Best Renters Insurance Companies of 2020 | Renters Insurance

Elroy Mariano

Best Renters Insurance Companies of 2020 While homeowners often are required by their lender to have homeowners insurance, many renters are under no such constraints. Renters insurance is neither mandated by law nor demanded by every landlord. Yet just as driving a car responsibly requires insurance, it’s a good idea […]

Best Renters Insurance Companies of 2020

While homeowners often are required by their lender to have homeowners insurance, many renters are under no such constraints. Renters insurance is neither mandated by law nor demanded by every landlord.

Yet just as driving a car responsibly requires insurance, it’s a good idea to insure your possessions in your rental property from being damaged or destroyed in a fire or other unforeseen event. And thanks to companies with online and mobile options, it’s easier than ever to find a policy to fit your budget.

“Renters insurance can be surprisingly affordable, though it does pay to shop around,” says Eric Cioppa, president of the National Association of Insurance Commissioners (NAIC) and superintendent of the Maine Bureau of Insurance. He says that a landlord’s insurance doesn’t cover tenants’ personal property, so they are well-advised to take out their own insurance policies. But according to a 2018 survey by the Insurance Information Institute, although 91% of homeowners had purchased homeowners insurance, only 46% of renters had purchased renters insurance. If you’re on the fence about whether to get renters insurance yourself, this guide will help you make an informed decision.

People who rent or sublet an apartment, condo, studio, duplex, town-home or single-family home can purchase renters insurance. Renters insurance covers the personal property of a policyholder. It also covers personal liability if the policyholder is sued for an accident on their rental property, and some policies provide living expenses if the rental unit becomes uninhabitable due to a covered loss. The term “personal property” is used to distinguish from real property that’s fixed and moveable, which can include buildings and land. Personal property includes tangible assets such as vehicles, boats, electronics and collectibles, as well as intangible property like stocks and bonds.

Renters insurance will pay for legal fees and other liability-related expenses in the event of a lawsuit for bodily injury or property damage if the renter, a family member or a pet may be at fault. However, all renters insurance policies have coverage limits – including for liability coverage – so be sure to check whether the limits of a policy you’re considering are sufficient. Also consider no-fault medical coverage, which lets someone who is injured on your rental property send medical bills directly to the insurance company without filing a lawsuit.

Don’t buy into the common misperception that a landlord’s insurance policy will cover a renter’s personal damages or liability. The landlord’s policy covers assets such as the building, but it doesn’t cover the renter.

For this reason, landlords often require tenants to have a renters insurance policy before signing a lease to help avoid disputes if the tenant’s belongings are damaged on the rental property.

“Some renters may think the landlord is responsible for damage to personal property, but they are not,” says Scott Holeman, spokesman for the Insurance Information Institute. “To financially protect yourself, you’ll need renters insurance.” He notes that renters insurance protects against a variety of losses, such as smoke, fire, explosions, theft, vandalism, windstorms and lightning. Some policies also cover water damage from pipes or a leaking appliance, although flood and earthquake coverage usually requires a separate policy.

Protection for personal assets is especially important if you live with one or more roommates. As the number of people in the household increases, so does the risk of loss or damage to the tenants’ property. Adequate coverage can help minimize disputes between roommates if something happens.

Top Renters Insurance Companies of 2020

USAA

4.0 out of 5

Score

N/A Sample Monthly Cost
A++ A.M. Best Rating
Learn More
Allstate

3.9 out of 5

Score

$21.00 Sample Monthly Cost
A+ A.M. Best Rating
Learn More
State Farm

3.9 out of 5

Score

$19.25 Sample Monthly Cost
A++ A.M. Best Rating
See Review
USAA

4.0 out of 5

Score

N/A Sample Cost
A++ A.M. Best Rating
Learn More
Allstate

3.9 out of 5

Score

$21.00 Sample Cost
A+ A.M. Best Rating
Learn More

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

Lemonade Renters Insurance

Lemonade

Lemonade
Sample Monthly Cost
$11.25
Online Tools
Online Application

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

Pros

  • Signing up for insurance is fast and easy

  • Lemonade offers a wide variety of coverages

  • A mobile app is available for claims, questions and other issues

Cons

  • Insurance products are only available in about 25 states

  • Customers can’t bundle their renters policies with other insurance

Types of customer support available
Lemonade offers customer support online. Customers also can purchase a new policy, manage or cancel an existing policy, file claims and have questions answered using the mobile app.

