8 Best Renters Insurance of 2021
Renters insurance — also known as an HO-4 policy — is a homeowner’s insurance policy that protects a renter’s personal belongings against perils without coverage for the dwelling itself.
Read below to learn what companies met our criteria and how we found the best renters insurance companies.
Best Renters Insurance Companies of 2021
Erie Insurance: Best Renters Insurance for Comprehensive Coverage
Nationwide : Best Renters Insurance for Optional Add-Ons
Amica Mutual : Best Renters Insurance for Customer Experience
All State : Best Renters Insurance for Retirees
Auto Owners : Best Renters Insurance for Those Living Abroad
State Farm : Renters Insurance Company with the Largest Market Share
Lemonade : Most Innovative Renters Insurance Provider
Young Alfred : Best for Online Quotes from Top Providers
Erie Insurance: Best Renters Insurance for Comprehensive Coverage
J.D. Power Ranking: #6
Complaint Ratio: 0.27
A.M. Best Rating: A+
Pros
Bundle policies together
Expand personal liability coverage to include personal injury claims due to slander, discrimination, and cyberbullying
Replacement-cost coverage instead of reimbursement for the current value
Comprehensive coverage of perils
Sewer and drain water backup coverage
Coverage for losses caused by guests if you participate in home-sharing
Cons
Available only in 12 states — Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin — and the District of Columbia.
Not all products and services are offered in these states
Erie Insurance offers various customizable policy bundles. Instead of covering just specific damage cases, their base renters policy provides comprehensive coverage for most natural disasters and perils. In case a particular risk is not covered, Erie offers a variety of endorsements to customize coverage to each individual.
Besides their basic coverage, Erie offers three other service levels. The Advantage bundle increases coverage limits above base levels and includes identity theft coverage. The Plus bundle waives the deductible if your loss exceeds $50,000 and increases coverage limits, adding coverage for trailers, watercraft, pets, and business personal property.
Lastly, the Select bundle, Erie’s most comprehensive option, includes everything mentioned above but with higher limits, coverage for a larger watercraft, and reimbursement for the costs of criminal defense for up to $25,000 if you successfully fight a criminal indictment against you or your family.
Nationwide: Best Renters Insurance for Optional Add-Ons
J.D. Power Ranking: #5
Complaint Ratio: 0.60
A.M. Best Rating: A+
Pros
Can be bundled with auto, home, and life for a discount policy rate
Claims can be filed online, on the phone, or with an agent
Up to 24 months of coverage of Additional Living Expenses (ALE)
A variety of optional extensions to fit specific needs
Comprehensive basic coverage
Cons
Not available in Alaska, Hawaii, Louisiana, Massachusetts, or Oklahoma.
One of the ten largest insurance companies in the United States, Nationwide company offers an impressive array of optional add on coverage for renters insurance, including Brand New Belongings coverage to replace lost items; Valuables Plus coverage for high-value items; and Water Backup coverage for damages from backed-up sewers or drains. Other add-ons include Theft Extension for belongings stolen from your motor vehicle and Earthquake coverage for losses caused by earthquakes and volcanoes.
Nationwide also stands out for offering coverage limits for additional living expenses (ALE) if you’re unable to live in your rented property for a while. The policy also covers building additions, improvements, or installations done to your home, as well as credit card coverage for up to a certain amount of unauthorized transactions.
Amica Mutual: Best Renters Insurance for Customer Experience
J.D. Power Ranking: #1
Complaint Ratio: 0.22
A.M. Best Rating: A+
Pros
Policies start at $4 a week
Bundle with auto insurance and save up to 15%
Loyalty policy discount after two years
Premium reduction if you’ve been claim-free for three years
Cons
Discounts are not available in all states
Service is not available in AK and HI
Amica Mutual has ranked at the top of the J.D. Power Property Claims Satisfaction Study for almost a decade for its commitment to customer service. Not only this, but the company has the lowest complaint ratio out of all the companies we evaluated. Technical claims and road-side assistance are available 24/7 through live phone representatives.
