10 Best Renters Insurance of 2018
Get the best deal in renters insurance. We give you the leading renters insurance services in the country today.
Renters insurance is a home insurance product designed specifically for renters. When disaster strikes, your landlord's or property manager's insurance policies will usually cover building repairs, but not your personal items. Having your own renters insurance could reimburse you, replacing possessions damaged by fire, flooding, or lost to theft and vandalism. Standard policies also include liability coverage, which pays for any damage or injuries others sustain while visiting your home, and coverage for additional living expenses if your home is destroyed in a disaster covered by your policy. You can also add protection from credit card or debit card theft, as well as from forged checks. Theft extension coverage can even protect some personal items stored away from the home, such as a boat, mobile home, or vehicle.
Although the vast majority of homeowners have insurance policies, somewhere between only 38% and 41% of renters have renters insurance. This may have something to do with the fact that homeowners insurance is always mandated by the bank that issues your mortgage, where renters insurance is usually not required by landlords. However, renters insurance is potentially useful to anyone renting any kind of dwelling. And considering the negligible monthly cost, it is surprising more tenant don't avail themselves of it. Many renters erroneously believe they are covered under their landlord's homeowners policy.
When evaluating different renters insurance policies, consider the scenarios they provide coverage for, if there are any discounts available, what riders or additional coverage plans they offer, and finally, the cost. Factors that will impact the cost of your premium include your location, the deductible amount, and whether you opt for replacement cost vs actual cash value. However, most policies are quite affordable, so cost shouldn’t be the top consideration on your list.
If you do decide to purchase renters insurance, a helpful tip is to make a thorough documentation of your personal property when you first get your policy, to facilitate the process should you ever have to file a claim. Also, beware of purchasing too little coverage. Overestimate how much your belongings are worth, or how much you'd likely have to pay out for an accident. Since policies are so inexpensive, more coverage could only result in a few dollars increase a month. Before making a final decision, we recommend you research at least three different companies and obtain an estimate from each.
Top 8 Companies
- Over 84 years of industry experience
- Protect your belongings in & out of your apartment
- As low as $4 a month if bundled
- Covers fire, theft or vandalism
- Offers guest injury protection
- Get an online quote or talk to an agent
- Holds an "A" (Excellent) FS rating with A.M. Best
- 8 Million+ active policies and $22 billion in assets
- Offers customizable renters insurance coverages
- Multiple discount options and add-on policies
- Get a quick quote online or over the phone
- Quick and easy online quotes and claims
- Multi-policy discounts for auto and renters
- Liability coverage with medical payments
- 24-hour support online or by phone
- A convenient mobile app and virtual assistant
- "A" (Excellent) financial strength ratings
- A-rated and accredited by the BBB
- Protect valuable items at home and on the go
- Discount options and add-ons available
- Round-the-clock online claims processing
- Solid reputation and 160+ years of industry experience
- 24/7 Claims reporting, both online and over the phone
- Personal property, liability & living expenses coverage
- Replacement cost & "valuable items plus" plan riders
- A convenient mobile app for IOS and Android operating systems
- Rated Aa1 by Moody's and AA by Standard & Poor's
- Instant online quote
- Policies start at $150/year
- Discount for renters and auto insurance bundles
- Additional coverages available for waterbeds and identity restoration
How We Compare Renters Insurance
A company's financial strength gains particular importance with insurers, as their business model is predicated precisely on their overall ability to pay out claims. Renters insurance companies are no different. Factors to look at when evaluating an insurance company should include their experience, as demonstrated by their time in business. Though not necessarily a guarantee of their eventual ability to process and fulfill claims, an insurers' long history demonstrates their track record of success. Finally, looking through a business' ratings with financial services companies such as Standard & Poor's or Moody's can indicate their level of financial competence.
Standard & Poor's Financial Rating
Standard & Poor's is an American financial services company that publishes financial research and analysis on companies, stocks, bonds, and commodities. They are part of the Big Three credit ratings agencies, together with Moody's and Fitch. They rate businesses from AAA to D, highest to lowest.
Moody's Financial Rating
Another of the Big Three credit ratings agencies, Moody's also rates debtor's ability to repay debt, as well as their likelihood of default. Their rating system ranges from Aaa at the top of the spectrum, to C, the lowest quality.
