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Best renters insurance companies

By Posted : November 9, 2018

If you are in the market for a renters insurance policy (and you should be if you rent) then you can’t do any better than USAA, Chubb, Allstate, AIG and Esurance. Insurance.com recently surveyed over 3,700 customers and found these insurers are the best of the best when it comes to insuring your possessions.

Insure.com analyzed customer ratings for 15 of the leading insurance companies in the rental, home and condo category to find out who offers the best service and price.

The survey looked at six different factors:

  • Value for the price
  • Customer service
  • Claim satisfaction
  •  Website and app ease of use
  • Recommendation: This measures how likely a person is to recommend their insurer
  • Renewal: Looks at how likely a person is to renew with the same insurance company

 When all the data was crunched, USAA came out on top with Chubb and Allstate rounding out the top three.

 So who is the best when it comes to renters insurance?

When it comes to renters insurance, USAA was ranked the overall number one renters insurance company with a score of 90.38. This is hardly a surprise as USAA often ranks at the very top of renters and homeowners insurance customer satisfaction surveys, in fact they also came in number one on the 2018 J.D. Power survey.

The only problem with USAA is that unless you are a military family or a direct relative of a member of the military, you are ineligible for a policy.

 While the number one renters insurance company may be out of your reach, there are a number of other options available. Here is how the results shook out; scores are ranked out of a 100 possible points:

1.  USAA -- 90.38

2. Chubb (ACE INA Group / Ace Limited) -- 89.75

3. Allstate -- 88.34

4. AIG (American International Group) -- 88.22

5. Esurance -- 86.93

6.  Progressive -- 86.62

7.  Liberty Mutual -- 86.16

8.  American Family -- 85.92

9.  Hartford -- 85.79

10. Erie -- 85.50

11. Farmers -- 85.47

12. Nationwide -- 85.13

13. State Farm -- 84.70

14. Safeco -- 83.75

15. Travelers -- 81.89

Why do I need renters insurance?

The number of renters is increasing, in fact, according to a Pew Research Center report, there are more renters now than at any other point in the last 50 years. Currently, 36.6 percent of households are rented, only slightly below the 50-year high of 37 percent back in 1965.

If you are a renter, you are on your own when it comes to protecting your possessions. “A common misconception is that your landlord’s insurance will cover your personal property loss if there is a fire or other event, but that is not true. Your landlord’s policy only insures their property and liability. It doesn’t provide any protection for you,” warns Stefan Tirschler, product and underwriting manager at Square One Insurance.

If you are not currently carrying renters insurance, you are certainly not alone. According to a 2016 ORC International survey, only 41 percent of renters have renters insurance compared to 95 percent of homeowners that have homeowners insurance.

While this is a slight increase from 2015 (40 percent carried renters coverage) and a significant increase from 2011 when only 29 percent of renters carried renters insurance, there are still way too many renters who are not protected by this very affordable coverage.

This may be due to the fact that mortgage lenders require homeowners insurance while renters insurance is not usually a required coverage, but that is starting to change. “Renters insurance is getting more and more popular in the US rental market, and more and more landlords require it from their tenants, says Daniela Andreevska, marketing director at Mashvisor.

Going without renters insurance can be a very expensive mistake. A burst pipe, severe weather or a fire can quickly destroy most of your possessions, and if you don't have renters insurance, you will be on the hook for the cost to replace your items. 

For more details on how coverage works to protect you, read our guide to renters insurance.

“You might not notice how much your belongings cost when you accumulate them over several years, but take a moment and consider how expensive it would be if you had to buy everything again, all at once,” says Tirschler.

In addition to covering the cost to replace all of your property, renters insurance also offers liability coverage.  Liability coverage can be a financial lifesaver if someone is injured in your rented home. “This is something a lot of renters don't realize they need until someone slips at a party, or absent-mindedly allows the sink to overflow. If either of those things happen, the liability portion of a renter's policy can pay for the injured party's medical bills and property damage or the policyholder's legal fees”, says Virginia Hamill, insurance analyst with FitSmallBusiness.com.

One more advantage to a renters insurance policy is that it usually (it can vary by insurer) covers your property even when it’s outside your home. “A policyholder's property is often covered away from the address listed on the policy, so a smartphone stolen on the way to work is most likely covered,” advises Hamill.

Renters insurance is a bargain

Renters insurance has always been a pretty good deal and pricing has stayed pretty stable over the years. It provides a tremendous amount of protection for the money.

Rates will absolutely vary depending on the location of your rental, your credit rating and other personal factors but according to an Insure.com rate analysis the national average for a renters insurance policy is $197 a year which breaks down to only $17 a month.

These prices are based on $40,000 in personal property, $100,000 in liability insurance and a deductible of $1,000. Upping the coverage levels or lowering the deductible will impact prices. But you can use our average renters insurance rates calculator to see prices for 75 different coverage levels in your ZIP code if you want more customized estimates.