Specifically relating to renters insurance, Amica has a program that allows you to earn credits — $100 a year for up to five years — to apply towards a homeowners insurance policy if you ever buy a house and purchase insurance from Amica.
Apart from these benefits, Amica’s renters policies are relatively standard. Optional coverages including those for personal property replacement-cost, additional coverage for smart devices and computers, and identity fraud coverage.
Allstate: Best Renters Insurance for Retirees
J.D. Power Ranking: #7
Complaint Ratio: 0.71
A.M. Best Rating: A+
Pros
Those over 55, not seeking full-time jobs, can get a retiree discount
Buy your policy online
Customize your coverage and see how your cost would change with the different options
Bundle renters and auto insurance to get a discount
Identity theft restoration is available for an additional premium
Up to 500K in “family liability” and 5k in medical payments to others
Off-premises theft is covered
Cons
Sparse policy information available online
Asks if you’re employed
Renters insurance policies with Allstate start at $4 when bundled with an auto insurance policy.
Allstate offers a retiree discount for policyholders over 55 and not actively seeking full-time employment with up to 25% off the regular premiums.
Users can get quotes online and customize their plans based on coverage level, insurer payout limit, and deductible amount. Additionally, Allstate offers a Home Inventory Guide and Digital Locker feature to help speed up any claims through the Allstate mobile app.
As one of the leading auto insurance providers in the US, Allstate offers a reliable renters insurance policy option backed by a well-known and reputable company that currently handles the US’s second-largest policy market share.
Auto Owners: Best Renters Insurance for Living Abroad
J.D. Power Ranking: #4
Complaint Ratio: 0.25
A.M. Best Rating: A+
Pros
Personal property and liability cover anywhere in the world
Bundle with home and auto insurance to lower your premium
Enroll in paperless billing and save
Discounts for paying on time or having a favorable loss history
Pay upfront to reduce the cost of your annual policy
Cons
No online quotes
Sparse information regarding policy structure available online
Not available in 24 states
Auto-Owners basic coverage offers Personal Property Coverage and Personal Liability Coverage for all your personal possessions and incidents occurring anywhere in the world. Included also is the Medical Payments to Others Coverage, to cover for anyone injured within your house, as well as Additional Living Expenses Payments for living expenses and accommodations after a covered loss.
Auto-Owners also offers optional supplements to your basic renters insurance policy, namely the Renters Plus, which covers loss of refrigerated products or damages due to water back-up. Also available, the Personal Property Replacement Cost coverage will repair or replace your belongings without adjusting value for depreciation.
State Farm: Highest Renters Insurance Market Share
J.D. Power Ranking: #9
Complaint Ratio: 0.49
A.M. Best Rating: A
Pros
Receive a discount when you bundle auto and renters insurance
Get a discount by installing a qualified home security device such as a smoke detector, burglar alarms, or home monitoring systems
Choosing a higher deductible can lower your premium
Cons
Discounts and additional policy offerings not available in all states
State Farm has the largest insurance market share in the US. The company is well known for its comprehensive list of policies and products covering everything from home & property to life insurance and all kinds of vehicles.
To receive a quote, potential buyers are encouraged to use their renters insurance quote checklist and contents calculator to properly assess their living arrangements and personal belongings.
With this information, the company can tailor a coverage price customized to your specific insurance needs, including optional renters insurance coverages such as additional liability, identity restoration, earthquake damage, additional business property, and incidental business liability.
Lemonade: Most Innovative Renters Insurance Provider
Pros
Holds a B-Corp certification for environmental and social responsibility
Lowes rates compared to other providers
Record a video of your claim and file it online using the app
File and get your claim approved in as little as 3 minutes
Cons
No replacement-cost option
Loss-of-use coverage has a dollar limit instead of a time limit
Not available in AL, AK, DE, FL, HI, ID, KS, KY, LA, ME, MN, MS, MT, NH, NC, ND, SC, SD, UT, VT, WV, and WY.
