Best renters insurance companies: 2018

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When it comes to renters insurance, USAA, Chubb, Allstate, AIG and Esurance are top of the heap according to Insure.com’s recent customer survey ranking the best renters insurance companies.

Insure.com commissioned a survey of more than 3,700 insurance customers nationwide and analyzed customer ratings for 15 leading companies in the rental, home and condo insurance category. Only current customers of the insurers on our lists were surveyed.

We examined six factors:

• Value for the price
• Customer service
• Claim satisfaction
• Website and app ease of use
• Recommendation – How likely a customer is to recommend their insurer
• Renewal – How likely they are to renew with the same insurer

Who has the best renters insurance?

USAA was the overall No. 1 ranked renters insurance company. USAA consistently ranks at the top of customer satisfaction surveys (they topped the latest J.D. Power survey as well). Unfortunately, unless you are a military family or direct relative of a military member, USAA is not available to you.

Luckily, there are plenty of other insurance companies that ranked very well in our survey.

Renters insurance is a very affordable protection that is often overlooked. According to a 2015 Insurance Information Institute (III) poll, only 40 percent of renters had a renters insurance policy in place, compared to 95 percent of homeowners who carry homeowners insurance.

A Rent.com survey found that younger renters were even more likely to ignore the need for protection with 72 percent of renters under 25 years old foregoing a policy. Older renters were slightly better with 51 percent carrying a policy.

This can be a major mistake, as severe weather, a fire, or even an upstairs neighbors overflowing tub can cause major damage to all of your possessions. If you are uninsured, you will be on the hook to replace all of your property.

“Renters insurance may be the most overlooked, yet necessary, insurance coverage type. Renters often make the false assumption that, since they don’t own the property, they don’t need insurance. However, many renters keep some of their most valuable assets, such as jewelry, furniture, musical instruments, computers, and clothing in their rented space,” advises Kent Thune, insurance analyst with FitSmallBusiness.com.

Replacing your property isn’t the only protection that renters insurance brings to the table. Liability protection is another major benefit of renters insurance.

“Renters need liability protection for personal situations, such as getting into an argument with someone, or a guest tripping and falling warns Scott Johnson with Marindependent Insurance Services in Marin County, California.”While many renters think they can’t be sued because they don’t own a house, this is completely untrue. Because many renters are saving money to buy a house and have assets sitting in a bank, they actually need liability insurance even more than many homeowners.”

How much is renters insurance a month?

Rates for renters insurance have been fairly stable for a number of years and it is a real bargain right now.

Rates vary based on coverage amounts, the renter’s credit history, and where they call home but based on an Insure.com rate analysis, the national average for a renters policy is a very affordable $197 a year or roughly $17 a month. Prices in South Carolina, Pennsylvania and Hawaii are about average. Louisiana’s are the highest, at $719 a year. Colorado’s are the lowest, at $103.

These figures are based on coverage levels of $40,000 for personal property, a $1,000 deductible and $100,000 of liability protection.

Best renters insurance value for the price

Our survey found the following insurers were the best value for the price:

• Chubb (ACE INA Group / Ace Limited)
• USAA
• AIG (American International Group)
• Esurance
• Allstate

In addition to claiming the top five spots for value, these five insurers are also the top five overall, making them a great choice for renters coverage.

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Finding the best renters insurance companies

While pricing is always important, it is never a good idea to shop for renters insurance (or any insurance for that matter) on price alone. A cheap policy quickly becomes useless if you have trouble making a claim or contacting someone in customer service.

When searching for the best renters insurance company be sure to examine all of the factors. While Erie just missed the top five (it was number six) when it came to pricing, it dropped all the way down to number 14 in the claim process rankings and number 11 in customer service. Look for an insurer that scores well on all three factors we examined.

Shopping your coverage on a regular basis can help ensure you are getting the best coverage at the best price. While pricing in the renters insurance market is fairly stable, insurance companies rate risk differently which can result in dramatically different premium quotes.

Bundling and discounts are another option to help lower your premium. Renters insurance is often bundled with auto insurance. Grab as many other discounts as possible to push down your rates. According to J.D. Power, roughly 81 percent of renters insurance customers received some type of discount on their policy.

Average cost of renters insurance: Renters insurance quotes by company for each state

Insure.com commissioned Quadrant Information Systems to provide renters insurance rates for nearly every ZIP code in the country from up to six major insurers. The applicant profile is of a married, 35-year-old who has filed no claims in five years. Coverage includes medical payments coverage of $5,000, contents replacement at replacement value and loss of use at 10 percent of personal property limit.

