The Best Renters Insurance for 2020
Renters insurance is so affordable, not having it is a huge financial risk. While your landlord’s home insurance may cover damages to the structure you live in, it won’t cover any of your belongings. Renters insurance costs an average of $180 a year, making it an incredibly affordable policy. To find the best renters insurance in 2020, we used our proprietary scoring system, the SimpleScore, to compare coverage options, customer support, customer satisfaction, discounts and accessibility for every major provider.
The best renters insurance companies for 2020
- Best for online tools: Allstate
- Best for extended coverages: Nationwide
- Best for discounts: Liberty Mutual
- Best for competitive rates: American Family
- Best renters insurance for policy management: State Farm
- Best for customer support: MetLife
- Best renters insurance for military members and families: USAA
|Companies||Compare Coverage Options||Average Monthly Cost||SimpleScore|
|Allstate||Flood insurance, personal umbrella, personal property, reimbursed living expenses, liability, identity theft, guest medical||$15||4.2|
|Nationwide||High-value items, theft extension, water backup, earthquake||$20||3.8|
|Liberty Mutual||Personal property replacement, blanket jewelry, earthquake damage||As low as $5||4|
|American Family||Identity theft, pet insurance, travel protection, home-based business||Not disclosed||4.8|
|State Farm||Additional liability, identity theft, earthquake damage, business property, incidentally business||Not disclosed||4.2|
|MetLife||Identity theft, luxury items||Not disclosed||2.25|
|USAA||Computer coverage, valuable personal property,||As low as $10||3.8|
Compare the pros and cons of our top picks
|Allstate||Good mobile and online experience||Rates may be higher than other providers|
|Nationwide||Offers wide range of coverage options||Customer satisfaction rankings are low|
|Liberty Mutual||Offers a lot of discounts to keep rates low||Coverage doesn’t include water damage|
|American Family||Good discounts, wide array of coverage||Coverage limited to 19 states|
|State Farm||National coverage, great online/app experience||Rates may be higher than other providers|
|MetLife||Strong customer service||No online access available|
|USAA||Highly rated customer service|
Very low rates
|Only available to active and retired military members and their families|
What is renters insurance?
Renters insurance protects your valuables and any damages to your rented home that would be your responsibility (and not the landlord’s.) Often, your landlord’s home insurance policy doesn’t include coverage for your personal property. It may cover the building and its grounds, but it won’t replace your vinyl collection if your neighbor’s pipes burst and flood your living room. Renters insurance also pays to replace your belongings if they are stolen. In addition, renters insurance can pay the expenses of someone injured in your home and you are found responsible. Also, if you are unable to live in your home due to damages, renters insurance can help pay for a hotel stay.
How renters insurance works
Renters insurance protects your personal belongings from theft or damage during a burglary as well as damage incurred due to fire, water or other unforeseen events. To purchase a renters insurance policy, start by creating a home inventory of everything you own and might want coverage for. Then determine the value of that collection and how much coverage you might need. Renter insurance companies will use that information along with your personal information — name, address, birthdate, number of people living in the home, date you want coverage to start — to build a policy with the right amount of renters insurance coverage. After you’ve decided on a policy, you’ll pay a monthly or yearly premium for that coverage. If anything happens to your belongings or home, you’ll file a renters insurance claim and (hopefully) be reimbursed to replace the damaged or stolen items.
Some of the specific incidents that renters insurance will cover include: fire and lightning, windstorm, explosions, riots, damage by vehicle (not your own), smoke, vandalism, theft, volcanic eruption and falling objects.
Types of rental insurance coverage
All of the best renters insurance carriers provide access to four types of basic renters insurance coverage:
- Personal property coverage: This renters insurance coverage protects the items in your dwelling like your clothes, computer, appliances and furniture
- Liability coverage: Liability renters insurance coverage helps pay for the cost of lawsuits and your defense if you or someone in your household is involved in an accident or incident that harms others or causes property damage. It also pays for damages you cause to someone else’s property.
- Medical payments to others: This renters insurance coverage pays a guest’s medical costs if they’re injured while visiting you in your home
- Additional living expenses/loss of use: This renters insurance coverage pays for your expenses to live elsewhere if your home becomes uninhabitable due to a covered peril or loss
There are additional coverage options to add like pet insurance, flood insurance, earthquake protection, identity theft and luxury items coverage that vary by insurer.
Renters insurance reimbursement forms
What is actual cash value vs. replacement cost?
When you shop for a renters insurance policy, your renter insurance company or agent will ask if you want an actual cash value or replacement cost policy. The answer to this question determines how much you will pay for your renters insurance policy as well as how you will be compensated in the event you file a renters insurance claim for losses related to your personal belongings. It’s important to evaluate which option works best for you before purchasing your renters insurance policy. The key characteristics of these two types of reimbursement plans for your renters insurance policy are:
- Actual cash value: With this type of policy, your possessions are covered but not at the cost you purchased them. Depreciation is taken into account, meaning your property’s age and condition are considered when determining the amount your provider will give you. Actual cash value can save you money month-to-month on your renters insurance premium. It’s also a good option if the items you want to insure are relatively new because they will not have depreciated that much.
