The Best Renters Insurance Companies for 2020 | The Simple Dollar

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The Best Renters Insurance Companies for 2020 | The Simple Dollar


Renters insurance is so affordable, not having it is a huge financial risk. While your landlord’s home insurance may cover damages to the structure you live in, it won’t cover any of your belongings. Renters insurance costs an average of $180 a year, making it an incredibly affordable policy.

To find the best renters insurance in 2020, we used our proprietary scoring system, the SimpleScore. To build our list of top picks we compared coverage options, customer support, customer satisfaction, discounts and accessibility for every major provider.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

Why trust us in finding the best renters insurance?

The Simple Dollar strives to help consumers find the best insurance companies for their needs. To identify the best renters insurance companies on the market, we looked at discounts, coverage options, customer satisfaction, support channels and website accessibility for major providers.

For a deeper dive, we evaluated the online tools, educational resources and mobile app for every company. We looked for providers that offer digital tools that can help first-time renters insurance buyers determine what type of coverage they need and how much coverage is appropriate.

We also considered reviews from experts in the insurance field like J.D. Power, AM Best and the Better Business Bureau (BBB). These organizations measure customer satisfaction and financial strength, two of the most important factors to consider when choosing a renters insurance company.

The best renters insurance companies for 2020

Compare the cost and coverage of the top renters insurance companies

Companies Compare Coverage Options Average Monthly Cost SimpleScore
Allstate Flood insurance, personal umbrella, personal property, reimbursed living expenses, liability, identity theft, guest medical $15 4.2
Nationwide High-value items, theft extension, water backup, earthquake $20 3.8
Liberty Mutual Personal property replacement, blanket jewelry, earthquake damage As low as $5 4
American Family Identity theft, pet insurance, travel protection, home-based business Not disclosed 4.8
State Farm Additional liability, identity theft, earthquake damage, business property, incidentally business Not disclosed 4.2
MetLife Identity theft, luxury items Not disclosed 2.25
USAA Computer coverage, valuable personal property, As low as $10 3.8

Best renters insurance companies reviewed

Best for online tools – Allstate

If you dread making phone calls, you’ll love Allstate’s mobile app. It even lets you file a claim without talking to anybody.

Go with Allstate if you prefer a mobile and online experience over contact with a customer service advisor. The insurer’s embrace of technology sets it apart from the competition. Allstate stands apart from the competition with its mobile app. Those who are comfortable with online and mobile banking will appreciate the digital interface. You’ll be able to file a claim, review your bill or access details about your policy through the app. The website is loaded with plenty of learning resources and tools about insurance, personal finance and retirement planning.

Compared to its competition, Allstate offers the most options for additional coverage. You can add coverage to your policy for a myriad of protections. Some of its add-on options include reimbursed living expenses, liability coverage, guest medical coverage, identity restoration coverage, flood insurance, personal property and scheduled personal property coverage.

Best for coverage add-ons – Nationwide

It’s possible Nationwide is all looks and no show — it boasts a ton of extra customer-focused perks, but doesn’t have the satisfaction ratings to back it up.

SimpleScore

3.8 / 5.0

SimpleScore Nationwide 3.8

Coverage goes beyond your home and includes stolen items from your watercraft or vehicle. Nationwide may have the broadest range of insurance products of all the providers, with coverage for vehicles, motorcycles, boats, life, farm and even pets. If you have renters insurance with Nationwide you can extend that coverage to protect variations of property theft, like if something is stolen from your boat, trailer or vehicle.

Additionally, Nationwide includes card coverage as part of its standard renters policy for times when your credit card is stolen and large fraudulent charges are made. The company also offers a free consultation with a representative to review your insurance policies and make sure you’re covered adequately. Despite all this, the company ranks below average in customer satisfaction. It earned a score of 831/1,000 in J.D. Power’s 2020 Renters Insurance Study.

Best for discounts – Liberty Mutual

Liberty Mutual discounts are a win-win scenario — it’ll discount your premium for things that make both your lives easier.

SimpleScore

4 / 5.0

SimpleScore Liberty Mutual 4

When you’re on a budget and you’re looking for the best deal, check Liberty Mutual’s rates.Besides the standard rental coverage, Liberty Mutual has an add-on for higher-value goods that is worth checking out. If you lease or own computer equipment or electronics worth thousands of dollars or collect items that are appraised for high amounts, you can add a rider to protect your investment with just a $100 deductible. One issue with Liberty Mutual’s standard policy is that it lacks water damage coverage. You’ll have to add it as an optional coverage, so don’t forget to factor in the additional cost when you’re comparing different renters insurance policies.