What discounts are offered?
Lemonade offers discounts for installing protective equipment like fire alarms and home security systems.

Unique or useful policy features and customization options
The Lemonade Giveback program was designed to align the financial interests of the insurer and policyholders. Specifically, Lemonade says that because it doesn’t make money by denying claims, it has eliminated a common conflict of interest between itself and its customers.
Read More»

Erie Renters Insurance

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

Pros

  • Policies are priced on the low side, especially if bundled with auto insurance

  • The company gets an A+ financial strength rating from A.M. Best

Cons

  • Renters insurance is only available in 12 states and Washington, D.C.

  • Online tools and information are limited, and no mobile app is offered

Erie’s financial strength rating
Erie has an A+ financial strength rating from A.M. Best.

Types of customer support available
Erie customer service is available over the phone and through its website. In addition, customers can review quotes online but need to contact an agent to confirm the quote and purchase a policy. Erie does not currently offer a mobile app.

What discounts are offered?
Erie offers discounts to customers who bundle renters insurance with another type of insurance, such as auto. The company also offers discounts for customers who live in rental properties that have alarm systems or sprinklers installed. In addition, customers can lock in prices so they’re not subject to unexpected large increases in their premiums.

Unique or useful policy features and customization options
Other unique services include replacement cost loss settlement and comprehensive perils for personal loss. Erie also offers personal catastrophe liability insurance that adds another $1 million for covered claims for bodily injury, emotional stress, libel, slander or accidental damage to another person’s property brought against you or your family.
Read More»

USAA Renters Insurance

USAA

USAA
Online Tools
Online Estimate

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

Pros

  • A basic policy covers storms, floods and earthquakes

  • The value of damaged items is estimated at current cost

  • Users say the app is useful and popular

Cons

  • Insurance is only available to military members, veterans and their families

  • Unrelated roommates need separate policies

  • Limited replacement costs are offered for certain items

USAA’s financial strength rating
USAA has an A++ financial strength rating from A.M. Best.

Types of customer support available
USAA customer service is available online or over the phone. Policyholders also can use USAA’s mobile app to manage their payments, file claims and follow the progress of their claims on the app, as well as use other USAA services.

What discounts are offered?
USAA offers discounts for membership in the U.S. military, bundled coverage, property location and security measures, including smoke detectors, alarm systems, deadbolt locks and more.
Read More»

Regardless of your financial situation, it’s hard to justify foregoing renters insurance. If you don’t have much in the way of savings, you’ll need insurance if a fire, windstorm or other event damages your personal property. But even if you’ve saved enough to pay for the damage and any related legal liability, insurance is still a good idea because it helps cover the cost of these unexpected expenses, which can be considerable. Plus, the cost of your premium could pale in comparison to what your policy pays you in the event of a major loss. The average cost of a typical renters insurance policy is about $185 per year, according to the NAIC. This rate will vary based on your carrier, geographic location and credit score, but the monthly expense relative to the potential risk is nominal.

Even though renters insurance is relatively inexpensive, sorting through all the coverage options can be “extremely overwhelming,” says Naeem Kayani, an executive with CoreLogic Rental Property Solutions, a consumer reporting agency that provides information to the rental property industry. “To help narrow the selection and make sense of the noise, first check with your property manager for their specific policy requirements and any preferred providers. Be prepared to compare the costs and coverage options, find out how much your possessions are worth, and decide which dangers your apartment may face.”

Start by making sure you have enough coverage for all of your property and other potential expenses, such as liability. Unfortunately, renters frequently make the mistake of “not insuring their personal property to the full replacement cost because they don’t know that amount,” says David Stegall, principal consultant with Risk Consulting & Expert Services in Birmingham, Alabama. “Renters and homeowners need to do an inventory of their personal property, or at least take pictures or videos of each room in your home,” he says. “Get the serial number or anything that will identify the property for a claims adjuster and indicate what you paid for it.” You may even be asked where you purchased the item. “This inventory will be the first thing the adjuster will ask for when you file a claim, and it will give the policyholder a reasonable idea of how much it would cost to replace all of their personal property if the ‘big’ claim occurs,” Stegall says.