Lemonade is an online insurance company with an unusual business model. They take a fixed percentage of every renters insurance premium paid to cover its operational costs and then use the remaining money to pay out covered claims. Whatever funds are leftover at the end of the year are donated to a charity chosen by policyholders.
Overall, Lemonade is an excellent choice if you are looking for a cheap renters insurance policy with decent yet straightforward coverage. Lemonade’s standard policy is par for the course, with personal property, personal liability, and loss of use coverage all included.
You can customize your limits and deductibles to maximize your savings and add scheduled personal property if it’s worth it. Buyers can also get a policy discount by paying the total annual premium upfront and by installing protective devices in your home.
Young Alfred: Best for Online Quotes from Top Providers
Pros
Find quotes from over 40 top insurance carriers
Doesn’t sell your information to third parties
Available 24/7 online
A substantial part of their profit goes to a charity selected by the insurees
Cons
Prices may vary once the insuring company completes the underwriting process
As a third party seller, you will be subject to specific policies from the insurance provider
Young Alfred isn’t an insurance company, per se, but rather an insurance agency and comparison site. After answering a few short questions, Young Alfred will check your risk level against over a billion data points to give you customized online quotes from several top-rated renters insurance.
While this service is nothing new — there are dozens, if not hundreds, of insurance comparison sites on the internet — Young Alfred stands out in three important ways.
First, it only partners with companies rated A- or higher by financial rating firms A.M. Best and Demotech. Second, Young Alfred doesn’t sell your personal information to other companies. And finally, the site also offers a free risk assessment that details the risk of common insurance perils in the location you want to insure, so you can decide what optional policies are right for you.
Note: Neither Lemonade nor Young Alfred met all of the methodology requirements to be included in our list of Top Picks; as these aren’t included in J.D. Power’s 2020 U.S. Property Claims Satisfaction Study, aren’t registered with the NAIC, and have no financial strength rating from A.M. Best. Nonetheless, we believe they deserve serious consideration as two of the best renters insurance companies today.
Other Renters Insurance Companies We Considered
We focused on four areas of strength for our recommendations of best renters insurance companies: customer satisfaction scores, complaint index data, financial stability, and policy offerings.
To be part of our top eight renters insurance providers, companies had to have high marks in JD Power’s 2020 U.S. Property Claims Satisfaction Study, an NAIC complaint ratio well below the national average, and a solid financial rating (A and above) from A.M. Best.
Although this eliminated many companies from making our cut — The Hartford, Farmers, American Family, Metlife, AIG — there are still plenty others that offer renters insurance plans that can fit your needs, budget, and standards.
What You Need to Know About Renters Insurance
Owning a home requires insuring the dwelling itself, but that isn’t the renters’ responsibility. Consequently, renters’ insurance is far less expensive than homeowners’ insurance, often costing less than $20 a month.
What Does Renters Insurance Cover
Renters insurance includes three types of coverage options: 1) personal property; 2) personal liability and medical payments to others, and 3)loss of use. Here’s a quick rundown of each one and what they usually cover.
Personal Property Coverage
Covers the things you own or use
The property doesn’t need to be inside your home. You can claim items lost or damaged while in storage, inside your car, or even in a hotel room, which can be a great complement to travel insurance
Policies can cover other people’s belongings while they’re in your home
Personal property may be subject to coverage limits under the basic policy
If the property you want to insure exceeds the covered value, you would need additional personal property coverage, known as a “floater”
Actual cash value means a reimbursement only for the current value of the item at the time the loss happened
Replacement value coverage covers the full value cost of replacement
Renters insurance policies vary from company to company, but in general terms, personal property coverage applies if you suffer a loss or damage caused by any of these perils: fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, falling objects, weight of ice, snow, or sleet, overflow of water or steam from a heating system or appliance, cracking or burning of a heating system or appliance, power surge, freezing or plumbing, a heating system or appliance, volcanic eruption.