AM Best Financial Rating
A.M. Best is an American credit agency based in New Jersey that focuses specifically on the insurance industry. Their financial strength ratings vary between aaa (exceptional), to d (in default).
Renters insurance, also known as tenant's insurance, is designed to protect you and your belongings in the case of damage from disasters such as fire, smoke, lightning, vandalism, theft, explosion, windstorm, water, and other disasters, as specified in each policy. This part of the policy falls under personal property protection, but there are typically two other coverage areas as well: personal liability and additional living expenses. Personal liability provides coverage for repairs and medical bills, should you be found liable for a guest suffering injury to themselves or their property while at your home. It also takes care of paying for damage you and your immediate family members may cause to other's property, for instance, your kid ruining your neighbor's antique Persian rug. Liability limits tend to start at $100,000, but some experts recommend triple that amount. You can also purchase umbrella or excess liability coverage, to expand your coverage up to an average of $1 million.
If your home is damaged or rendered uninhabitable, some renters insurance policies also provide additional living expenses, which covers incurred costs, such as hotel bills. This generally works by paying the difference between your normal cost of living and additional expenses.
In order to decide the amount of coverage you need, it's a good idea to get a ballpark figure for the monetary value of all your personal possessions, from high-cost items such as major appliances and electronics, to small things such as bed linens and kitchen utensils. The simplest way to do this, though time-consuming and painstaking, is to make an up-to-date inventory of all your personal possessions, which will also be helpful for filing and processing insurance claims. Ideally, you should get enough coverage that you might theoretically be able to replace all of your belongings in the event of a disaster.
Lastly, it's also important to fully understand the limits of your policy, not only in terms of how much money it will actually reimburse, but also in that these generally don't cover structural damage to the rental property (which is covered under the homeowner's insurance policy). Most insurers offer two types of policies: actual cash value, which pays to replace your possessions minus their depreciation; or replacement cost, which doesn't deduct for depreciation. Though the latter can cost up to 10% more than cash value, replacement cost coverage can prove well worth the additional investment.
When comparison shopping, make sure that your renters insurance company offers protection for all three types of coverage:
- Personal Liability: protects policy holders from paying for another individual's medical bills and/or damage to another individual's property
- Personal Property: covers the policy holder's property if it is stolen or damaged by covered events
- Loss of Use / Additional Living Expenses : covers the cost of additional costs and living expenses if the property becomes unlivable as a result of covered events
It's important to note that some insurers also offer optional policy riders, such as:
- Scheduled Coverage: this is an optional increase in coverage provided on specified items; such as high-cost possessions like jewelry and art, which may not be fully covered by the basic policy
- Identity Theft Restoration: covers costs associated with identity theft, including legal fees and lost wages
- Off-Premises Event Coverage: extends coverage while the policy holder is away from their property, for instance, while staying at a hotel
Pricing & Discounts25%
The average cost of renters insurance premiums in the U.S. (2017) is $187 per year, or less than $16 a month. However, this number can vary significantly depending on where you live, and the frequency and intensity level of the disasters you may be subject to, reaching as much as $244 in Mississippi and as little as $115 in North Dakota. In any case, of an approximate 43 million households being rented in the United States, only 38%-41% currently have renters insurance. This number is growing, though, as people realize that they can obtain a significant amount of coverage for a relatively low investment.
When comparing the costs of different policies, the first thing to evaluate is the coverage limits, which can range between $5,000 and $500,000 for your basic personal possession coverage. This generally won't include novel or valuable items, such as jewelry or vintage vinyl collections, which must be insured under a separate policy rider. As we discussed under coverage, insurers either pay the full replacement cost, or their actual cost value, which deducts each item's depreciation.
There are many ways to save money on your policy. The most common is choosing a higher deductible, which can reduce your monthly payments by as much as twenty-five percent. There are usually also a number of discounts available, the most common of which include:
- Claims-Free History – Policyholders who haven't used their insurance within a specific period are eligible to get a claim free discount when renewing their contracts
- Multi-Policy – Bundling renters insurance with a company's other policies, such as auto or business insurance, can also get you discounts
- Additional Discounts – Some insurers offer discounts for safety systems like deadbolts, alarms, and smoke detectors. Others also knock down prices depending on your age and whether you smoke
Some common property-level discounts are for sprinklers, fire protection, security systems, lobby staff or building security, and other anti-theft measures.
