The Best and Cheapest Renters Insurance Companies

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A renters insurance policy can offer significant financial protection to a renter. Comparing multiple insurers can help shoppers find both the best and cheapest renters insurance policy for their situation.

Whether someone is a brand-new renter or has rented for years, finding both the best and cheapest renters insurance can offer additional peace of mind and financial protection. Renters insurance covers personal property in the event it’s damaged or destroyed by a covered event, such as a fire or a burglary. It also provides liability coverage for the policyholder in the event they or their pets are found to be responsible for damage or injury to a third party. Additionally, it provides medical payments to others, which can help cover some of the medical expenses if a guest is injured in their home, regardless of fault. In extreme cases, when a renter is displaced from their property because of fire or another covered loss that leaves the home uninhabitable, the policy can cover living expenses while the damage is repaired.

Before researching how to get renters insurance for the lowest price possible, renters will want to bear in mind that the cheapest renters insurance doesn’t necessarily mean the best value. The rankings below are intended to reflect the best value for policyholders, including price, amount of coverage, and overall customer experience. All of the companies listed offer affordable premium options for renters insurance, but the rankings are based on overall value.

BEST OVERALL: State Farm
RUNNER-UP: Allstate
BEST EXTENDED COVERAGE: Farmers Insurance
BEST FOR SERVICE MEMBERS: USAA
ALSO CONSIDER: Lemonade

The Best and Cheapest Renters Insurance Options — Photo: istockphoto.com

What to Consider When Choosing Among the Cheapest Renters Insurance Companies

No matter where a rental property is located, from a small town to a large city, or what type of dwelling it is, whether an apartment or a single-family home, renters will want to keep in mind that not all renters insurance policies are the same. Each provider operates in a different way, from how it handles a claim to the types of customer service options it offers. After a renter has narrowed down a list of potential renters insurance companies, it’s important for them to ensure the provider offers coverage in the area where they live and determine the amount of coverage they need. In addition, they’ll want to check on policy options, costs, deductibles, and other available add-ons to select the most appropriate provider.

Coverage Area

Not all insurance providers offer renters insurance in every state. There may be cases where coverage is offered within a state or listed as nationwide renters insurance, but it may exclude certain ZIP codes. When it’s time to compare renters insurance companies, one of the first steps for a renter to take is to verify coverage is extended to the exact location of the rental property. If coverage is not available, then the company is excluded from the list and the renter can move on to the next option. It’s also critical for a renter to ensure the rental company offers the coverage and policy options they need and that this specific coverage is available in their location. It’s possible for a provider to exclude specific coverages in different states, which a renter will want to keep in mind before selecting an insurer.

Coverage Amount

The amount of coverage a renter needs for their policy is often a top priority. The coverage limit applied to the policy is the maximum amount a renter would receive in a claim (less the deductible), which means it needs to be robust enough to offer adequate protection in the event of a loss. Personal property coverage is designed to offer protection in the event a renter’s personal property is stolen, damaged, or destroyed by a covered peril (or event). For that reason, it’s important to determine whether the coverage amount a renter selects is enough to replace all of their personal property in the event of a total loss. Renters will want to take note of these coverage limits to ensure that the policy provides enough coverage so they aren’t left paying out of pocket to replace personal property.

Insurance Premiums

When shoppers are considering affordable renters insurance options, cost is certainly a major factor. Insurance premiums are the amount the policyholder has to pay to maintain the policy and receive coverage. Insurance premiums can often be paid on a monthly or quarterly basis, although some insurers may require an entire year of payment up front. If budgeting is a concern, the renter will need to confirm the insurance provider offers payment schedules suitable to their needs before they make a final selection.

The cost of insurance premiums are influenced by a variety of factors. The property location, coverage amounts, and any policy add-ons are a few aspects that can impact premiums. When looking for the cheapest renters insurance, it’s crucial for a renter to provide the same information for each renters insurance quote they request from different providers. This ensures the renter is truly comparing apples to apples when considering each provider.