For coverage of $20,000 for personal property, with a $1,000 deductible and $100,000 in liability protection, you can see how major insurers compare on price. Enter your state in the search field to see what you can expect to pay in your location.

For coverage of $40,000 for personal property, with a $1,000 deductible and $100,000 in liability protection, you can see how major insurers compare on price. Enter your state in the search field to see what you can expect to pay in your location.

For coverage levels of $40,000 with a $1,000 deductible and $300,000 in liability, you’ll see that average renters rates are still very affordable. Enter your state in the search field to see how companies compare on price:

How much coverage do you need for renters insurance?

Here are a few final tips to help you find a great renters insurance policy while also saving a bit of money on your premium.

Raise your deductible: While renters insurance is a pretty affordable coverage, if you are struggling to cover your premium it’s better to raise your deducible instead of dumping your policy.

“Go with the highest deductible that you can comfortably afford and look for group discounts through employer groups, credit unions and alumni associations,” advises Kristen Gryglik with Liberty Mutual.

Replacement value or Actual cash value: Renters insurance is available in replacement value or actual cash value and one is definitely better (and more expensive) than the other.

Replacement value policies replace your possessions with one of similar quality, regardless of age or condition. Actual cash value (ACV) policies on the other hand take depreciation into account. While actual cash value policies are cheaper, you may find yourself disappointed if you have to make a claim.

“I definitely recommend replacement cost policies, with replacement value, if your TV is 10 years old and you have a loss you can buy a new TV, regardless if it costs more than you current TV. ACV policies only pay the value of your items at the time of the loss,” explains Gryglik.

Umbrella policies offer additional protection: Adding a personal umbrella policy will push up your liability limits at a very affordable price. Umbrella policies are usually sold in $1 million increments and for the amount of protection they offer an umbrella is a real bargain.

These policies are great for dog owners. Dog bites can result in major medical bills and a lawsuit is always a possibility if Fido grabs ahold of a guest.

“The most common suits I see related to renter’s insurance are dog bite lawsuits. This is becoming increasingly common with more pet adoptions and pet-friendly apartments being built. Many attacks occur in apartment complex dog parks, and liability almost always falls exclusively on the dog’s owner,” warns Eric Ramos, a personal injury lawyer in San Antonio, Texas.

Always choose the right personal property and liability limits: 

The personal property section of your policy pays to replace lost, stolen or damaged items you own. Typically you can choose pay out amounts of $20,000 to $100,000. Because renters insurance is affordable, it’s recommended you get at least $40,000 but if you have a lot of valuable possessions $100,000 is best.

In addition to protecting your possessions, a renters insurance policy also offers liability coverage. Liability covers the cost for injuries if someone trips, falls or is hurt in your apartment. It also pays for lawsuits a guest may file against you after an accident you’re at fault for.

The amount of liability protection that’s right for you depends on the value of your personal assets but most experts recommend $300,000 liability limits.

“The bare bones that I typically offer are $100K in personal property replacement coverage and $300K in liability,” says Johnson.

If you can afford more, get it. Liability is a very affordable coverage and can be a financial lifesaver if someone is seriously injured in your home. The cost of a lawsuit can quickly spiral out of control, putting all of your assets at risks.

“Just because you are renting doesn’t mean you don’t have assets to protect, IRAs, 401Ks, and many other investment accounts could be at risk in a lawsuit against you,” warns Brad Goldsberry with the Nate Bingel Agency in Northglenn, Colorado.

Sharing a policy with a roommate: Despite the fact that most insurance companies do allow roommates to share a renters policy, most agents frown on the practice.

“We don’t recommend roommates share a policy unless they are related or engaged, says Gryglik. “If a claim is filed on the policy it will be on your claim history for three to five years, regardless of who filed the claim.”

If your roommate ends up making numerous claims on the policy you could end up paying higher premiums for renters (and other types of insurance) long after you have moved out.

If you choose to ignore our advice and end up sharing a policy with a roommate be sure to have a serious conversation about the details of the policy, the cost and how any claims will be handled.

Cap on valuables: Most renters insurance policies will put a maximum cap on high-value items such as artwork, wine, jewelry and other collectibles. This amount will vary between insurance companies but $1,500 is pretty typical. If you have lots of high-value property you may need a rider to be fully protected.

Mark Vallet

Contributing Researcher

 

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Mark is a freelance journalist and analyst with over 15 years of experience covering the insurance industry.

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