Policy-level discounts can include reductions for senior citizens, bundled policies with the same company, automatic payment options, and claims-free history.
Customers only use insurance when filing a claim, usually after a devastating event. In such cases, the quality of an insurer's customer service truly comes into play. It's essential that the company be easy to contact, supplying multiple ways of doing so. Options can include via email, online claims filing, live online chat with agents, and 24-hour call centers. Likewise, we consider it important that companies provide educational resources, assisting their potential and current customers to better understand their policies. Good resources such as coverage calculators, instant quotes, articles, and FAQ's can be invaluable.
Finally, gaining an appreciation for customers' real-life experiences with a company can give a good idea of things to look out for and which questions to ask. Independent customer review websites, such as the Better Business Bureau and TrustPilot, are good starting points for this. The North American Industry Classification System (or NAICS), also collects data on businesses, offering a handy complaint ratio which allows potential customers to see how their insurer of choice's complaint ratio compares to the industry at large.
The Better Business Bureau has been setting high ethical standards for businesses for more than 100 years. Millions of people depend on their rating systems to identify trustworthy companies, by virtue of the BBB's continued commitment to fostering honest relationships between businesses and customers.
TrustPilot is an online review community, in which consumers share their experiences with services and products. Apart from the fact that getting real-life feedback from people who've used a product can be very helpful when choosing between companies, TrustPilot also provides a score, which gives a measure of average overall satisfaction.
NAICS Complaint Ratio 2016
The North American Industry Classification System (or NAICS), was established in 1997 as a result of a joint effort by Mexico's Instituto Nacional de Estadística y Geografía (INEGI), Statistics Canada, and the United States Office of Management and Budget (OMB); to classify businesses by type of economic activity. They also collect, analyze, and publish statistical data on companies, including total complaints and how these compare to each industry in general (complaint ratio).
Customer Questions & Answers
How much does renters insurance cost?
The average national cost of renters insurance is $187 per year, with monthly charges ranging from $10 to $21.83. The specific cost of your renters insurance policy will vary depending on the selection of coverages, their amount, and the deductible. Most renters insurance policies include loss of use coverage, personal property coverage, and personal liability coverage; but add-ons like earthquake damage coverage and identity restoration coverage are available for an extra cost. Your location can also change the cost of your insurance; houses in flood areas, hurricane-prone areas, and other places with frequent extreme weather get higher premiums because of the risk involved with living in those regions.
How much is the average renters insurance deductible?
An insurance deductible is the amount you must pay out of pocket for a loss before you are able to file a claim with the insurance company. For renters insurance, the average is between $500 and $1000. The higher the deductible, the lower your premium. Keep in mind that, if the value of the loss falls below the deductible, you will not be able to file a claim and will be forced to bear the cost of the loss yourself. You should create a home inventory of your belongings to help you assess what your deductible should be, as well as your coverage limits.
Is renters insurance required?
Unlike homeowners insurance, which is required by most mortgage lenders, proprietors do not usually demand renters insurance from their tenants. However, some proprietors do require it in their lease agreements, and this is becoming increasingly popular. The proprietor and the tenant are both benefited with, for instance, personal liability coverage, which protects them both if a guest is injured on the rental property premises. Though this should have been discussed at the moment of signing, review your lease agreement to find out if the proprietor requires that you carry renters insurance.
Who is covered under renters insurance policies?
Renters insurance policies only cover the people listed on the policy. This is usually just the policyholder, or the person who takes out the policy. Renters insurance does not automatically include roommates or housemates. To be covered, these must be specifically added to the policy. However, carefully weigh the pros and cons of including roommates in your renters insurance policy. Any claims they make would show up on your personal insurance history, and managing the policy after you move out may be more trouble than it’s worth. Check with your insurance company to see if you can add additional people to your policy.
Is renters insurance tax-deductible?
Your renters insurance premium may be tax-deductible under specific circumstances. If your lease agreement requires you to buy renters insurance, you may qualify for a tax credit. Also, if you work from home, you may be able to deduct a portion of your renters insurance premium from your taxes, since it could be considered a business expense. The IRS may require you to calculate your home office’s expenses, based on the percentage of your home that is dedicated to your business. The portion of your renters insurance that corresponds to that percentage may be tax-deductible. Talk to your tax advisor to find out whether you can deduct your renters insurance premium from your taxes.