Personal Liability Coverage and Medical Payments to Others
Protects your assets in case someone is injured or there is damage on your property
If the affected person files a lawsuit against you, insurance can pay for the damages, at least up to the limit you chose when you bought the policy
If the incident causes an injury that requires someone else to seek medical assistance, the insurance could also cover that person’s healthcare costs
This coverage includes funeral costs should the injury result in death
Doesn’t apply to you or to people who live with you. Only guests or other third parties may file a claim for medical payments
Loss of Use Coverage
Sometimes called Additional Living Expenses (ALE) coverage
Covers the cost of staying somewhere else while damage to your residence is repaired or until you find a permanent place to live
Can include the cost of a hotel room or the rent for another apartment, as well as the costs for meals if you have to eat out instead of cooking at home
You could also claim the cost of boarding a pet, storing property, and even additional transportation costs to get back and forth from work at your temporary accommodation
If you expect to claim under this coverage, remember to keep receipts for all relevant expenses for the insurance company to determine your reimbursement
Identity Theft Protection
Covers the costs of financial recovery after someone uses your financial information or social security number fraudulently
Some companies charge extra for identity theft protection, while others include it as part of the base policy
Often includes a limited amount to reimburse you for money stolen from your bank account or credit card
Can include “credit restoration services,” which pay attorneys’ fees and cover the cost to hire a fraud specialist to help clear fraudulent charges from your financial records, helping you keep your credit score in check
It is usually for a set amount, and you can choose to waive the option
What Renters Insurance Doesn’t Cover
Knowing what renters insurance won’t cover will help you make any necessary adjustments, including taking out additional policies, increasing your coverage limits, or saving money for a rainy day.
Animals: Renters insurance explicitly doesn’t cover the cost to replace animals.
Roommates: If you live with roommates and plan to take out renters’ insurance, encourage them to take out policies for themselves so you can all be covered to the fullest extent.
Flooding or earthquakes: While renters insurance covers damage caused by fire, lightning, wind, and hail, not every natural disaster is covered. If your rental house or apartment floods, or is damaged by an earthquake, insurance will not cover the losses.
It’s important to note a distinction in the case of a storm or hurricane that leads to flooding. Water damage may be covered if it’s due to a window breaking or the roof blowing off and water entering the residence. If the water contacts the ground before reaching your home — as with a flood or storm surge — any resulting damage is excluded from coverage.
If the flooding triggers a fire or explosion or your home is looted after you evacuate, you may be covered for your losses, but damage caused by floodwater is not included as a covered peril.
Renters Insurance Cost
Data from the National Association of Insurance Commissioners (NAIC) shows that the national average cost of renters insurance is a mere $180 annually. That comes down to $15 a month, which is likely less than you pay for, say, streaming video service for your home.
Insurance rates will vary according to the value you’re seeking to insure and the level of coverage you want, including your deductible size. Where you live is also a cost factor, including the prevailing local crime rate and whether inclement weather such as windstorms and fires are typical.
The five states where renters insurance is the most expensive are Mississippi, Oklahoma, Alabama, Louisiana, and Texas. But even in Mississippi, the state with the highest average premium, the average monthly cost is only $21.50.
Ways to Save on Renters Insurance
Even though renters insurance is more affordable compared to many other types of insurance, it’s still worthwhile to consider ways you can reduce your premium; after all, even small savings can add up over a year or more.
1..) Shop around and request online quotes
One of the most effective ways to save is simply to shop around and request online quotes, as premiums can vary considerably among companies. As you do so, make sure to research companies from which you already hold insurance policies of other types, such as car insurance.
2..) Bundle your policies
Most companies offer a discount when you purchase (or “bundle,” as the industry calls it) two or more policies. Bundling your insurance also allows you the convenience, if you wish, to pay both bills at once and to consolidate your claims under one account.
