Although home ownership is considered the American dream, there are many benefits of renting your home over owning it. If your stove or refrigerator breaks, you typically don’t bear the cost of fixing it. If you decide to pick up and move across the country, you can do so without worrying about selling your home first. Plus, you don’t have to pay property taxes as a renter.
However, insuring your home with renters insurance is just as important as having homeowners insurance. Renters insurance doesn’t cover the structure you live in, but it does cover everything else you own and protects you if you are liable for injuries or property damage at your home. And you want to be sure to get that insurance from a reliable insurance company with excellent customer service.
Here are our top picks for the best renters insurance companies of 2023.
- 1. USAA: Best for military
- 2. Farmers Insurance: Best for in-person assistance
- 3. Allstate: Best for retirees
- 4. State Farm: Best for valuables
- 5. Nationwide: Best for water backup coverage (Tie)
- 5. Erie Insurance: Best for extra coverage options (Tie)
- 7. American Family Insurance: Best for customer satisfaction
- 8. Lemonade: Best for ease of use
- What is renters insurance?
- What does renters insurance cover?
- What doesn’t renters insurance cover?
- How does renters insurance work?
- How much does renters insurance cost?
- How to choose a renters insurance policy
- Our methodology
- FAQs about renters insurance
- Bottom line
1. USAA: Best for military
USAA ranks number one for its affordability, customer service, and financial strength. USAA exclusively serves military service members, veterans, and their family members. It also tailors its policies specifically to the needs of military members. For example, it also covers your belongings if you’re deployed or move abroad. And if you’re in the military and living on base, in barracks or military dorms, you could save up to 28% on a specialized renters insurance policy.
USAA renters insurance policies offer replacement cost coverage and provide coverage for floods and earthquakes at no additional cost. The company gets a superior (A++) rating with AM Best for its financial strength.
2. Farmers Insurance: Best for in-person assistance
Farmers Insurance ranked second for renters insurance due to its affordability and low number of complaints. You can add identity theft to your policy and it includes scheduled coverage for personal items. Scheduled coverage is coverage that increases coverage limits on specific, high-value items such as fine art or collectibles.
Although you can get online quotes and buy policies on the Farmers website, one advantage to Farmers Insurance is its network of local agents. If you like in-person service, Farmers could be a good choice.
Visit Farmers Insurance.
3. Allstate: Best for retirees
Allstate ranks third due to its A+ rating from AM Best and its third-place J.D. Power ranking for customer satisfaction. That said, consumer complaints for Allstate are a bit higher than other renters insurance companies.
One plus for Allstate is its healthy discount for those age 55 or older and retired. If you’re in this category, you could qualify for up to 25% off your premiums for renters insurance with Allstate. The company also provides additional scheduled personal coverage for high-priced valuables, identity theft coverage, and business property coverage.
4. State Farm: Best for valuables
State Farm landed in fourth place in part due to its A++ rating from AM Best, which indicates its financial strength and ability to pay claims to its policyholders. You can also get identity theft coverage added to your policy and can file claims and purchase policies online or with a local agent.
With State Farm, you can also add what it calls a Personal Articles Policy to your renters insurance policy. This policy covers the replacement value of high-price collectibles, jewelry, sports equipment, and health-related items. This coverage applies worldwide and usually doesn’t have a deductible. You also can add inflation coverage, which automatically adjusts the amount of coverage annually based on the Consumer Product Inflation index.
Visit State Farm.
5. Nationwide: Best for water backup coverage (Tie)
Not all renters insurance policies cover water damage caused by backed-up water or sewer mains, but Nationwide does allow you to opt in for this coverage. Nationwide includes coverage for any damage to additions or other improvements you’ve made to your home and coverage for unauthorized transactions on your debit or credit cards.
The insurer offers other additional coverages you can add to your renters insurance, including:
- Earthquake coverage
- Theft extension coverage, which protects personal belongings in any motor vehicle, trailer, or watercraft
- Valuables Plus, which provides additional coverage for high-value items.
Nationwide tied with Erie Insurance in our rankings for renters insurance companies. One downside to Nationwide is that it has relatively high insurance premiums.
5. Erie Insurance: Best for extra coverage options (Tie)
Erie made our list due to its high J.D. Power ranking and A+ AM Best rating. One downside to Erie Insurance, however, is that it is only available in 12 states (Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin) and Washington, D.C.
What sets Erie Insurance apart is that it offers a number of additional coverage options that you can add to your renters insurance for added protection. Added coverage includes sewer and drain backup, home sharing, earthquake, and flood coverage.
The insurer also offers “ErieSecure Home Bundles” of additional coverage, which include things such as underground service lines, equipment breakdowns, trailers and watercraft, siding and roof restoration, and criminal defense cost reimbursement. The ErieSecure Home Bundles aren’t available in North Carolina.
Visit Erie Insurance.
7. American Family Insurance: Best for customer satisfaction
Overall, American Family Insurance has a good reputation for customer satisfaction. The company receives fewer customer complaints than the average insurance company in the industry.