Liberty Mutual basically hands out discounts. Ways to save money on your policy are effortless — opting in to autopay, being five years claim-free, shopping before your current policy expires, buying your policy online and purchasing another type of insurance with Liberty Mutual.

Best for competitive rates – American Family

American Family gets literal with discounts for generational customers and coverage for your furry family members too.

SimpleScore

4.8 / 5.0

SimpleScore American Family 4.8

Solid customer ratings, plenty of insurance options and competitive prices make American Family hard to beat. The company has a strong auto insurance offering and an enticing multiple policy discount. If you happen to need both, you can save up to 29% on auto and 15% on renters insurance by bundling.

American Family throws in bicycle coverage with your standard policy. If your bike is kept in storage that is not connected to your apartment, such as a community storage locker, American Family will cover your bicycle against theft or damage. It also has some other unique optional coverage additions like identity theft protection, pet insurance, travel protection and coverage for a home-based business.

Unfortunately, American Family has below average customer satisfaction ratings. It earned a score of 840/1,000 in J.D. Power’s most recent renters insurance study. The company also has limited availability. American Family only provides coverage in 19 states, primarily in the Midwest and the Pacific Northwest.

Best for managing your policy – State Farm

Jake from State Farm is probably single-handedly responsible for the company’s 5/5 customer satisfaction rating. If you don’t get Jake when you ring to get a quote, you can also use State Farm’s online portal.

SimpleScore

4.2 / 5.0

SimpleScore State Farm 4.2

State Farm’s online portal makes it simple to make changes to your policy and pay your bill electronically. State Farm is the largest insurance provider in the U.S and employs a vast network of agents nationwide. Despite that, the company has a below average customer satisfaction rating of 836/1,000 from J.D. Power. If you’d prefer to do things independently, the company’s online portal and quote tool is one of the best. You can plug in different deductible options to compare pricing.

If you’re looking for ways to save money, State Farm might not be the best for you. It has very few discount opportunities compared to our other recommendations. You can receive a discount for having multiple policies with State Farm and for installing home safety systems like smoke detectors or burglar alarms. There’s a chance you’re quoted a low price regardless, but keep in mind you might find a better price elsewhere.

Best for customer support – Metlife

MetLife doesn’t do online. Yeah, seriously. But, its representatives are so helpful that you’ll walk away glad you called.

SimpleScore

2.3 / 5.0

Customer Satisfaction N/A

Ideal for individuals that prefer guidance from knowledgeable agents. MetLife wins the category for best customer support because of its phone and email support representatives. The insurer doesn’t provide an online quoting tool or as many online features as you’d find with other companies — you’ll need to contact the company directly. But the representatives are prompt and knowledgeable enough to make up for the lack of online implementation. You also might have a higher chance of scoring discounts by talking to a representative. There are some employers and organizations that qualify you for a discount.

MetLife is ideal for renters who own many high-value items, such as artwork, jewelry, collectibles or home electronics. You can add riders between $5,000 and $15,000 to cover any losses to your higher-ticket items.

Best for military members and families – USAA

USAA is a top-tier insurer to serve those who serve the country, but anyone else is out of luck.

USAA is the best renters coverage for military members and their families. USAA is a one-stop-shop financial company founded for military members. It provides banking, insurance, loans, retirement, real estate and investment services.

Besides the standard insurance coverages, USAA includes earthquake and flood coverage in the basic policy. Your belongings are also covered during a move, whether you’re packing, driving or storing it. It also includes identity theft coverage up to $5,000 and coverage for military uniforms. USAA provides plenty of value, but if you’re not in the military or related to someone who is, then you’re out of luck.

Why trust us in finding the best renters insurance?

The Simple Dollar strives to help consumers find the best insurance companies for their needs. To identify the best renters insurance companies on the market, we looked at discounts, coverage options, customer satisfaction, support channels and website accessibility for major providers.

For a deeper dive, we evaluated the online tools, educational resources and mobile app for every company. We looked for providers that offer digital tools that can help first-time renters insurance buyers determine what type of coverage they need and how much coverage is appropriate.

We also considered reviews from experts in the insurance field like J.D. Power, AM Best and the Better Business Bureau (BBB). These organizations measure customer satisfaction and financial strength, two of the most important factors to consider when choosing a renters insurance company.

Pros and cons of our rental insurance top picks

Carrier Pros Cons
Allstate Good mobile and online experience Rates may be higher than other providers
Nationwide Offers large variety of coverage options Customer satisfaction rankings are low
Liberty Mutual Offers a lot of discounts to keep rates low Coverage doesn’t include water damage
American Family Good discounts, large array of coverage Coverage limited to 19 states
State Farm National coverage, great online/app experience Rates may be higher than other providers
MetLife Strong customer service No online access available
USAA Highly rated customer service
Very low rates
Only available to active and retired military members and their families

What is renters insurance?