3..) Ask about discounts
Insurance companies also offer several discounts. For example, you can reduce your premium by having safety devices installed around your home. Some companies will discount your premium after a certain time has elapsed without you filing for a claim. Rate reductions may also be available for signing up for automatic debit or paying your policy annually instead of monthly.
4..) Choose a higher deductible
Finally, you can save by choosing a higher deductible. Some companies offer personal property deductibles of as low as $250, but a small deductible will make your premium higher than opting for more typical amounts of $500 or $1,000.
Frequently Asked Questions about Renters Insurance
What is renters insurance?
Renters insurance — otherwise known as an HO-4 policy — is an insurance policy that protects a renter’s personal belongings against perils without coverage for the residence itself. In case of loss, renters insurance will cover your items’ actual-cash-value or replace them at their current value.
What does the average renters insurance claim cost?
According to the Insurance Information Institute, the average renters insurance claim for fire and lightning is $79,785. For bodily injury and property damage, it’s $26,872. For property damage caused by water damage and freezing, it’s $10,849, and for theft, the average claim is $4,391.
Is renters insurance worth it?
Depending on the value of your personal belongings, renters insurance could be a vital financial safety net. If you own professional equipment such as cameras, computers, or other high-value electronics, a renters insurance policy can protect your investments from vandalism, theft, fires, and power surges. Another plus is that renters insurance will cover your belongings inside or outside the apartment, including items stolen from your car.
How much is renters insurance?
According to the National Association of Insurance Commissioners (NAIC), a renters insurance policy typically costs from $15 to $30 a month, depending on such factors as your location and the value of your belongings.
Does my landlord’s policy cover my belongings?
No, your landlord’s insurance won’t cover your belongings, only the actual dwelling or primary structure, other structures like tool sheds and garages, and any maintenance equipment (lawnmowers, leaf blowers, etc.) that the landlord may store on the property.
Why does my landlord require me to get renters insurance?
Renters insurance is not required by law. However, in most states, it is legal for your landlord to require you to have renters insurance as part of your lease or rental agreement. Having a renters insurance policy could be beneficial for your landlord, as it lowers their liability if one of your guests is injured on the property. You may want to speak with your landlord to see if you can negotiate a discount on your rent payments in exchange for having a renters insurance policy.
How do I pick the right renters insurance company?
A relatively low premium cost will likely be a critical factor in choosing a renters insurance company, but other considerations should also come into play:
Check the company’s financial stability to make sure it will be able to pay your claims.
Check scores and rankings for customer satisfaction with renters insurance, based on surveys from organizations such as J.D. Power.
Speak with an independent insurance agent or broker, one that sells policies from multiple companies. They can reliably compare the pros and cons of several potential insurers for you.
Finally, don’t discount word of mouth. Ask your circle of friends or relatives who they’re insured with and about their satisfaction with the company, including any claims experiences they might have had.
How we found the best renters insurance companies
We looked for the best renters insurance companies in the country by first examining customer satisfaction scores in J.D. Power’s 2020 U.S. Property Claims Satisfaction Study and each company’s financial strength as determined by insurance credit rating agency A.M. Best.
A high financial stability rating means the company has a higher likelihood of paying out claims and is less likely to declare bankruptcy in the foreseeable future. We eliminated companies with ratings below A+.
We also considered the complaint index data for property insurance policies, as compiled by the National Association of Insurance Commissioners (NAIC).
Summary of the Best Renters Insurance Companies of 2021
Erie Insurance: Best Renters Insurance for Comprehensive Coverage
Nationwide : Best Renters Insurance for Optional Add-Ons
Amica Mutual : Best Renters Insurance for Customer Experience
All State : Best Renters Insurance for Retirees
Auto Owners : Best Renters Insurance for Those Living Abroad
State Farm : Renters Insurance Company with the Largest Market Share
Lemonade : Most Innovative Renters Insurance Provider
Young Alfred : Best for Online Quotes from Top Providers
© Copyright 2020 Ad Practitioners, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.
