Think you don’t need renters insurance unless you’re elderly, wealthy, or have pricey furniture or art collections? Think again.
If this is the case, you’ve fallen victim to one of the fallacies regarding renters insurance. And if you don’t have basic personal liability coverage for your property, you’re gambling with your financial future.
Peace of mind is valuable, and protecting yourself against potential financial catastrophe is less expensive than you may believe. You also have several inexpensive renters insurance coverage alternatives to select from.
Best Renters Insurance Providers:
These are the top renters insurance providers on the market. But no two insurance companies are the same, so when choosing a policy, you should look at each company’s strengths and weaknesses, not just its insurance premiums.
Pay close attention to third-party rating agencies such as A.M. Best and J.D. Power. Their opinion is more important than a thousand anonymous consumer evaluations.
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#1. Lemonade
Lemonade is a lean, agile renters’ and home insurance provider with a quick onboarding procedure and an all-online policy application workflow that makes getting renters insurance and moving on with your life simple. Lemonade boasts that the average application takes only 90 seconds to finish, which is an order of magnitude faster than most competitors.
Additional characteristics include:
- First place in J.D. Power’s 2020 home insurance survey (866 out of 1,000 points).
- Basic plans start at $5 per month.
- manages a “triple bottom line” – people, earth, and profit — as a Public Benefit Corporation and an accredited B-Corp.
- Claim processing is quick and mostly automated; the typical claim takes only 3 minutes to complete.
#2. State Farm
State Farm is one of the largest insurers in the United States, period, and has the most local agent network of any renters insurance business on this list, with about 20,000 in total. You are not required to work with a State Farm agent to open or maintain a renters insurance policy, but it is comforting to know that if the need arises, you may contact a live person in your town.
Additional characteristics include:
- A.M. Best gave an A++ (Superior) rating for financial strength.
- As add-ons, you can get coverage for earthquakes and floods, as well as protection for important items that you list.
- When you combine renters insurance with motor insurance, you may save up to 17%.
#3. Amica
Amica provides affordable, customer-friendly renters insurance with a smile. Policies start at less than $20 per month, but your actual cost may vary depending on where you reside, what you cover, and which extra add-ons you select.
Amica distinguishes itself from the competition by providing distinct value-adds such as:
- A quick application procedure that produces a workable policy in minutes.
- When you combine your renter’s, car, life, and umbrella insurance, you may save up to 15%.
- Amica offers a loyalty discount after only two years of service.
- After only three years, you are eligible for a claim-free discount.
- A.M. Best gave an A+ (Superior) grade for financial strength.
#4. Allstate
Allstate is a full-service insurance company that is frequently cited with State Farm. While State Farm has a larger local agent network, Allstate has an advantage when it comes to insurance add-ons such as:
- Personal property listed
- Coverage for identity theft restoration
- Allstate recommends umbrella insurance for pet owners in multi-tenant dwellings.
- Medical coverage for guests, even if you are not at fault.
Additional characteristics include:
- Renters insurance may be added to an existing vehicle policy for as little as $4 per month.
- A monthly premium of $16 is the average.
- Nonworking seniors receive a 25% discount (55 and older).
#5. Erie Insurance Company
Erie Insurance is well-known for offering drastically reduced insurance packages. When you combine your renters’ policy with auto insurance, life insurance, automobile insurance, or other products, you may be eligible for premium reductions of 30% or more.
Additional characteristics include:
- In J.D. Power’s 2020 home insurance assessment, we ranked second in total customer satisfaction.
- Over 12,000 local agents (an average of 1,000 per state served)
- When you’re ready to buy great homeowners insurance,
- A.M. Best gave an A+ (Superior) grade for financial strength.
#6. Farmers
Farmers Insurance is one of the few renters insurance firms that offers premium savings for public officials such as firemen and teachers. These savings vary by region and may not be available everywhere, but they are a great help for hardworking tenants who aren’t always paid enough.
Additional characteristics include:
- Discount for non-smoking households (after two years)
- Discounts for members of affiliated organisations
- “Personal articles floaters” (customizable sub-policies) for individual objects valued at more than $500 are available.
#7. Nationwide
Nationwide’s typical renters insurance policies outperform those of numerous competitors. It provides, for example, identity theft protection and zero-liability fraud protection for illegal debit card purchases at no extra cost — above-and-beyond perks that may be quite useful for budget-conscious tenants.
Brand New Belongings is an optional replacement cost add-on from Nationwide. If you are prepared to pay somewhat higher premiums, Nationwide will repay you at the expected cost of purchasing new replacements for stolen or damaged things, rather than their current cash value, as is more common. After a single burglary or covered loss, this policy is likely to pay for itself.
#8. Policygenius
Policygenius, a quotation aggregator, does not issue its own policies, yet it is worth inclusion on this list. Policygenius walks you through the process of building a policy. It saves you time by letting you choose from different coverages, deductibles, and add-ons and by giving you quotes from many different providers.
You’ll receive a flood of renters insurance quotes in an easy-to-understand style, making it simple to choose the most cost-effective coverage without combing through emails or calling around for hours.