Final tips for renters insurance shoppers

Here are just a few tips to help you save money and find the best renters insurance policy:

Replacement value vs. Actual cash value

Renters insurance (like homeowners) comes in a couple of different flavors, replacement value or actual cash value and in our opinion, replacement value is absolutely the best choice.

A replacement value policy will replace your possessions with one of similar quality, regardless of the age or condition of the damaged or destroyed one. Actual cash value (ACV) policies take depreciation into account when calculating a value which means your 10-year-old TV will be basically worthless as far as your policy is concerned.

Replacement value policies are a bit more expensive (think 10-15 percent) but the payout difference can be huge if you have to make a claim. An actual cash value policy may leave you on the hook for replacing most of your property, especially if your possessions are older.

Raise your deductible to save money

You can always save money by raising your deductible. The higher the deductible, the lower your premium but always choose a deductible that you can easily afford in case you have to make a claim.

Discounts matter

Discounts are extremely common in the renters' insurance market. According to J.D. Power, 81 percent of renters' insurance customers report receiving some type of discount.

Bundling is just one example of the available discounts. "Many insurers offer significant discounts if you buy more than one policy, says Dondrell Swanson, a State Farm agent in Gilbert, Arizona. "For renters, this usually means bundling auto insurance with a renters policy, but life, business, and other plans may also qualify," says Swanson.

Shop your coverage

Premiums can vary dramatically between insurance companies so shopping your coverage will almost always result in savings. Insurers rate risk differently (they all have proprietary systems) which can result in major price differences.

Shop your coverage on yearly basis and always make sure you are comparing apples to apples when it comes to coverage levels and deductibles.

Below you'll see how much you can save on renters insurance by comparing rates. You'll see the savings -- the difference -- you can realize by choosing the lowest rate from the companies offering you a policy. The table shows the highest and lowest rate fielded from up to six major insurers for various coverage amounts, all with a $1,000 deductible.

CoverageHighest rateLowest rate% savings$ savings
$40,000/$100,000$396$121227%$275
$40,000/$300,000$410$130215%$280
$60,000/$100,000$522$152243%$370
$60,000/$300,000$536$162231%$374
$80,000/$100,000$656$180264%$476
$80,000/$300,000$670$192249%$478

Price shouldn’t be the only factor

While price is important, it's not the only consideration. "Don't shop entirely on price," advises Kathy McDonald, president of Global Specialty for Assurant. "If you have a claim, you want a quality company that will be there to help you out. Ask your apartment complex or friends for recommendations and research your options," says McDonald.

Choosing the right property and liability limits is key

Renters insurance offers a couple of different protections and you can customize your policy to make sure you are carrying enough coverage. While it varies by insurer, in most cases you can choose coverage levels between $20,000 and $100,000 in personal property coverage.

Most experts recommend carrying at least $40,000 and if you have a lot of possessions, or a large amount of valuable property you should up coverage levels to $100,000.

When it comes to liability limits on renters insurance, more is always better. "Limits should be enough to cover the renter's personal assets. Many carriers offer options of $100,000, $300,000, and $500,000,” explains Bill Gatewood, corporate vice president and director of personal insurance at Burns & Wilcox. "When determining how much liability coverage to purchase, my answer is always, as much as you can afford. It is inexpensive and is one of the best values in the insurance market today," continues Gatewood.

Lawsuits can quickly turn expensive and without the proper liability coverage, all of your assets can be at risk.

Consider a personal umbrella policy

If you have a high net-worth or would just feel more secure with higher liability limits, consider an umbrella policy. Umbrellas are typically sold in $1million increments and are very affordable. They take over where your renter policy limits leave off. "Umbrella policies are great for people who have a dog," advises Gatewood. Dog bites can result in expensive medical bills as well as a lawsuit. If you end up on the losing end of a lawsuit a big judgment can be financially devastating.

Sharing a policy with a roommate is a bad idea

Sharing a renters insurance policy with your roommate is never a good idea, even if you insurer allows it. "We don't recommend sharing a policy," says Richard Lewis, digital marketing manager for Elephant Auto Insurance. "The reason being that your roommate's insurance claims go on your record, too, and, as a rule, it's best to establish your own insurance record," continues Lewis.

Any claims that end up on that policy will follow you around for a number of years so if your roommate makes a bunch of claims on the policy, you will be paying a higher premium for many years to come. If you decide to ignore our advice make sure you have a serious discussion with your roommate and set up rules about premium payments as well as when a claim can be made.

Cap on valuables

Just like a homeowners insurance policy, most renters insurance policies have a maximum cap on high-value items such as artwork, wine, jewelry and other collectibles. This amount varies between insurance companies but $1,500 is pretty standard. If you have lots of high-value property you may need a rider to be fully protected.

 

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