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Best Renters Insurance

Benzinga narrowed the field and identified the top six companies for best renters insurance. We'll take the guesswork out of what each company's basic policy covers and if there are additional coverages you could add on to your policy.

Many research companies rate insurance carriers. They base their findings on customer service experience, the company’s financial state, and their ability to pay a claim quickly and efficiently. The big three are J.D. Power, A.M. Best, and Standard and Poor. Each has their own method of how they look at the strengths and weaknesses of an insurance company. Renters’ insurance is no different. It is a branch of the overall company tree and is reviewed in the same fashion as the other insurances they provide.

Taking these ratings into account, as well as customer reviews we have narrowed the field down the five companies that ranked the best renter’s insurance companies. We will go over each one and provide you with the information on what their basic renter’s policy covers, the premium you would expect to pay, and what and if there are additional coverages you could add-on to your policy to help you gain a greater level of coverage.

What is renters' insurance and why do I need it?

Renters insurance is coverage for your personal belongings if you live in a home, apartment, or condo. Your landlord insures the property and the building you live in, but not the items you own on the inside. If there were a fire, a dangerous storm or theft, your landlord’s insurance would be able to repair or rebuild the structure, but his insurance policy would not cover your belongings. This is why anyone who rents or leases the place they live in needs a renter’s insurance policy.

The details of what’s covered (and what isn’t) depends on the policy you buy. There can also be a variance between competing companies on coverages. This list is based on the ratings the top three rating companies gave each company based on financial strength, customer experience, and ability to pay should you file a claim.

Rating companies and how they rate

J.D. Power rates on a scale of 2 to 5, 5 being “Among the Best” and 2 being, “The Rest.”

A.M. Best has an A-D rating scale. “A” means, “superior” and D means “poor”. They also use a plus or minus notch to their letter grade. Also, they further break down category rating variance that allows an added plus if warranted.

Standard and Poor’s (S&P) rating scale goes from AAA to D. An AAA rating is, “extremely strong” and a D represents “default.” They may also contain a plus or minus to reflect a rating within a major subcategory.

Six best renters insurance companies

1. State Farm

State Farm has been around since 1922 and began as a single line auto insurance company. State Farm now sells over 100 products to over 84 million policyholders and pays over 39,000 claims per day.

Ratings

  • JD Power – 5
  • AM Best – A++
  • S&P – AA

Coverages

  • Personal Property  coverage protects your personal belongings in the event of wind, hail, lightning, fire and smoke, theft, vandalism, and sudden and accidental water discharge from plumbing.
  • Loss of Use – This coverage will provide payments when your home is damaged or uninhabitable due to a covered loss. It includes living expenses during your temporary relocation. The limit is up to 24 months.
  • Personal Liability – This coverage will pay for your legal liability If you are responsible for bodily or property damage for a covered loss. It may also pay for defense against claims.

Exclusions

While most common cause incidents are covered, not all are. A few of the uncovered losses would include:

  • Water damage due to a flood.
  • Damage caused by an earthquake or landslide.
  • Damage from a nuclear hazard.

Add-ons

There are many additions you can make to your renters insurance policy. You can add additional liability coverage that will go above the limits of the basic policy. You could also add earthquake damage coverage. This would be beneficial if you lived in one of the 42 states that have earthquake activity. Another add-on that is available is identity protection.

Deductible and Premium

The average deductible is around $500, which means you’re financially responsible for the first $500 before the insurance kicks in. You have the ability to increase your deductible to lower your monthly premium. However, you’re also then on the hook for your damages.

How much risk are you willing to take on to save money on your premium?

2. Allstate

Allstate was founded in 1931 and began selling auto insurance policies. Today, Allstate has more than 16 million policyholders nationwide.

Ratings

  • JD Power – 2
  • AM Best – A+
  • S&P – AA-

Coverages

  • Personal Property -covers your personal property if it is stolen or lost in an event such as fire or other covered peril.
  • Reimbursed Living Expenses -if you suffer a covered loss this benefit will cover additional living expenses temporarily while repairs are being made.
  • Personal Liability -covers medical bills and legal expenses if someone injures themselves or if the damage is done to their property while visiting you and sues you.
  • Guest Medical Coverage -covers medical expenses of someone who, while in or around your property injures themselves.