How We Choose the Best Renters Insurance Providers
We evaluate renters insurance businesses using various key factors. We pay close attention to indicators related to organisations’ chances of settling claims, policyholders’ variety of options and comparable cost, and overall customer experience.
Rating of Financial Strength
Based on financial reserves and other indicators, a third-party financial strength rating determines how likely an insurer is to pay out on claims. We rely on ratings from reputable independent rating companies that evaluate insurers objectively.
Index of Customer Satisfaction
We also use third-party customer satisfaction ratings, which use customer surveys and other data to assess how effectively businesses serve their consumers (on average). While your experience may differ, a strong customer satisfaction rating should give you some peace of mind that your insurance will treat you properly.
Coverage Alternatives
Renters insurance is not as sophisticated as other types of insurance, but it can come in a variety of formats and may include riders (add-ons) that impact the cost and coverage. And, while insurers with more coverage alternatives aren’t always better than those with more narrowly focused offerings, we favour those that can meet a wide variety of client demands.
Relationships are not free.
On average, renters insurance is less expensive than homeowners’ insurance. It is also less costly than many first-time applicants believe.
Nonetheless, rates differ depending on the insurer and coverage. We seek insurers who provide better overall value for policyholders’ money — not necessarily the absolute lowest cost, but a favourable mix of price, coverage, and claims.
The Application Procedure
Applying for property insurance should not be a difficult process. While most renters insurance providers now accept applications online, the length and complexity of the procedure vary greatly. We choose businesses that make applying for renters insurance, as well as increasing or decreasing coverage, as simple as possible.
The Claims Procedure
When you make a valid claim, you have the right to expect your insurance carrier to process, authorise, and pay it as soon as possible. Regrettably, this is not the norm. We pay great attention to customer-reported claims concerns as well as third-party reviews of insurers’ claim procedures to ensure that we only suggest businesses that deliver on their commitments.
FAQs about Renters Insurance
Is Renters Insurance Really Necessary?
Probably. Renters insurance, despite longstanding notions to the contrary, makes sense for many renters.
Renters insurance is a wise investment if you don’t want to spend out of pocket to replace valuable goods, even “everyday” items like your TV, couch, or home computer. And don’t expect your landlord’s property insurance to cover the cost of replacing these items. Their policy just covers the structure, which is useless to you.
Renters insurance can also protect you from liabilities that may arise during your stay. For example, if a guest is injured in your flat, you may be held accountable for their medical costs and lost income, rather than your landlord. Renters’ insurance can help cover the costs.
How Much Is Renters Insurance?
Not nearly as much as you might believe. Your exact monthly or yearly premium is determined by factors such as:
- The policy’s monetary value (the most it will cover)
- The deductible on the policy (how much you have to pay out of pocket before coverage kicks in)
- Whether or not you own something very valuable, like gold or diamond jewellery (which may need extra insurance),
- Whether your coverage covers the replacement cost value (RCV) of products versus the actual cash value (ACV), with the former being far more expensive.
However, a basic ACV insurance policy with a limited coverage limit and a large deductible is likely to be quite reasonable-maybe as little as $10 or $20 per month. That’s not much more than the cost of your preferred streaming service.
What Is Covered by Renters Insurance?
Renters insurance policies cover three sorts of situations:
- Contents coverage pays you back for things that are lost or broken because of insured risks.
- Coverage that covers the costs of claims filed by people injured or ill on your rental property.
- Loss of use coverage pays for a place to stay in the meantime if a covered event makes your rental unit unlivable.
To evaluate whether to cover certain occurrences, renters insurance plans employ one of two lenses: “identified perils” or “all risk” policies.
The former restricts coverage to certain events mentioned in the policy, whereas the latter covers claims relating to any occurrence save those explicitly excluded by the policy. The average premium for “named peril” plans is lower than for “all-risk” policies.
What Is the Distinction Between RCV and ACV?
Renters insurance plans assess compensation using two separate scales: replacement cost value (RCV) and actual cash value (ACV) (ACV).
An RCV policy computes the replacement cost based on the current market value of a suitable substitute. In other words, RCV covers the cost of a brand-new replacement.
An ACV policy takes depreciation into account. It pays what the insurer believes you would obtain if you sold an item secondhand. That is considerably less than the RCV for older products.
RCV insurance has higher premiums than ACV policies because they offer bigger rewards. If you own a lot of newer items, an ACV policy may still give a fair payout while fitting better within your budget.
How to Select the Best Renters Insurance Provider
Consider how renters insurance providers meet your individual coverage needs as a tenant while reviewing them. Pose queries such as
- Is the insurer’s policy inclusive of content coverage, liability coverage, and loss of use coverage?
- Is the replacement cost value (RCV) or actual cash value (ACV) scale used in payouts?
- Does insurance cover “all risks” or simply “designated perils”?
- Can you directly add extra coverage for valuable things to the insurer’s policies?
- What additional riders and changes are there?
You should consider aspects such as financial strength scores and customer happiness ratings. Even if an insurer looks to check all the boxes, it’s useless if they can’t pay out on a future claim.