If you are a renter, your belongings and liability exposure are generally not covered by your property owner’s policy. For example, if a fire were to occur at a place you are renting, a landlord policy would likely cover damage to the structure itself. However, it would not cover for you to replace your items or temporarily stay elsewhere during the repairs. To help make you whole again after a covered claim, it is worth considering getting a renters insurance policy.
The cost of renters insurance is about $509 per year in the U.S., and several insurance companies offer this type of coverage. But not all renters insurance policies provide the same coverage and benefits. Let’s take a look at the best renters insurance companies of 2021.
Why renters insurance is important
Renters insurance is relatively inexpensive at around $42 per month, but its value can significantly outweigh its monthly cost in the event of a claim.
In addition to replacing your personal belongings, renters insurance also offers coverage for incidents that affect your guests. Perhaps you have a friend over with a young child, and the child slips, sustaining an injury. In this case, renters insurance would help pay for the medical costs of the injured guest. If the injury results in a legal situation, renters insurance would also help pay legal fees. Coverage for relocation and food is also commonly offered by insurers if your rental becomes temporarily inhabitable due to a covered claim.
Add-ons are generally available for your renters insurance policy, as well, to help provide more robust coverage for your needs. For example, if you need extra coverage for your jewelry or other high-value items, you may be able to add additional coverage on top of your standard renters coverage.
The best renters insurance companies overview
Bankrate has researched more than a hundred companies offering renters insurance policies to narrow down some of the best renters insurance companies of 2021. The following companies have all been selected based on positive customer satisfaction ratings by J.D. Power, a leading third-party source for industry research, and have received “Excellent” or “Superior” credit ratings from AM Best. In addition to affordable rates (as determined from Quadrant Information Services), the companies below either include additional protections or offer them as add-ons for your renters policy, such as pet insurance, flood coverage and more.
|Company||Average monthly cost||J.D. Power rating||AM Best rating|
|State Farm||$22||836/1000||A (Excellent)|
|Liberty Mutual||No rates available||825/1000||A (Excellent)|
|American Family||$54||840/1000||A (Excellent)|
*USAA is only for active-duty military, veterans and their family members. Because of its membership restrictions, USAA is not considered rank-eligible by J.D. Power.
Erie Insurance has a stellar reputation that is built upon several factors: affordable rates, excellent customer satisfaction and an easy-to-navigate claims service. Erie offers significant discounts on bundles, additional living expenses if you need to find a temporary place to live and the option for extra coverage for things like identity recovery and your more expensive personal items.
Unfortunately, Erie only offers renters insurance in roughly a fifth of the U.S. but can be an excellent choice if you live in one of the areas it services. States covered are Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin. Erie also offers coverage in Washington, D.C.
Renters like MetLife (now a part of the Farmers Insurance Group) because it offers excellent customer service that can help you tailor your renters policy to your needs, including the option to insure expensive luxury items. Somewhat rare in the industry, MetLife’s renters insurance policies automatically come with identity protection in many states.
MetLife’s renters insurance also protects against a wide array of natural disasters, including tornadoes, hail and fire, as well as theft and vandalism. Payments and claims can also be made on flexible schedules. Contact a MetLife agent to learn more about your options.
State Farm offers renters insurance coverage in every state throughout the U.S., which makes it a great option for renters in rural areas or areas that other companies underserve. But it’s not just State Farm’s wide availability that may make it a good option; this company also has exceptional ratings from companies like J.D. Power and AM Best, which could make it a safe bet for your renters policy.
The basic renters insurance policy covers personal property, liability and loss of use, as well as medical expenses or guests’ property damage. State Farm also offers discounts for having multiple policies and home alert protection. If the basic policy isn’t enough, the provider has additional coverage options for business liability, earthquake damage and identity restoration.
Allstate ranks above-average according to J.D. Power studies for renters insurance customer satisfaction and is one of the largest insurers in the nation. In addition to receiving coverage from a household-name insurer, add-ons for increased limits for items such as business property and additional policies, such as a personal umbrella policy, are available to renters.
For those seeking savings, Allstate offers a great selection of renters insurance discounts that could have a significant impact on your monthly premium. Several of its available discounts range in policy savings from 15-25%. For example, you could save up to 15% for having safety equipment like security alarms installed or save up to 25% if you are retired and at least 55 years old. If you think you might qualify for multiple discounts, Allstate offers a total of 5 that could potentially net significant savings overall.
Similar to Allstate, Liberty Mutual offers a range of valuable discounts for renters, including discounts for being claims-free, having automatic payments set up and buying a Liberty Mutual insurance policy ahead of your current policy’s end date. But renters may also be impressed with Liberty Mutual’s options for extended coverage.
Liberty Mutual’s standard policy provides coverage for the actual cash value of your personal property, but this may not be enough to cover the full cost to replace your items. In these cases, replacement coverage can be added ahead of time so depreciation won’t be factored into your claim payout amount. You could also opt for coverage for damage to personal property occurring within 15 days of an earthquake.
American Family Insurance is more commonly known for renters insurance but provides many of the traditional and even non-standard coverages a renter may be looking to protect their belongings better. You may also qualify for discounts for fire-protected and burglary-protected rentals, which could bring down your overall policy costs.
