Just because you’re renting doesn’t mean you should skip out on insurance to protect your home. Home insurance isn’t just for homeowners; there are widely available insurance options out there that protect the property you’re renting. Rental insurance is important to be sure your personal assets are covered in case of theft or damage, since these won’t be covered under your landlord’s policy.
Rental insurance is important, but only about 40 percent of renters actually purchase this type of policy. Yet in many cases, it won’t cost you much out of pocket to insure your property. There are plenty of renters insurance policies that won’t cost more than a few dollars a day.
How do you choose renters insurance?
This answer will vary from person to person, but we can help narrow down the options for you. Lots of insurance companies offer rental insurance, but not all insurance policies offer the same coverage and benefits. Let’s take a look at the best renters insurance companies of 2019 and who they are best suited to insure.
The best renters insurance companies of 2019
Erie Insurance: Best overall
Erie Insurance is J.D. Power’s pick for the top insurance company overall, and their customers love them too. That stellar reputation is built on several factors: affordable rates, excellent customer satisfaction and an easy-to-navigate claims service. They’re known for offering significant discounts on bundles and their policies offer guaranteed replacement cost for personal property, 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.
- Ranked #1 by the J.D. Power Home Insurance Study, given a 5 out of 5 star rating for overall satisfaction
- Rated A+ by AM Best
- Rated A+ by the Better Business Bureau
Metlife: Best customer service
Renters like Metlife 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 that wouldn’t normally be covered under your policy. Metlife’s renters insurance also protects against a wide array of natural disasters including tornadoes, hail and fire, as well as theft and vandalism. As a bonus, their monthly premiums are often less than $15, even less than a dollar a day.
- Rated A+ by AM Best
- Rated A+ by the BBB
State Farm: Nation-wide availability
State Farm offers renter’s insurance coverage in almost every geographic region of the U.S., which makes it a great option for renters in rural areas or areas that are underserved by other companies. But it’s not just State Farm’s wide availability that makes it a good option; this company also has solid ratings from companies like J.D. Power and AM Best, which make it a safe bet for your rental policy.
- Ranked about average by J.D. Power
- Rated A++ by AM Best
Allstate and Liberty Mutual: Biggest discounts is tied between: Allstate and Liberty Mutual
If you’re looking for discounts on your renters insurance, Allstate and Liberty Mutual are your best bets. Allstate offers a ton of discounts for things like multiple policies, safe homes and seniors, and you may even be rewarded for having a claim-free policy with a discount of up to 20 percent on your rental insurance premium. They also offer a wide variety of coverage along with those discounts, including high-end items and coverage for sewage and water backup, which is not the norm. Allstate is ranked:
Liberty Mutual is also known for offering steep discounts on rental insurance, including a military discount, a discount for being claim-free and a discount for renewing your policy before it expires.
Liberty Mutual is ranked:
- Rated A by AM Best
- Rated A- by the BBB
American Family Insurance: Least expensive
American Family Insurance may not be the first company you think of for renters insurance, but perhaps it should be, especially if you’re looking to save. They’re known for saving their customers money with well below average premiums, and you won’t be compromising your coverage to save. American Family renter’s policies include coverage for things like electronics and firearms, and they have excellent policies to protect you against mold damage and identity theft.
Travelers Insurance Company: Best for living expenses coverage
Travelers Insurance Company offers some of the best living expenses coverage on the market, and it covers things like hotels, meals and even laundry. You never know when you may need to find a temporary place to live, and it’s best to be prepared in case that happens.
- Rated A++ by AM Best
- Rated A+ by the BBB
USAA: Best for military members or families
USAA has a stellar reputation among consumers and the insurance industry, and they offer some of the better renters insurance policies out there, but you can only get coverage from USAA if you’re a current or former member of the military or their families. If you can find a way to become a member of USAA, you and your renters insurance policy, will be better off for it.
- J.D. Power did not rank USAA, likely due to it being limited to military members, but they did give this company the designation of being “among the best.”
- Rated A++ by AM Best
- Rated B- by the BBB
What does renters insurance cover?
Before we get into the nitty gritty, let’s take a look at what renters insurance really is. Renters insurance is also known as home and contents insurance, and it’s meant to cover your belongings in case of theft or damage, and cover your pocketbook in case of injuries that occur in or on your rental property.
Renters insurance typically covers:
- Loss of property from burglaries
- Financial reimbursement for lost property in cases of fire and vandalism or other natural disasters
- Losses of property that occur while traveling or in your car (for example, it may cover your stolen laptop if your car is broken into)
- Medical bills for injuries that occur on your rental property
- Lawyers fees or settlements in case of injury that happens on your rental property
- Compensation for hotels or other living arrangements in case your rental can’t be lived in after storm or fire damage
Your specific policy may not cover all of these things, though. These are just the standard items that are covered under a typical renters policy. What your policy covers will depend on the type of loss and the amount of coverage you have in place. As with any other type of insurance, what renters insurance actually covers can vary from policy to policy, which is why it’s important to make sure you’re choosing the best policy for your needs.
How much will it cost me?
It won’t cost you much to buy a renters insurance policy. On average, you can expect to pay somewhere between $100 and $250 per year, but as with anything else, the actual amount of your policy will depend, in part, on where you live and the type of coverage you want. Chances are good, though, that it will be somewhere within that range, considering that the national average for renters insurance is about $12 per month, according to the Independent Insurance Agents and Brokers of America.
Is renters insurance required?
We know what you’re thinking: “OK, so we know it won’t cost me much, but do I have to have renters insurance?” The short answer is no, probably not. There are certainly landlords who will require you to have it in your lease, but there are no laws requiring renters to have this type of insurance. The reason some landlords will require you to have renters insurance is because it helps protect the landlord’s investment, too. If they have a policy on the property and you have a policy on the property, chances are good that everyone will be safe from major financial losses that occur on the property. But even if your landlord doesn’t require renters insurance, it’s a good idea to purchase it.
Renters insurance covers protection for your personal property, and this type of insurance will also keep you from having to shell out large amounts of money to attorneys or on judgments in case you’re sued for an injury that happened at your home. If something like that does occur, your renters insurance is probably going to be the one covering the attorney bills, settlements and judgments related to that lawsuit.
Who needs renters insurance?
It’s probably not a requirement that you have renters insurance, but should you? If you rent, yes, you probably should. That includes:
- College students living in dorms who are not covered under their parents’ homeowners policy
- College students living off campus in a house or apartment rental
- Renters in high-crime areas
- Pet owners
- Seniors renting in an assisted living rental
- Renters in disaster-prone areas
- Tenants in most types of rental housing