American Family renters insurance is also a good plan for pet owners because you can add up to $1,000 in pet insurance coverage to your renters insurance policy. The pet coverage add-on covers certain veterinary costs and funeral expenses if your pet is injured or dies during a covered event.
American Family’s renters insurance also offers a Diminishing Deductible. For every year that you don’t file a claim on your renters insurance policy, your deductible decreases by $100 up to a maximum of $500.
Visit American Family.
8. Lemonade: Best for ease of use
Established in 2015, Lemonade is relatively new to the insurance industry, but that shouldn’t discourage you from getting a quote for renters insurance from the site. According to J.D. Power, Lemonade ranked No. 1 in 2021 in overall customer satisfaction. Lemonade renters insurance is currently available in 29 states.
Lemonade is only available online.
What is renters insurance?
Renters insurance provides liability protection in case anyone is injured in your rental home and personal property protection for the items you have in your apartment or home. Renters insurance covers many of the same things that a homeowners insurance policy would cover, with the exception of the structure you live in. Although renters insurance is typically voluntary coverage, it’s wise to have, and some landlords require their tenants to carry it.
What does renters insurance cover?
As a renter, you don’t own the building you live in or, in many cases, the appliances that come with it. However, you are still responsible for what goes on in your apartment. That’s why having renters insurance is a good idea.
Renters insurance policies typically cover:
If your someone injured in your apartment, they could hold you responsible and decide to sue you. Renters insurance could help protect you in cases where you are found liable for their injuries. Personal liability coverage will help to cover your legal fees, medical bills, and other costs. It also covers you if you are responsible for damage caused to your apartment and the apartments around you from something like a kitchen fire or overflowing toilet.
Your rental home is filled with belongings you have spent your hard-earned money on over the years. But all that could be lost in a perilous event such as a fire. Renters insurance helps to cover the cost of repairing or replacing your personal belongings if damaged or destroyed in a “peril” event.
Insurers consider covered peril events to be:
- Falling objects
- Malfunctions of appliances or heating, air conditioning, and plumbing systems.
Living expenses coverage if you are displaced
If your rental home is damaged to the point that you can’t live there due to a covered loss, your renters insurance will help pay for a hotel or other living arrangements. This coverage is often referred to as “additional living expenses” or “loss of use coverage” on your renters insurance policy and is usually limited to a percentage of your personal property coverage.
Some renters insurance policies include medical payment coverage. This may help to cover any medical bills if someone is injured while visiting you at your rental home.
What doesn’t renters insurance cover?
The physical structure of your home is typically covered under your landlord’s insurance, not your renters insurance. For example, if your roof leaks or your pipes freeze and burst through no fault of your own, then your landlord's insurance should pick up the tab for damages to the building.
Not all natural disasters, such as earthquakes, hurricanes, and flooding, are covered under renters insurance. Check with your insurance company to find out what is and isn’t covered and whether you will need to get additional coverage.
For example, suppose you live in an area prone to earthquakes, such as California. In that case, you may want to invest in additional earthquake insurance because your renters insurance most likely won’t provide coverage for “earth movement” events such as earthquakes, landslides, or tremors.
If you own expensive jewelry, fine art, sports memorabilia, or other valuable items, your renters insurance policy may not provide enough coverage for these items.
For example, if you have a baseball card collection valued at $10,000, a standard renters insurance policy may only cover it up to $1,000. You may need to add a scheduled property rider to your renters insurance policy to protect valuables.
Your roommate's belongings
If you have a roommate, they will need their own renters insurance policy to protect their personal property. Your renters insurance won’t cover your roommate's stuff if it is damaged or stolen.
Bed bugs and other pests
Unfortunately, if you get an infestation of bed bugs, you’ll have to foot the bill to get rid of them because your renters insurance won’t pay for an exterminator. Renters insurance also doesn’t cover damage from other pests such as mice, cockroaches, or rats.
Damage to your car during theft
Although your renters insurance may cover your personal belongings that someone steals out of your vehicle, if they broke the car window or did other damage to the car during the theft, the cost of repairing the damage isn’t covered under your renters insurance. Those damages may, however, be covered under your car insurance policy.
Being able to work from home is great; however, your business equipment isn’t protected under your renters insurance. Renters insurance only covers your personal property. Insurance companies consider anything you regularly use for your business as business property.
If you are running your business out of your rental home, you may need to get separate business insurance to protect your equipment and other business property.
How does renters insurance work?
When getting renters insurance, you’ll want to take inventory of the items in your home and their estimated value. Saving store receipts for more significant purchases can come in handy when determining the value of things on your inventory list. You should also record the serial numbers for your electronics and home appliances.
Creating an inventory list of your personal property can be daunting, so take it room by room. There are mobile apps available that can help you create your list. It also may be helpful to take photos of the items on your home inventory list.
You can choose to cover the actual cash value of your items or the replacement cost. Actual cash value is the current amount the item is worth including depreciation. The replacement cost is how much you would need to replace the item if it is damaged.