Owning a home is a significant responsibility. Not to mention, homeownership can be incredibly expensive. To keep costs low, many people choose to rent a home or apartment. If you’re renting to save money, buying renters insurance is a great way to protect your belongings and ultimately, protect your money.

Renters insurance protects your valuables and any damages to your rented home that would be your responsibility (and not the landlord’s). Often, your landlord’s home insurance policy doesn’t include coverage for your personal property. It may cover the building and its grounds, but it won’t replace your vinyl collection if your neighbor’s pipes burst and flood your living room. Renters insurance also pays to replace your belongings if they are stolen. In addition, renters insurance can pay the expenses of someone injured in your home and you are found responsible. Also, if you are unable to live in your home due to damages, renters insurance can help pay for a hotel stay.

The types of renters insurance policies

There are two types of renters insurance policies — actual cash value (ACV) and replacement cost value (RCV). When your personal items get damaged or stolen, an ACV policy will reimburse you for the item’s value minus depreciation. With an RCV policy, you get reimbursed for the item’s original value. Most renters insurance policies are ACV by default, but you can upgrade to an RCV policy if you don’t mind paying a higher premium.

How does renters insurance work

Renters insurance protects your personal belongings from theft or damage during a burglary as well as damage incurred due to fire, water or other unforeseen events. To purchase a renters insurance policy, start by creating a home inventory of everything you own and might want coverage for. Then determine the value of that collection and how much coverage you might need. Renter insurance companies will use that information along with your personal information — name, address, birthdate, number of people living in the home, date you want coverage to start — to build a policy with the right amount of renters insurance coverage. After you’ve decided on a policy, you’ll pay a monthly or yearly premium for that coverage. If anything happens to your belongings or home, you’ll file a renters insurance claim and (hopefully) be reimbursed to replace the damaged or stolen items.

Some of the specific incidents that renters insurance will cover include: fire and lightning, windstorm, explosions, riots, damage by vehicle (not your own), smoke, vandalism, theft, volcanic eruption and falling objects.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

Types of rental insurance coverage

All of the best renters insurance carriers provide access to four types of basic renters insurance coverage:

  • Personal property coverage: This renters insurance coverage protects the items in your dwelling like your clothes, computer, appliances and furniture
  • Liability coverage: Liability renters insurance coverage helps pay for the cost of lawsuits and your defense if you or someone in your household is involved in an accident or incident that harms others or causes property damage. It also pays for damages you cause to someone else’s property.
  • Medical payments to others: This renters insurance coverage pays a guest’s medical costs if they’re injured while visiting you in your home
  • Additional living expenses/loss of use: This renters insurance coverage pays for your expenses to live elsewhere if your home becomes uninhabitable due to a covered peril or loss

There are additional coverage options to add like pet insurance, flood insurance, earthquake protection, identity theft and luxury items coverage that vary by insurer.

Is renters insurance worth it?

For some people, it may be required by your landlord. If not, you’ll have to weigh the risks and your personal priorities. Renters insurance could be a good idea if you have a lot of valuables in your home you’d like to protect or live in an area more at risk for theft, fire or natural disasters. If your home is suddenly unlivable (like from flooding or a fire) and you don’t have anyone to stay with, some renters insurance policies will reimburse those displaced living expenses. Renters insurance is usually pretty affordable too, which makes the investment less daunting and the policy more valuable.

[ More: Is Renters Insurance Really Worth It? ]

Like with most types of insurance, it’s a betting game on the likelihood that something will happen — you either pay into insurance monthly on the chance you experience a theft or disaster large enough to warrant a claim for reimbursement, or you risk having to replace things out of pocket. If you have an emergency fund saved up, it might be a better financial decision to use that than pay monthly for insurance.

What’s not covered by renters insurance?

Renters insurance is comprehensive, but it doesn’t cover everything. Here are some of the perils that are not covered under standard renters insurance policies:

  • Flood damage
  • Earthquake damage
  • Wear and tear
  • Pest, rodent, or bug infestations
  • Mold
  • Rust
  • Valuable items

One of the misconceptions about renters insurance is that one policy is adequate for an entire household. In reality, a renters insurance policy will only cover the policyholder. Your roommate’s belongings are not covered by renters insurance. Even though they live in the same dwelling, if something happened to both your things (like a fire or theft), only yours would be covered by your policy.