Policy Options

Another critical consideration renters will want to take into account when looking for cheap renters insurance is understanding the policy options from the insurer. Certain elements such as personal property coverage, liability, and loss of use coverage are included in every policy. But policy options, or add-ons, are offered above and beyond the basic policy and can provide additional value to the policyholder. These options vary from provider to provider, which means the renter needs to understand what an insurer can offer in the way of add-on coverage and whether they need this additional protection.

Examples of common add-on coverages include the following:

Scheduled personal property coverage: This type of additional coverage is designed to provide coverage for belongings that aren’t fully covered or have coverage limits under a standard renters insurance policy. Examples include expensive jewelry, antiques, musical instruments, and art collections.
Replacement cost coverage for contents: Most standard renters insurance policies cover a renter’s personal property at actual cash value, or the depreciated cost of the items. A renter may want to opt for replacement cost coverage instead, which covers the cost to replace lose or damaged property at today’s prices, allowing a renter to replace damaged or destroyed items with like ones.
Earthquake coverage. Renters who live in areas at a high risk for seismic activity, such as California, may want to add earthquake coverage to their renters insurance policy if it’s offered. This can help protect them in the event an earthquake destroys or damages their belongings.

Quote Process

It is beneficial for a renter to obtain multiple quotes when searching for the best companies for renters insurance. Not only does it offer a more accurate picture of how much insurance premiums will cost for a specific property, but it also offers renters a glimpse of what it’s like to work with an insurer. Some providers offer the entire quote process for renters insurance online, while others require working with an agent either over the phone or in person. Some providers may offer an option to speak with someone in customer service if there are questions throughout the quote process, and this may be a consideration for renters when choosing the best company for the cheapest renters insurance.

Claims Process

Filing a claim doesn’t have to be a long, drawn-out, or difficult process, and some providers offer more ways to expedite a claim versus others. Since each insurer approaches claims in its own manner, it’s worth a renter finding out the claim-filing options for each provider in case they ever need to make a claim. Some insurers allow policyholders to file claims online or through a mobile app. This allows the renter to fill out the necessary paperwork and submit supporting documents, photographs, videos, and other evidence without ever having to pick up the phone. Other providers have local agents that a renter can work with, which some renters may prefer as it allows their questions to be answered directly and makes for a smoother process.

Deductibles

Selecting a deductible amount is an important part of selecting a renters insurance policy, and most insurers offer multiple options. A deductible is the out-of-pocket amount the policyholder would be responsible for if a claim is filed. This amount is deducted from the amount the insurance company pays the policyholder. For example, if a renter has a $500 deductible and files a $3,000 claim, the insurer would pay $2,500, which accounts for the $500 deductible.

Increasing a deductible often leads to lower insurance premiums, which makes sense since the policyholder would be shouldering more of the cost in the event a claim is filed. However, if a renter selects too high a deductible and has a significant claim, the out-of-pocket expense can substantially impact the renter’s budget. Renters will want to weigh the benefits and risks of a low or a high deductible when determining the right renters insurance policy.

Additional Policies

Anyone who is searching for the cheapest renters insurance may want to consider pairing a renters insurance policy with another type, such as auto, life, or even boat or ATV insurance. Insurers often offer substantial savings for policyholders who bundle more than one policy with the same company. Plus, it can offer a more convenient solution, since the policyholder only has one provider to work with rather than several when it comes to making payments, managing claims, or using a mobile app.

Discounts

Another differentiating factor for renters to consider when it’s time to compare renters insurance quotes is which provider offers the most valuable discounts. Discounts can help renters save money on insurance premiums and can turn an otherwise expensive policy into a more affordable option. Discounts vary from one provider to the next, but common ones include the following:

Bundling discounts for renters with multiple policies under the same provider;
Paperless billing discounts for customers who opt to receive their statements electronically;
Loyalty discounts for renters who hold a policy for a certain number of years; and
Protective devices discounts for customers who install certain safety and security equipment in their home, such as smoke alarms or one of the best home security systems (such as Vivint or ADT).

Before selecting a provider, the renter can assess the variety and value of the discounts offered to see if they are significant enough to make an impact on renters insurance cost.