- Replacement cost: With this option, it doesn’t matter how old the item is or what its condition was at the time it was damaged. The cost to replace your item is paid to you in full. This type of coverage is a great option if you have a lot of aged, yet valuable property. The downside is that a replacement cost policy is more expensive than an actual cash value policy.
If you don’t have that many high-value items, an actual cash value would probably suffice, but review your policy limits before deciding. Estimate what it would cost to replace everything you own in the event of a catastrophic event. If partial coverage would leave you with a lot of out of pocket expenses, it may be worth choosing replacement cost.
How to choose the best renters insurance for you
- Start shopping around for quotes. It’s really easy to head to the website of companies offering renters insurance coverage and fill out some simple information about your dwelling to get a quote. Save those quotes and compare them, which ones offer the most coverage at an affordable price?
- Check out discounts. The more discounts you can get, the better. Find out which renters insurance policies offer discounts that you can easily attain. If you have a security system in place already, a renters insurance company might give you an extra discount for that.
- Filing a claim. How easy is it to file a claim with the insurer? If you’re expected to jump through hoops just to get a check to cover damages, then it might not be best to choose that renters insurance company. Some policies have easy mobile app access that can make filing a claim simple — that’s probably what you need during high-stress disasters and situations.
- Coverage. To ensure that your property is insured, make sure that the renters insurance company offers coverage that will protect all of your belongings, especially the ones that are particularly important to you. Your plates and silverware may not be important, but your prized guitar, gaming computer or family heirlooms are.
What’s not covered by renters insurance?
Your roommate’s belongings are not covered by renters insurance. Even though they live in the same dwelling, if something happened to both your things (like a fire or theft), only yours would be covered by your policy.
Most of the time flood and earthquake damage is not covered in the standard policy. There are often add-on options that might be a good idea if you live in a high-risk area. Furthermore, infestations by pests, rodents or bugs are viewed as a maintenance issue by your provider and won’t be covered by insurance.
Is renters insurance worth it?
For some people, it may be required by your landlord. If not, you’ll have to weigh the risks and your personal priorities. Renters insurance could be a good idea if you have a lot of valuables in your home you’d like to protect or live in an area more at risk for theft, fire or natural disasters. If your home is suddenly unlivable (like from flooding or a fire) and you don’t have anyone to stay with, some renters insurance policies will reimburse those displaced living expenses. Renters insurance is usually pretty affordable too, which makes the investment less daunting and the policy more valuable.
Like with most types of insurance, it’s a betting game on the likelihood that something will happen — you either pay into insurance monthly on the chance you experience a theft or disaster large enough to warrant a claim for reimbursement, or you risk having to replace things out of pocket. If you have an emergency fund saved up, it might be a better financial decision to use that than pay monthly for insurance.
Average cost of renters insurance
The average cost of renters insurance is $180 a year across the nation, according to the Insurance Information Institute. When you think about the amount of renters insurance coverage you get with it — like personal property protection and liability — it’s cheap insurance compared to other types. For example, homeowners insurance costs an average of $1,211 a year, auto insurance has an average cost of $944 a year and life insurance runs about $841 a year.
Though you may want to own a home one day, you can at least take comfort in the fact that you’re saving, on average, about $1,031 in insurance by renting. Depending on where you live, those savings could be even more.
What impacts rental insurance premiums?
A few things will influence your specific insurance premium. The amount of coverage is the biggest factor. The premium is basically a direct translation of the level of coverage you’ll be insured for.
The way you customize your policy can tweak your annual premium too. Repayment types for example — actual cash value will be a cheaper choice while replacement cost will lead to a higher premium. The deductible you choose changes the premium too. A higher deductible (the out of pocket responsibility before an insurance payout) will mean a lower premium and vice versa.
Location can also be a factor, as higher crime rates or natural disaster zones will raise policy costs.
How to file a renters insurance claim
If you need to file a renters insurance claim, start by informing your landlord of why you need to file a claim and what the claim will cover. This is particularly important if your claim is related to fire, water or other damage that occurred to the building and affected your belongings. You most likely will need to get any related police or fire reports, repair documents, or other documentation from the landlord to supplement your claim.
If your belongings were stolen or damaged during a break-in, you will need to file a police report. If your renters insurance claim is related to a guest’s injury, be sure to get their personal information, medical insurance information and copies of any medical reports and bills.
Call your renter insurance company or agent, and notify them of your forthcoming claim. They may request additional information you will need to file with your claim. They also can tell you how long you have to file a claim. Once you have all of your documentation in order, you can file your claim in person at the agent’s office, online on the renter insurance company website, by phone or using the renter insurance company’s app.
Compile a list of all belongings that were damaged or stolen and need to be replaced. Taking photos of damaged belongings also are helpful when filing your renters insurance claim.
We welcome your feedback on this article and would love to hear about your experience with the renters insurance companies we recommend. Contact us at firstname.lastname@example.org with comments or questions.