consumer Ratings and Reviews: U.S. News also reviewed published consumer ratings and reviews of renters insurance providers. Sources with a sufficient number of quality consumer ratings and reviews were included in our scoring model.

Please note that not all professional and consumer rating sources met our criteria for objectivity. Therefore, some sources were excluded from our model.

(b) We standardized the inputs to create a common scale.

The third-party review source data were collected in a variety of forms, including ratings, recommendations and accolades. Before including each third-party data point into our scoring equation, we had to standardize it so that it could be compared accurately with data points from other review sources. We used the scoring methodology described below to convert these systems to a comparable scale.

The 360 scoring process first converted each third-party rating into a common 0 to 5 scale. To balance the distribution of scores within each source’s scale, we used a standard deviation (or Z-Score) calculation to determine how each company that a source rated was scored in comparison to the source’s mean score. We then used the Z-Score to create a standardized U.S. News score using the method outlined below:

  • Calculating the Z-Score: The Z-Score represents a data point’s relation to the mean measurement of the data set. The Z-Score is negative when the data point is below the mean and positive when it’s above the mean; a Z-Score of 0 means it’s equal to the mean. To determine the Z-Score for each third-party rating of a company, we calculated the mean of the ratings across all companies evaluated by that third-party source. We then subtracted the company’s rating from the mean and divided it by the standard deviation to produce the Z-Score.
  • Calculating the T-Score: We used a T-Score calculation to convert the Z-Score to a 0-100 scale by multiplying the Z-Score by 10. To ensure that the mean was equal across all data points, we added our desired scoring mean (between 0 and 10) to the T-Score to create an adjusted T-Score.
  • Calculating the common-scale rating: We divided the adjusted T-Score, which is on a 100-point scale, by 20 to convert the third-party rating to a common 0-5 point system.

(c) We calculated the 360 Overall Score based on a weighted-average model.

We assigned “source weights” to each source used in the consensus scoring model based on our assessment of how much the source is trusted and recognized by consumers and how much its published review process indicates that it is both comprehensive and editorially independent. The source weights are assigned on a 1-5 scale. Any source with an assigned weight less than 2 was excluded from the consensus scoring model.

Finally, we combined the converted third-party data points using a weighted average formula based on source weight. This formula calculated the consensus score for each product, which we call the 360 Overall Rating.

U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.


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