American Family renters policies are customizable, with numerous add-on coverage options, including identity theft coverage, travel protection and home-based business coverage, on top of the three traditional coverages: personal property, personal liability and loss of use.
Even without owning the property, many renters like to make their spaces feel like home with home improvements. In addition to standard renters protections for your items and liability, Travelers offers an option to apply up to 10% of your personal property coverage to improvements and alterations, whether they are made by choice or because of a covered loss.
And because you never know when an unexpected loss might affect you, Travelers renters insurance offers over 160 years of insurance experience to help you through your claim. But if you are fortunate enough to go an extended amount of time without making a claim, there is a discount available for being loss-free. Speak to an agent to learn more about the specifications to qualify for this discount.
USAA has a stellar reputation among consumers and the insurance industry, and it offers renters insurance policies particularly supportive for those in a military lifestyle, but you can only get coverage from USAA if you are a current or former member of the military or their families.
USAA offers a more robust basic renters insurance policy than many of its competitors. The basic policy includes coverage for personal property, personal liability, medical payments and additional living expenses. Flood insurance is also included in standard USAA renters insurance policies, which is notable considering that flood insurance typically has to be purchased separately. If you are eligible to become a member of USAA, you and your renters insurance policy may be better off for it.
How to compare renters insurance companies
Finding the best renters insurance policy will depend largely on your particular living situation and coverage preferences. If you live by yourself, you may have more items to insure, which may require more coverage; if you have roommates, you may not have as many belongings and may require less coverage. Depending on your coverage needs, you may want to look for a provider who offers more favorable rates or coverage options.
If you run a business or keep business-related items in your home, you may find that an add-on for extended coverage or business personal property is necessary. This may cause you to look for a provider which specializes in renters insurance for business personal property.
Each factor relevant to you should be considered carefully before deciding on a company. Losses can happen at any time, and without planning accordingly based on your circumstances, you may find yourself without enough coverage for the things you care about most.
What does renters insurance cover?
Renters insurance typically covers damage to your personal items, additional living expenses and situations where a guest is injured. These things are generally not covered by your landlord’s insurance policy. Similar to homeowners insurance policies, covered perils generally include fire, theft, falling objects, items stored outside of your rental and medical coverage for guests.
- Personal property: Coverage for your personal property is not included in your landlord’s insurance for rentals. Purchasing renters insurance allows you to protect items like your laptop, clothing and furniture. Even if your personal property is stored away from your rental, coverage generally extends up to a certain limit to anywhere your personal property is kept.
- Living expenses: If your rental becomes uninhabitable due to a covered loss like a fire, renters insurance helps cover the resulting costs from having to stay outside your home while it is being repaired. This could include fees for hotels, food and other necessary costs.
- Medical payments and liability: If a guest gets injured within your rental property, guest medical protection is available to help pay for potential medical bills resulting from the accident, regardless of fault. If fault is placed and a guest issues a lawsuit for the injury, liability protection also serves to help with legal fees, medical expenses, payments for pain and suffering and lost wages.
Depending on the common risks where you live, you may want to consider add-ons and additional coverage options where available. You may choose to add earthquake coverage if you live in a state more prone to those damages, for example. Other factors to consider when choosing a policy are the replacement cost of your most valuable items.
What to consider when choosing a renters insurance policy
Like any insurance policy, renters insurance is not one size fits all. No two rental circumstances are the same, and neither will the insurance for them be. If you do not have many personal belongings to insure, having a lower coverage amount may prove to be enough for your property. On the other hand, someone with higher value items like expensive jewelry, electronics and furniture may need to consider item replacement value and adding endorsements to their renters insurance policy.
If you already have an auto insurance policy, you could potentially offset higher premiums by purchasing renters insurance through the same provider for a multi-policy discount. In some cases, you may even end up saving more money than the initial renters policy cost you.
There are also special considerations to make if your roommate is a pet. While some policies may offer coverage options for pets, not all do. For example, if you have a furry companion, you may want to look into companies that offer coverage for your pet. However, you will want to check with insurance carriers to see if your companion is on the excluded breed list.
Frequently asked questions
What is a reasonable price for renters insurance?
Renters insurance is remarkably affordable when compared to other types of insurance. Prices will vary based on where you live, how much personal property coverage you buy and the deductible you choose for your policy. Generally, the average cost of renters insurance is about $509 a year or $42 a month.
Should I select the cheapest renters insurance available?
Choosing the cheapest renters insurance without looking into what it covers could mean being left paying out of pocket should a claim occur. Shopping around and comparing renters insurance can help you find the most affordable price with the right coverage for you. You should always make sure you understand everything covered in your policy by reviewing your policy’s documents and speaking to a licensed agent.
Does renters insurance cover my roommate?
Some insurance carriers may allow roommates to share a renters insurance policy. However, in general, each resident typically needs their own policy because roommates do not have an insurable interest in each other’s belongings. The exception to this would be spouses or other family members who reside under the same roof.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female renters with a clean claim history, good credit and the following coverage limits:
- Coverage C, Personal Property: $25,000
- Coverage D, Loss of Use: $5,000
- Coverage E, Liability: $100,000
- Coverage F, Medical Payments: $1,000
The renters also have a $500 deductible.
These are sample rates and should be used for comparative purposes only. Your quotes will differ.