For example, say you bought a plasma TV for $1,000 three years ago, and it was damaged in a fire. If you have an actual cash value policy, then your insurer would reimburse you for the value of the TV after it has depreciated over the past three years. So if the insurance company figures the TV depreciated about 25% since you bought it, it would only pay you $750, or 75%.
Replacement cost coverage is usually more expensive than actual cash value coverage because it pays you what it would cost to replace the lost item. So, if plasma TV are now selling for $2,000, the insurance company would pay you that amount.
You’ll need to select a deductible for your renters insurance. The deductible is the amount you have to pay out of pocket before your insurance kicks in. Deductibles typically range from $250 to $1,000. The higher your deductible, the cheaper your insurance premiums will be, but you’ll have to pay more out of pocket if you have to file a claim.
You’ll also need to determine how much liability coverage you want on policy. Most renters insurance policies will set the liability coverage at $100,000. However, you may need more if you often have other people at your home or if you own a pet, which could be a liability if it bites one of your visitors.
WarningInsurance companies may have breed restrictions when it comes to dogs. Consider checking with insurance companies about their pet policies before signing up.
How much does renters insurance cost?
The cost of renters insurance is minimal, especially compared to the protection it provides. According to the National Association of Insurance Commissioners (NAIC), monthly premiums for renters insurance range anywhere from $15 to $30. Some insurance companies may offer a discount if you pay for the year all at once rather than monthly.
Other factors that impact what you’ll pay for renters insurance include your:
- Coverage amounts
- Zip code
- Residence type
- Credit score
Your insurance company may also offer discounts on your renters insurance. You may qualify for a discount if you:
- Are a non-smoker
- Are a senior citizen
- Have certain safety measures in your rental home, such as fire alarms, smoke detectors, sprinkler systems, burglary alarms, or live in a gated community
- Don’t have a history of claims
How to choose a renters insurance policy
There are several things to take into account when you are shopping around for a renters insurance provider, including:
- Types of coverage: Do you want a renters insurance policy that provides the replacement value of your personal belongings, or are you fine with just receiving the actual value for your lost items? What supplemental coverage would you need for valuables or natural disasters such as earthquakes or floods?
- Coverage limits: How much renters insurance coverage do you need? What is the total value of your personal belongings? Does your lifestyle/living conditions require you to have more personal liability protection? Do you own a pet (which could make you more liable in some instances)?
- Customer service: How is the insurance company rated for its customer service? Is it slow to respond to claims? Does it reject a lot of claims? Is it easy to contact if you have questions or concerns?
- Possible discounts: Does the insurance company offer multi-policy discounts if you bundle your renters insurance with other insurance policies such as your car, boat, or business? What other discounts does the insurance company offer for renters insurance that could help reduce the cost of your premiums?
In determining our ranking of the best renters insurance companies, we looked at eight popular companies and ranked them according to a series of weighted factors we consider critical to the consumer. We did not evaluate all companies in the category.
FinanceBuzz ranking criteria include:
- AM Best rating: Companies were scored higher for having a better AM Best rating.
- J.D. Power ranking: Companies were scored higher for ranking highly on J.D. Power’s Home Insurance Study.
- NAIC complaints: Companies with fewer complaints than the national median scored higher.
- Customer experience: Companies were scored higher if they had online options for getting a quote, buying a policy, and filing a claim as well as a variety of ways for a customer to communicate with them.
- Coverage options: Companies scored higher if they offered identity theft insurance, allowed you to buy coverage for higher-value items, and offered coverage for water and sewer back-ups.
- Cost: Companies were ranked according to premiums.
FAQs about renters insurance
Is it better to have lower or higher deductible renters insurance?
It’s not better or worse to have a lower or higher deductible with your renters insurance. You may save money on your monthly premiums with a higher deductible, but you will also have to pay more out-of-pocket if something happens and you have to file an insurance claim.
Is renters insurance really worth it?
Yes, renters insurance is worth it. The average cost of renters insurance premiums is between $15 and $30 per month, which is relatively low compared with the value you’ll get if you ever have to use it. The Insurance Information Institute estimates that one in 20 insured homes has a claim each year. The average property damage claim amounts to about $13,804, whereas the average liability claim was about $23,611.
What is the difference between renters insurance and homeowners insurance?
The main difference between renters insurance and home insurance is that renters insurance doesn’t cover the actual structure that you live in. Your landlord’s insurance covers that. Otherwise, both renters and homeowners insurance provides protection for your personal property and liability.
If you're interested in homeowners insurance, check out our list of the best home insurance companies.
Renters insurance offers an affordable option to provide you with peace of mind knowing that your belongings have some protection if anything ever happens to your rental home. It also helps to protect you if someone is injured in your home or if you have a mishap that damages the homes of the neighbors around you.
There are many insurance companies that offer renters insurance and the policy coverages differ from one insurer to the next. So it's a good idea to make an inventory list of your belongings and consider the kind of coverage you need before you start shopping around for the best policy that offers you just what you’re looking for.
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