In addition to making an inventory, locate receipts and appraisals, which will also be important if you have to file a claim. Once these steps are complete, back up the data online or to a separate hard drive stored in a secure physical location, preferably well away from your rental property.

State

                   
Alabama                    
Alaska                    
Arizona                    
Arkansas                    
California                    

U.S. News & World Report (U.S. News) prepared this content about insurance companies for general informational purposes only. Neither U.S. News nor the individual writers of this content are licensed to sell or advise on insurance products. Some coverages, discounts and features may not be available in all states. For more information about any of the companies or products profiled herein, or to inquire about the purchase of insurance, please contact the insurance company, an insurance agent or a financial advisor. This content is not, and should not be considered to be, a recommendation to renters insurance products generally or an endorsement of a particular insurer or product. Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

There are two primary types of renters insurance coverage:

  • Actual Cash Value. This coverage pays to replace your personal property at its depreciated value, up to the policy’s limits.
  • Replacement Cost. This coverage pays to replace your personal property at its actual cost rather than the depreciated value, up to the policy’s limits.

Replacement cost coverage is about 10% more expensive than actual cash value coverage, Cioppa says. However, replacement cost coverage is more likely to provide enough compensation to actually replace your belongings. For example, if your 5-year-old laptop computer is stolen, actual cash value coverage would only pay the depreciated cost of the computer. Replacement cost coverage, by contrast, would pay for a comparable new computer.
Renters insurance coverage can be broken down into the following categories:

  • Personal property coverage protects the renter’s possessions from theft, fire, bad weather and other covered perils, whether the renter purchased the property or received it as a gift. The renter will have to seek out supplemental insurance policies to cover floods, earthquakes or other disasters. The majority of renters insurance policies also provide “off-premises coverage” for items that are stolen, damaged or lost somewhere other than the rental property, such as the renter’s car. Like all coverages in a renters insurance policy, off-premises coverage will have a dollar limit, so make sure the limit of the policy you’re considering is high enough.
  • Liability coverage protects against legal liability for bodily injury or property damage caused by the renter, a member of his or her family or a pet. Legal fees and damage awards are covered up to the policy’s limit, which typically starts at about $100,000. Many renters insurance policies also provide no-fault medical coverage in the event a friend or neighbor is injured in the renter’s home.
  • Additional living expense coverage, also known as ALE or “loss of use” coverage, is another option to consider. With this coverage, if your rental unit is damaged or destroyed by a covered event and you’re forced to move out for a while and incur additional living expenses, ALE will cover the difference between those additional expenses and your typical living expenses. This could include a temporary rental unit, a hotel room, meals at a restaurant and similar items.

Additional Coverage to Consider

A basic renters insurance policy might not meet all of your needs. People with greater coverage requirements should consider the following:

  • Umbrella policies. Also known as excess liability coverage, these provide higher limits and broader coverage. According to the Insurance Information Institute, umbrella policies typically cost between $200 and $350 annually, for which the renter gets $1 million in additional liability protection.
  • Scheduled personal property insurance. Sometimes called endorsement insurance, floater insurance or a rider policy, this is an additional policy that will cover valuables like fine jewelry, artwork, collectibles, expensive cameras or other electronic equipment, musical instruments and antiques.
  • Business property insurance. Renters insurance covers personal property, not business property. If you have a home-based business, you’ll need separate insurance to cover equipment, inventory stored on the rental property and other business assets. And if you regularly work from home, talk to your employer about who’s responsible for company-owned equipment.

Don’t skimp on optional coverages that you might need, which are often inexpensive and could end up saving you thousands of dollars. Take a water-backup addition to your policy, for example. “If you live in an apartment unit with multiple stories, you may find water backing up in the kitchen sink without ever using the sink,” Kayani says. “This add-on coverage can help cover damage to belongings, including replacing furniture from water backup issues, but it is often overlooked.”

Also check for all available discounts from your insurance carrier. Renters may qualify for discounts if they:

  • Have a security system.
  • Install smoke detectors.
  • Install deadbolt locks.
  • Have good credit.
  • Stay with the same carrier for a long period of time.
  • Purchase multiple products with a single carrier.
  • Are over 55 years old.