Exclusions

While most common cause incidents are covered, not all are. A few of the uncovered losses would include:

  • Water damage due to a flood.
  • Damage caused by an earthquake or landslide.
  • Damage from a nuclear hazard.
  • Damage or loss due to a sewage backup is not covered.

Add-ons

A scheduled personal property policy can be added on to help fill the gaps that are within the limits of your basic policy. Umbrella insurance is added liability coverage that will go above the limits of the basic policy. The reimbursement provision takes out the depreciation when you file a claim of personal property. But will be on a reimbursement basis.

Deductibles and Premiums

$250, $500, and $1000 deductibles are available. Premiums begin at about $16 a month.

3. Farmers Insurance

Farmers Insurance has been around since 1928 and services10 million customers with over 19 million policies spread across all 50 states.

Ratings

  • JD Power – 3
  • AM Best – A
  • S&P – A+

Coverages

  • Personal Possessions  Your possessions are covered under a named-peril basis if an incident such as fire or theft occurs. You choose the amount of coverage you want based on what you own.
  • Additional Living Expenses – Pays the reasonable and necessary increase in living expenses should you be required to relocate temporarily due to your home being damaged or uninhabitable. Up to 24 months of coverage available.
  • Personal Liability – This coverage helps if you are legally responsible for a guest’s bodily injury or property damage if they have an accident on your property. This also covers injury done by pets. It will also include the cost to defend yourself should you be sued.
  • Medical Payments – This coverage goes hand in hand with Personal Liability. This will pay the medical expenses of the accident above that occurred on your property.

There are “special limits” on some of the items you own. These will mainly be precious items like jewelry and silverware, collectibles such as stamps and trading cards and items that carry a monetary value like banknotes and physical cash.

Also, when a claim is filed, your items are covered at the cost of the item at the time of a loss minus depreciation. There is an add-on available that will cover the replacement cost of the item at the time of loss only, with no depreciation.

Exclusions

  • Earthquake – Damage or loss due to an earthquake or landslide is not covered.
  • Flood -Damage or loss due to a flood event is not covered.

Add-ons

Farmers Insurance offers several add-ons, also called floaters, to help cover gaps in your insurance policy. Add-ons such as replacement cost, which takes out the depreciation factor when claiming a loss of personal property, identity shield helps you recover should you face a case of identity theft and many floaters for you to specifically cover your personal items. A personal article floater will increase the coverage limit on those “special limit” items. You could also get more specific and purchase a Jewelry or securities floater.

Deductibles and Premiums

Deductibles vary. Premiums range between $15 and $30 per month. 

4. Liberty Mutual

Liberty Mutual began in Massachusetts in 1912, providing workers’ comp insurance.

Ratings

  • JD Power – 2
  • AM Best – A
  • S&P – A-

Coverages

  • Personal Property – covers your personal property in the event of a fire, theft, or certain types of water damage.
  • Liability – protects from damage or injury to someone else when within your rental. Will also help if a lawsuit if filed against you.
  • Loss of Use – if temporarily displaced your policy may cover expenses of living elsewhere on a short-term basis. Most policies also cover the difference between expenses of your new living situation and the old one.

There are “special limits” on some of the items you own. These will mainly be precious items like jewelry and silverware, collectibles such as stamps and trading cards and items that carry a monetary value like banknotes and physical cash.

Also, when a claim is filed, your items are covered at the cost of the item at the time of a loss minus depreciation. There is an add-on available that will cover the replacement cost of the item at the time of loss only, with no depreciation.

Exclusions

  • Flood – Damage or loss due to a flood event is not covered.
  • Earthquake – Damage or loss due to an earthquake is not covered.

Add-ons

Policy add-ons such as home computer and software and jewelry give you an increased amount of an appraised item that goes above the specified limit of your policy. Replacement cost will take the depreciation aspect out of a claim on your personal property. You can also purchase additional liability protection.

Deductibles and Premiums

Deductibles vary, up to $5,000. Premiums begin as low as $20 per month.

5. Erie Insurance Company

Erie Insurance Company has been around since 1925 and began by selling auto insurance. Now, Liberty offers a wide range of insurance options and now have over five million active policyholders.

Ratings

  • JD Power – 5
  • AM Best – A+
  • S&P – AA

Coverages

  • Personal Property – helps replace personal property such as furniture, TVs, and wardrobe. Limits do apply.
  • Additional Living Expenses – covers the cost of living if you are displaced while repairs are being made.
  • Liability – covers any harm done to other people or their belongings while they are visiting your rental when the fault is yours.