AM Best Rating

AM Best ratings are often referred to by insurance providers, but not everyone is familiar with these ratings. AM Best is a credit-rating agency that is considered one of the most reliable sources for evaluating an insurance provider’s financial strength. The agency provides a rating, or grade, that falls between A++, which is the highest rating (Superior), and D (Poor). Any provider with a rating of B+ (Good) or higher should give a renter more confidence in the financial stability of the company. These ratings are a way for a renter to evaluate a company quickly so they can get a better idea of a company’s ability to pay out claims.

Our Top Picks

Renters looking for the best value among cheapest renters insurance companies will want to consider the features, benefits, and disadvantages that will have the biggest impact. While cost is extremely important, considering all the offerings of a renters insurance company can help shoppers narrow down the decision. The following companies have a great deal to offer many renters.

Best Overall

State Farm

Coverage area: 50 states and Washington, D.C.
Personal property coverage amount: Up to $110,000
Sample monthly rate: $21
Quote process: Online, phone, agent
Claims process: App, online, phone, agent
Deductibles: $500 to $2,000
AM Best rating: A++

Pros

High $1 million personal liability coverage available
Relatively high $10,000 medical payments to others coverage available
Inflation-adjusted coverage limits
A++ AM Best rating

Cons

Limited discount opportunities

Why It Made the Cut: State Farm offers up to $1 million in liability coverage—a very high limit for this type of insurance—plus a suite of digital tools, including a convenient mobile app. State Farm offers renters insurance in all 50 states and Washington, D.C., and offers renters a choice of working with an agent over the phone, in person, online, or through a mobile app. A standard renters insurance policy from State Farm offers up to $1 million in liability coverage, which is a standout figure when it comes to renters liability insurance. Additionally, State Farm offers a relatively high medical payments to others coverage limit of $10,000. These high coverage limits can be appealing to renters who want adequate coverage in the event they’re found liable for third-party damage or injuries or for those who want to be sure they’re protected if a guest is injured in their home. State Farm’s Superior A++ AM Best rating can help renters feel comfortable that their insurance provider will be able to pay out claims in a timely manner. Although State Farm offers relatively few discounts, the cost of coverage may be worth it for renters concerned about inflation, as State Farm automatically increases a policyholder’s coverage limits each year. This, paired with the high available coverage limits for liability and medical payments to others coverage, makes State Farm a solid choice for renters looking for an affordable policy.

Runner-Up

Allstate

Coverage area: 50 states and Washington, D.C.
Personal property coverage amount: Up to $150,000
Sample monthly rate: $22
Quote process: Online, phone, agent
Claims process: App, online, phone, agent
Deductibles: $250 to $1,000
AM Best rating: A+

Pros

Low $250 deductible available
Up to 25 percent discount for retirees 55 and over
Ability to bundle multiple policy types
Many free online informational resources specifically designed for renters

Cons

2 months of payments due up front

Why It Made the Cut: Allstate offers a wide range of deductible options and discounts, which could make it easier for renters to budget. Allstate has a relatively low deductible option of $250, which makes it ideal for renters who would prefer not to pay a larger amount upon filing a claim. Renters can save money up front as well by taking advantage of Allstate’s discounts, which include bundling discounts for renters who also have vehicle or life insurance through the provider, and a discount of up to 25 percent for renters ages 55 and up. Upon taking out a policy, renters will be required to pay 2 months’ worth of premium up front, which may be off-putting to some customers. However, Allstate’s relatively affordable sample monthly rate of $22 means this up-front cost will not be as high as a renter might think. As an added bonus, Allstate offers numerous educational resources on its website to help renters learn more about exactly how their renters insurance policy works, what it covers, and what is typically excluded from coverage.

Best Extended Coverage

Farmers Insurance

Coverage area: 42 states
Personal property coverage amount: Up to $150,000
Sample monthly rate: $22
Quote process: Online, phone, agent
Claims process: Online, phone, agent
Deductibles: $500 to $2,500
AM Best rating: A

Pros

Relatively high $1 million personal liability coverage available
High loss of use coverage up to 100 percent of personal property limit available
Lengthy 24-month loss of use coverage available
Helpful personal property calculator

Cons

Limited extra endorsements

Why It Made the Cut: Farmers Insurance offers high loss of use coverage and high personal liability coverage options, making it a valuable option. Farmers Insurance may offer some of the cheapest renters insurance premiums, depending on the coverage options a renter selects. