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We’ve talked about various types of insurance recently, and today I’d like to shed some light on renters insurance.
You might be thinking, “Renter’s insurance? Do I really need that?”
I get where you’re coming from. It may seem just like another monthly outgoing on your card that doesn’t give anything in return. Like throwing money down the drain, some would say.
Plus, shouldn’t your landlord already have insurance in place that covers your back? Isn’t that legally required?
Well, no – that’s a common misconception. Your landlord’s insurance doesn’t cover your belongings – and if those belongings got stolen, damaged, or anything else happened to them – you would have to replace them out of your own pocket.
In this article, I’ll tell you which companies have the best renters insurance and provide some very legit reasons to get it – and soon.
Nationally, the average premium of renters insurance annually is $180 according to an annual study from the National Association of Insurance Commissioners, but your actual cost will vary greatly depending on where you live.
Best Renters Insurance Companies
Here are the 11 best renters insurance companies in 2020:
- Lemonade: Best Overall
- Allstate: Best for Policy Bundles
- Liberty Mutual: Best for Claims Satisfaction
- State Farm: Best for Policy Discounts
- Nationwide: Best for Coverage Options Available
- Auto Club of Southern California Insurance Group: Best Ranked by J.D. Power
- American Family: Best for Competitive Rates
- USAA: Best for Military Families
- Toggle: Best for Business Owners
- Erie Insurance: Best for Customer Service
- Jetty: Best for Airbnb Hosts
Lemonade is a newbie compared to many other insurance providers – but it’s already receiving a lot of attention and praise. I think it’s an excellent choice for millennials because it takes a different approach than traditional insurance companies – and has plenty of unique features.
- Artificial intelligence. Lemonade uses AI to process claims, making the whole process much faster. It’s the future of insurance!
- Claim app/website. Not all insurers have customer-friendly apps and websites – but Lemonade’s is intuitive and easy.
- Quick claims processing. Not only can you easily make claims on their app or website, but it’s also super fast. According to the company’s website, in 2016, they set a new world record by processing a claim in 3 seconds.
- “Giveback” program. When buying a Lemonade policy, you select a non-profit you care about – and once a year, Lemonade will give back the unclaimed money for that cause. That’s pretty great, because not only are you insured – but you’re also contributing to the social good.
- Not available in all states. Lemonade isn’t available in Alabama, Delaware, Florida, and several other states.
- No auto insurance. Many companies offer discounts for bundling policies – but you won’t be able to do that with Lemonade.
Allstate is one of the most well-known names in the insurance world – but is mostly associated with their Allstate car insurance policies. However, they also offer renters insurance – and provide a great option if you want a one-stop company for all your insurance needs.
Pro Tip: Bundle renters insurance with your auto insurance for extra savings – something you can’t do with the other guys who only offer renters insurance.
- Digital Locker App. The app includes several useful features allowing you to manage your policy easily.
- Free estimation tools. You can quickly determine the level of coverage you need by using their estimation tools and calculators.
- Extended coverage. Have an expensive item that has especially high value? Allstate offers an extended coverage option, which means that you can make sure these types of belongings are protected.
- Green improvement. This is a cool extra coverage option that helps cover the additional cost of replacing your items with energy-efficient versions after a claim.
- Average customer satisfaction.
3. Liberty Mutual
Liberty Mutual has been around for over 100 years and is mostly known for its auto insurance. However, it also offers renters insurance, and bundling these policies could save you money.
- You can file a claim online. While many other insurance providers require you to file claims over the phone – you can choose to file a claim online with Liberty Mutual (or by phone – whatever you prefer!).
- Bundle discount. You can save money with Liberty Mutual if you bundle renters and auto insurance.
- Not the cheapest rates. Liberty Mutual may not offer the most affordable prices for renters insurance policies.
- Rates vary more than typical. Most insurance providers’ rates will vary based on location – but Liberty Mutual rates seem to fluctuate more than usual.
- Not the best overall rating. Liberty Mutual receives an average score in J.D. Power’s U.S. Home Insurance Study.
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4. State Farm
Another well-known name in the insurance world, State Farm offers all types of insurance – from auto to life insurance. The company also provides excellent renters insurance for those who want to protect their belongings but don’t own their home.
- Instant online quotes. No need to leave the comfort of your home – get a quick, free quote online by entering a few details.
- Customizable policies. You can easily tailor your policy to your needs – like increasing the amount of personal property you want coverage for or getting additional coverage to protect you in the event of identity theft or earthquake.
- Discounts. State Farm also offers several discounts worth making a mental note of – such as multi-policy discounts and home protection alerts. Home protection alerts allow you to save more if you have protection features in your rental – like a burglar alarm, smoke detectors, etc.
- Pocket Agent App. You can also access lots of information via the State Farm app, for example getting a quote or submitting a claim. It even has an ATM locator. Pretty handy!
- Competitive rates – but not the cheapest. Those looking for the most affordable renters insurance rates should know that the prices offered by some of the other insurance companies are more competitive.
Nationwide is excellent for accessibility – as well as affordable renters insurance rates. And, since it offers more than just insurance (there’s also investing, banking, and planning for retirement), it can be a good place to address a few areas of your finances.
- Online access. You can easily get your quote as well as apply for the policy online.
- Useful add-ons. Nationwide also offers add-ons like Water Backup (protects you against damage caused by backed-up drains or sewers) and Earthquake (which kicks in to cover a portion of your losses in the event of a volcano or earthquake).
- Various types of policies. Which is great if you’re looking for one company you could get all your insurance policies from.
- Financially strong company. Nationwide’s financial strength is “superior,” which means the insurer pays claims well.
- Customer satisfaction about average for home insurance. Based on the J.D. Power’s 2018 U.S. Home Insurance Study, Nationwide ranks as about average in customer satisfaction.
6. Auto Club of Southern California Insurance Group
Auto Club of Southern California Insurance Group was ranked best in J.D. Power’s 2018 U.S. Home Insurance Study – and has received highest ratings for overall satisfaction, policy, and price.
- Highly-rated provider. According to the findings of the survey (which surveyed 14,122 homeowners and renters), customers are happy with Auto Club of Southern California Insurance overall.
- Easy online quote. Getting a quote online is easy – you’ll enter some details, and voila!
- Customer Satisfaction. Customers also ranked the provider high in terms of the price of its policies, so you know you would be getting a good deal.
- Variety of policies. Since Auto Club of Southern California Insurance Group offers so many different types of policies, you can combine the product offerings and save as a result.
- Limited availability. Only available in Los Angeles, Imperial, Inyo, Kern, Orange, Riverside, Mono, San Diego, San Bernardino, San Luis Obispo, Tulare, Santa Barbara, and Ventura.
7. American Family Insurance
Established with an initial goal of insuring farmers, American Family Insurance is now one of the biggest insurance companies in the U.S. You may want to consider it for its lower-than-average premiums.
- Get a quote online. As with many other insurance providers, you can easily and quickly get a quote online.
- Affordable rates. If you’re looking for affordable renters insurance, American Family offers low prices compared to some other insurance providers.
- Discounts. On top of the affordable rates, you can also get several discounts. Examples include multiproduct (e.g., for bundling auto and renters), smart home (available to customers who use smart home tools that may help monitor break-ins), and discounts available to those who don’t make a claim for a certain period of time. Plus, there are others, like Payment, Loyalty, and Generational.
- Offers Pet Insurance. If your pet is hurt as a result of a covered loss, American Family will pay for veterinary costs and final expenses.
- Average insurance claims satisfaction. According to the 2018 J.D. Power study, the claims satisfaction was about average.
8. USAA Renters Insurance
USAA Insurance is available for active, retired, enlisted and honorably separated personnel of the U.S. military. The adult children of military veterans are also eligible, as long as that parent was a member and insurance policyholder with USAA.
The standard policy offered by USAA has several features that many policies don’t include without having to pay extra. For example, flood and earthquake coverage comes with its standard policy, which is not the case with most competitors.
- More Coverage. USAA policies cover earthquake, flood, fire, and even volcanic eruptions as part of a standard policy.
- You can move, pack, or store your belongings. Your things are covered, regardless of where they are (that includes your car).
- Limited Availability. USAA renters insurance is only available for U.S. Military and their families.
9. Toggle Renters Insurance
Toggle claims to have “hit the refresh button on renters insurance” – and it’s hard to argue with that. It offers some competitive features like making instant changes online to your coverage and “Side Hustle” coverage, which helps you protect your side businesses.
- Great online functionality. You can easily make changes to your insurance policy online – whether you’re moving into a new address, or want to add new items.
- Years of experience. Toggle is a member of the Farmers Insurance family, meaning it draws on over 90 years of experience.
- Wide variety of policies to choose from. With Toggle, you can get plenty of different types of insurance policies – from “Pet Parent” for your furry baby to “Side Hustle” coverage, helping you protect that weekend passion of yours.
- Limited availability. Currently, Toggle is only in 23 states, including Illinois, Wisconsin, Colorado, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, Utah, Virginia, Arizona, Oregon, Arkansas, Oklahoma, Pennsylvania, Tennessee, Michigan, Texas, Mississippi, Louisiana, South Carolina, and Kentucky. But they have plans to be in 75% of the states by mid-October, so they are expanding rapidly.
10. Erie Renters Insurance: Best for Customer Service
Erie Insurance ranked second highest in the Home Insurance Study with a five-star rating for overall satisfaction, as well as price.
- Competitive pricing. Erie gets high marks for affordability, which is excellent news if you’re looking for cheap renters insurance.
- Good customer service. Erie also receives a good rating for its customer service.
- Offers various types of insurance. If you’re also looking to get auto insurance, you could take out both policies at Erie and get a multi-policy discount.
- No extras or add-ons. If you’re looking to add extras like additional coverage for valuables or extra protection for your pet – you should probably look elsewhere.
- Limited geographic availability. Erie insurance operates in a limited area of twelve states in the mid-Atlantic and midwestern U.S. and the District of Columbia, so if you don’t live in any of these – you’re out of luck.
- Limited online claims. Most claims need to be made via the Erie claims hotline or directly with an agent.
Jetty Insurance is another great option for millennials – and, similar to Lemonade, it is a very new company. Founded in 2015, Jetty Insurance is an advanced and highly-rated company offering modern coverage options.
- Great for Airbnb hosts. Do you rent your home via Airbnb? Jetty offers Airbnb host protection called Airbnb Host Theft Protection, which expands your renter’s coverage to include Airbnb guests.
- Excellent online features. With an easy sign-up process and a user-friendly website, Jetty is perfect for someone who wants to get things done quickly, efficiently, and without having to say a word!
- Available nearly nationwide. Another great thing about Jetty is that it’s widely available – you can access it in 46 states.
- Limited discounts. Jetty isn’t the best for discounts – but their insurance rates are very competitive.
- Can’t file a claim online. Surprisingly for such a tech-advanced company, you can’t claim online with Jetty – it has to be done over the phone.
Other Renters Insurance Companies
These companies did not make our top list of best renters insurance, but it doesn’t hurt to do in-depth research on all companies before you chose your policy:
Renters Insurance by City
Or, to learn more about renters insurance by city, check out the following articles:
Why Do I Need Renters Insurance?
Now more than ever, Millennials prefer renting to buying. I came across an article in Forbes the other day, which said we live in a society where we can have it all, but own none of it – a “Rentership society.” That’s because we now place more importance on experiences rather than things – and no longer need to own a house to feel like we’ve achieved something.
But whatever your reasons for renting over buying a home might be – the fact is that, if you’re renting, you need renters insurance. Let me tell you why.
- Not having renters insurance is a gamble. If you happen to be robbed or your house bursts into flames, the cost of replacing everything you’d lost will quickly add up. You could be out thousands of dollars – just because you didn’t have an insurance policy.
- Can you trust your next-door neighbor? You may think, “I’m so responsible – I don’t think anything would ever happen.” But if you live in a block of flats, it’s not just your actions that matter. And your next-door neighbor might not be as responsible as you are. It only takes leaving an appliance on, a candle burning, or carelessly tossing a cigarette to leave you with no belongings, homeless, and in a lot of debt.
- It’s affordable. Renters insurance is not as pricey as you might expect it to be – there are plenty of affordable options. The average cost of renter’s insurance is only about $15/mo. Lemonade even has plans starting at just $5/mo.
- It’s easy to get insured. Nope – you won’t have to move mountains to get renters insurance; quite the opposite, the whole process can be quick and easy.
Consider adding some financial security to your everyday life, whether you’re excited to be moving into a new apartment, or have been renting for a while.
Also, bear in mind that some landlords will require you to get renters insurance – and that’ll be written into your contract. But even if you’re not required to get it, I’d strongly recommend to take the initiative and get it anyway – for you, not anyone else.
Types of Coverage
Here are the basic types of coverage offered by the best renters insurance providers:
Personal Property Coverage
Personal Property Coverage includes coverage for everyday items, like your appliances, clothing, furniture, and specialty items like musical equipment and jewelry. If your items cost a pretty penny, you’ll need to add extended coverage.
Medical Payments to Others
If a house guest gets injured at your rented home, this will cover their medical costs, whether you are liable or not. Medical payment includes things like doctor’s fees, x-rays, and hospital stays. Bear in mind that this only covers the medical costs of your guests – so it wouldn’t apply to you or any other members of your household.
Liability coverage includes protection when you are legally liable for property damage or bodily injury that occurred as a result of an incident or accident involving you (or another member of your household).
Additional Living Expenses/ Loss of Use
If you are temporarily displaced as a result of the damage to your apartment, this will cover the additional living expenses. These expenses may include hotels and even restaurants, depending on the policy.
How to Apply For Renters Insurance
The good news is that applying for renters insurance is a relatively simple process – and you won’t need much. Typically, you’ll start by filling out a form online with your name, address, phone number, and often Social Security Number.
Other questions on the form may include whether you have any pets, roommates, and characteristics of the unit (smoke detectors, burglar alarms, etc.).
If you have a dog, it’s worth noting that while most dog breeds are covered by renters insurance, breeds like Chow Chow, Akitas, Doberman Pinschers, German Shepherds, and Staffordshire Terriers, aren’t.
No matter how much you want an affordable renters insurance policy, make sure you’re truthful in your application. That’s because if you’ve lied and made a claim – your claim could be denied, and you could be sued for fraud. It’s no game.
What’s the Best Rental Insurance for Your Needs?
So, there you have it. While renters insurance may not be something many think of as a must, not having it is quite a gamble and means you’re not financially protected should anything go wrong.
For example, if your precious items – your laptop, TV, record player, that camera you saved so long for and absolutely love – got stolen, without renters insurance, you’d have to replace all of them out of your pocket – or make do without them. If you’re broke, you may even have to forget you ever owned them. Scary, right?
That’s why renters insurance is a necessary element of your overall financial fitness.
I hope that this list of best renters insurance companies has helped you get a better idea of what the companies out there are offering, and which may provide the type of coverage you want.
And now – are you unsure whether to rent or buy? Check out my post Rent or Buy? How I made $350,000 In 4 Years.
You may also want to learn about how buying a home can help you reach financial freedom in 3 Best Ways to Buy a Home in 2020.