There are “special limits” on some of the items you own. These will mainly be precious items like jewelry and silverware, collectibles such as stamps and trading cards and items that carry a monetary value like banknotes and physical cash.

Also, when a claim is filed, your items are covered at the cost of the item at the time of a loss minus depreciation. There is an add-on available that will cover the replacement cost of the item at the time of loss only, with no depreciation.

Exclusions

  • Flood – Damage or loss due to flooding event is not covered.
  • Earthquake – Damage or loss due to an earthquake is not covered.

Add-ons

Policy add-ons are replacement cost takes the depreciation aspect out of a personal property claim. An Umbrella policy is added Liability insurance. And Personal Valuables insurance helps fill the gap that the limits the basic Personal Property has.

Deductibles and Premiums

Deductibles vary. No premium info.

6. USAA

USAA, around since 1922, is available to members of the military and their families. 

Ratings

  • JD Power – 4
  • AM Best – A++
  • S&P – AA+

Coverages

  • Personal Items -personal items such as clothing, furniture, and computers are covered for events such as fire and theft and many other disastrous events. 
  • Liability -protects you if you are held responsible for a visitor’s property damage or injury.

Other insurance companies cover Loss of Use, also known as Additional Living Expenses. It does not appear that USAA offers this benefit.

There are “special limits” on some of the items you own. These will mainly be precious items like jewelry and silverware, collectibles such as stamps and trading cards and items that carry a monetary value like banknotes and physical cash.

Also, when a claim is filed, your items are covered at the cost of the item at the time of a loss minus depreciation. There is an add-on available that will cover the replacement cost of the item at the time of loss only, with no depreciation.

Exclusions

The normal exclusions are covered by USAA. 

  • Earthquake – with USAA your personal items are covered by an earthquake.
  • Flood – with USAA your personal items are covered for a flooding event.

Add-ons

If you have items that exceed the limits of the personal item coverage, you can purchase a valuable personal property rider that will help you fill the gap your policy limit has.

Deductibles and Premiums

Deductibles start at $250 and vary. Premiums begin as low as $12.

Questions to consider

Insurance companies are not all the same. Some offer coverages as part of their basic policy, while others the same feature for an additional cost. When you are shopping for insurance, it’s imperative that you find the one that best suits your needs.

There are considerations you need to make, especially if you are considering relocating and need to purchase a new policy.

Does the type of home matter?

Normally, since renters insurance only covers your belongings, the type of home will not matter. What will matter is that in a larger home, you will have more personal possessions, thus more to insure. You will want to look at the limits the policy has and consider having an add-on/rider that will cover your higher priced items like jewelry, collections, and precious metals. You can learn more by reading our homeowners insurance guide.

Will renters insurance cover roommates?

Renters insurance covers the individuals listed on the policy. If your roommate is not listed on your policy, he or she will not be covered. If they have coverage and you are not listed on their policy, you will not be covered.

Does where you live matter?

Since your renters insurance covers your belongings, where you live does not necessarily matter if you are moving locally. However, insurance prices do vary from state to state. Most policies will move when you move; your rate may just change if your move is drastic. Other factors are other state law and limits a new landlord may impose.

Does crime affect renters insurance?

When you have anti-theft devices on your rental, live in a gated community, or have front desk security, then your premium could be cheaper than someone who lives unprotected in a higher crime area.

Will renters insurance cover me if my neighbor causes damage?

When you have renters insurance, you are covered if your neighbor is negligent and causes damage to your property. If they have renters insurance, it also will cover the damages you sustain, but your policy would be better to file under because you could have better coverage. For instance, if you have an older computer that is damaged due to a water leak, then their policy could only cover the actual cost of your now non-functioning computer. If your policy has a replacement cost rider, then you would get more coverage under your policy. This is another reason you want your own policy and not rely on another person’s coverage.

Final thoughts

In closing, we’ll leave you with a scenario.   

Consider this. You live in a multi-story apartment complex. In a possible violation of complex rules, your upstairs neighbor decides to cook on an outdoor grill. His negligence starts a fire. Now, your apartment is spared from burning down due to the diligence of the fire department. However, water and smoke damage have still happened to your belongings. The question is, will the apartment complex pay for your damages?

The answer is most likely, no. They will pay for the structural damage, but the cost of relocating temporarily and the replacement costs of what you lost is squarely on you. That is unless you have renters insurance.