If you’re concerned about gaps in coverage, there are certain add-on policies that can add extra protection. For instance, if you live in an area where earthquakes and floods are a threat, consider purchasing earthquake and flood insurance. Many renters insurance companies offer standalone policies for these perils.

[ More: When Renters Insurance Does and Doesn’t Cover Water Damage ]

If you need extra protection for valuables, a scheduled personal property endorsement is your best option. It allows you to “schedule” additional coverage for specific items, like a fine art collection or jewelry. Adding any endorsement to your policy will raise your premium, but it could save you money in the long run if you need to file a claim.

Renters insurance vs. condo insurance

Renters insurance and condo insurance are two different policies, but they share some similarities. They both include personal property, liability and loss of use coverage. However, condo insurance includes a policy that covers damage to the interior unit and usually comes with loss assessment coverage.

Renters and condo insurance policies don’t offer coverage for the exterior of the building or common spaces. Landlords and condo associations are responsible for carrying insurance that covers the physical building and shared spaces, like gyms, hallways and lobbies.

Average cost of renters insurance

The average cost of renters insurance is $180 a year across the nation, according to the Insurance Information Institute. When you think about the amount of renters insurance coverage you get with it — like personal property protection and liability — it’s cheap insurance compared to other types. For example, homeowners insurance costs an average of $1,211 a year, auto insurance has an average cost of $944 a year and life insurance runs about $841 a year.

Though you may want to own a home one day, you can at least take comfort in the fact that you’re saving, on average, about $1,031 in insurance by renting. Depending on where you live, those savings could be even more.

Is renters insurance cheap?

Generally speaking, renters insurance is pretty inexpensive. In fact, it’s one of the cheapest insurance policies you can buy. For comparison, auto insurance is much more expensive than renters insurance. The average driver pays $1,004 per year for car insurance. Home insurance, condo insurance and life insurance are also more expensive than renters insurance.

The reason why renters insurance is so cheap is because there is minimal risk to the insurance company. Renters insurance only covers personal property, liability and loss of use, it does not cover the building itself. Renters insurance can fit in most people’s budgets, and offers valuable coverage. Ask your provider if there are any discounts available if you bundle your renters insurance.

[ Read: Does Renters Insurance Cover Storage Units? ]

Renters insurance reimbursement forms

What is actual cash value vs. replacement cost?

When you shop for a renters insurance policy, your renter insurance company or agent will ask if you want an actual cash value or replacement cost policy. The answer to this question determines how much you will pay for your renters insurance policy as well as how you will be compensated in the event you file a renters insurance claim for losses related to your personal belongings. It’s important to evaluate which option works best for you before purchasing your renters insurance policy. The key characteristics of these two types of reimbursement plans for your renters insurance policy are:

Actual cash value

With this type of policy, your possessions are covered but not at the cost you purchased them. Depreciation is taken into account, meaning your property’s age and condition are considered when determining the amount your provider will give you. Actual cash value can save you money month-to-month on your renters insurance premium. It’s also a good option if the items you want to insure are relatively new because they will not have depreciated that much.

Replacement Cost

With this option, it doesn’t matter how old the item is or what its condition was at the time it was damaged. The cost to replace your item is paid to you in full. This type of coverage is a great option if you have a lot of aged, yet valuable property. The downside is that a replacement cost policy is more expensive than an actual cash value policy.

If you don’t have that many high-value items, an actual cash value would probably suffice, but review your policy limits before deciding. Estimate what it would cost to replace everything you own in the event of a catastrophic event. If partial coverage would leave you with a lot of out of pocket expenses, it may be worth choosing replacement cost.

How much renters insurance do I need?

When you purchase a renters insurance policy, you’ll need to decide how much coverage to get. As a general rule of thumb, you should have enough personal property coverage to protect the full value of your personal belongings, like clothing, furniture, electronics, appliances, and so on.

Keep in mind that most renters insurance policies have very low coverage limits for valuable items, such as jewelry, art and collectibles. If you keep valuable items in your home, you’ll want to look into a scheduled personal property endorsement.

In terms of liability coverage, that depends on your lifestyle and your financial assets. If you have guests over often, consider a higher level of liability insurance. Similarly, if you have money in a savings account, 401k, or stock portfolio, increasing your liability coverage is a good option. It protects your personal assets in the event of a liability lawsuit.

How to choose the best renters insurance for you

Start shopping around for quotes

It’s really easy to head to the website of companies offering renters insurance coverage and fill out some simple information about your dwelling to get a quote. Save those quotes and compare them, which ones offer the most coverage at an affordable price?