Once you purchase a policy, know exactly what it covers, and never make assumptions. For example, many people wrongly assume that a renters insurance policy covers flooding. “People get water damage and floods confused,” Stegall says. “Water damage is normally covered by a renters policy, but floods are never covered. Think of it this way: If the water comes from above – precipitation, rain, snow, sleet, hail etc. – it is covered, as is water from pipes, mechanical systems, tubs, commodes, sinks, washing machines and dishwashers.” By contrast, he says, “water rising from below is a flood,” and any resulting damage isn’t covered.

Confusion can also arise when it comes to pets. If a pet is covered, a policy often will provide liability coverage if it injures someone. But some breeds of dogs are often excluded from coverage under a renters insurance policy, including mastiffs, German shepherds, pit bulls, rottweilers and dobermans, which are often seen as aggressive or overly protective.

In addition to your own policy, consider what other coverage you might have under someone else’s. For example, college students living in a dorm might be partially covered by their parent’s insurance, Cioppa says. But once a student moves off-campus or graduates and rents their first apartment, they should consider purchasing a renters insurance policy of their own, he says.

How to File a Claim

Here are the basic steps when filing a renters insurance claim:

  1. Safeguard your home and belongings. Before filing the claim, isolate your undamaged items to protect them. If personal liability is possible in the case of a dog bite or an accident, secure the animal or area to prevent further incident.
  2. File a police report. Police reports often can be filed immediately and over the phone, and the additional record will assist in filing an insurance claim. Make sure to document the police report number and get the name and the identity number of the officer preparing the report.
  3. Contact your landlord to inform them of the event, including any damage and potential liability. Document the conversation, either by email if time permits or by recording a phone call with the landlord’s permission.
  4. Contact your insurance carrier and file the claim as soon as possible. This usually can be done over the phone and/or online. Have your list of personal items available beforehand, and realize that the insurance carrier might require additional information to fully complete the claim.

An insurance claim can be paid almost immediately, in a couple of days or not for several weeks depending on the insurance company and the type of claim. The payment may come all at once or in installments, and you can keep the claim open and provide more information as it becomes available. Note that your claim won’t be paid if your deductible hasn’t been met or you’re behind on your premium payments.
Additional living expenses may be provided by your insurance company right away via an advance payment. Additional expenses will be paid once receipts are submitted. Don’t greatly exceed your normal living expenses, and do provide receipts to ensure complete reimbursement.

The insurer will pay the depreciated cost of lost or damaged items first even if you have a replacement value policy. This helps match the rest of the claim payment to the precise cost of replacing the property. You must actually replace items to qualify for replacement cost reimbursement; if an item isn’t replaced, you’ll be paid the cash value of the item adjusted for depreciation. In some cases, if the renter agrees, the insurance company can purchase, replace and ship the item to the renter.

Maintaining Adequate Coverage

Evaluate your renters insurance policy annually to make sure it’s still the best option for your current circumstances. In particular, update your home inventory and note any additions to your household, such as a pet.

If you have questions, contact your state’s department of insurance. Its role is to license companies and agents, regulate insurance policies and rates, review insurance company practices, educate consumers and resolve consumer complaints.

If you decide you no longer need renters insurance, your policy can be canceled with a phone call or sometimes online. If you cancel your policy before the term is up, any unapplied premiums will be returned to you. But don’t cancel without serious thought, and don’t let your coverage lapse by mistake. Leaving yourself unprotected, Kayani says, is one of the biggest mistakes any renter can make.

ology for Renters Insurance

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

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 homeowners insurance brands Americans are most interested in. We found 20 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 homeowners insurance features offered at the time of publication.

We compared available coverages from top homeowners insurance companies across several criteria, including cost, coverage limits, policy features and availability. Research shows that these criteria are among the most important considerations to people shopping for homeowners insurance. We compared cost across different companies using an archetype that, as much as possible, represents a standard American home: a townhome in Naperville, Illinois, with an estimated market value of $245,000, equipped with a home security system and fire alarms, belonging to a non-smoking, four-person family with no pets. We built a standard plan that includes coverage for the home itself, personal property, personal liability, loss of use/additional living expenses and guest medical protection, with a $1,000 deductible and comparable coverage amounts.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.
U.S. News’ 360 Reviews team applied an unbiased methodology that includes opinions from independent life insurance experts and 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 personal opinions 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 life insurance evaluating sources have published their assessments of life 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 life 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 mean from the company’s rating 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 two 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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