Check out discounts

The more discounts you can get, the better. Find out which renters insurance policies offer discounts that you can easily attain. If you have a security system in place already, a renters insurance company might give you an extra discount for that.

Filing a claim

How easy is it to file a claim with the insurer? If you’re expected to jump through hoops just to get a check to cover damages, then it might not be best to choose that renters insurance company. Some policies have easy mobile app access that can make filing a claim simple — that’s probably what you need during high-stress disasters and situations.

Coverage

To ensure that your property is insured, make sure that the renters insurance company offers coverage that will protect all of your belongings, especially the ones that are particularly important to you. Your plates and silverware may not be important, but your prized guitar, gaming computer or family heirlooms are.

[ Read: How to Buy Cheap Renters Insurance Online ]

What impacts rental insurance premiums?

A few things will influence your specific insurance premium. The amount of coverage is the biggest factor. The premium is basically a direct translation of the level of coverage you’ll be insured for.

The way you customize your policy can tweak your annual premium too. Repayment types for example — actual cash value will be a cheaper choice while replacement cost will lead to a higher premium. The deductible you choose changes the premium too. A higher deductible (the out of pocket responsibility before an insurance payout) will mean a lower premium and vice versa.

Location can also be a factor, as higher crime rates or natural disaster zones will raise policy costs.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

How to file a renters insurance claim

If you need to file a renters insurance claim, start by informing your landlord of why you need to file a claim and what the claim will cover. This is particularly important if your claim is related to fire, water or other damage that occurred to the building and affected your belongings. You most likely will need to get any related police or fire reports, repair documents, or other documentation from the landlord to supplement your claim.

If your belongings were stolen or damaged during a break-in, you will need to file a police report. If your renters insurance claim is related to a guest’s injury, be sure to get their personal information, medical insurance information and copies of any medical reports and bills.

Call your renter insurance company or agent, and notify them of your forthcoming claim. They may request additional information you will need to file with your claim. They also can tell you how long you have to file a claim. Once you have all of your documentation in order, you can file your claim in person at the agent’s office, online on the renter insurance company website, by phone or using the renter insurance company’s app.

Compile a list of all belongings that were damaged or stolen and need to be replaced. Taking photos of damaged belongings also are helpful when filing your renters insurance claim.

Renters insurance FAQs

No, renters insurance doesn’t require an inspection. This is because rental insurance doesn’t protect the apartment or house you’re renting but instead protects your personal belongings. It also covers the medical costs and legal fees if someone is injured in your home or by a pet.

Most renters should invest in rental insurance. A renters insurance policy a simple, inexpensive way to protect your belongings and ensure you’re covered in case something happens to the home or apartment you’re renting. You may not think your possessions are worth much, but they are. You don’t want to be stuck with the bill if a fire, flood or natural disaster destroys your rental. You also don’t want to be stuck with the bill for a temporary rental — and with the right rental insurance coverage, you won’t be.

If you’re moving to a new place in the same state, you most likely just need to update the address on your policy account. However, if you’re moving out of state, you may need to take out a new policy per that state’s regulation. Either way, it’s relatively painless to update your information and renters insurance when you move.

It’s possible — but it’s probably not the best idea. In general, if you’re the policy holder, your stuff will be covered under your policy and your roommates stuff will be excluded. You might be able to add your roommate to your renter’s policy, but be careful with this. If something happens and you’re stuck making a large claim on your insurance, you could end up exceeding the policy limits if you’ve got two people under the coverage. You’re also going to pay more for your policy if you add a roommate. It’s usually cheaper and better for everyone to have two or more separate policies instead among roommates.

Yes, your renters insurance claim can be denied, just like any other type of insurance claim can be denied. This generally happens if there’s a blatant violation of the policy, like having a dangerous or ineligible breed of dog on the property. It can also happen if you’re making a claim that’s due to an excluded peril, like a loss due to a flood with no flood coverage.

However, if you’re making a valid, covered claim that aligns with your coverage, it’s unlikely that you’ll get your claim denied by your insurer.

We welcome your feedback on this article and would love to hear about your experience with the renters insurance companies we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

In response to the Covid-19 pandemic, many insurance companies provided relief in the form of percentages back on monthly bills as well as a freeze on coverage cancellations due to inability to pay. While it’s not recommended, you could technically stop your coverage to save money if absolutely needed — but again, it’s strongly advised against.

Furthermore, many landlords have also agreed to delay or reduce rent in order to allow their tenants to find their financial footing during economic shutdowns. Reach out to your insurance company and landlord if you’re having trouble paying — it’s very likely that they will be willing to work with you to find a solution.



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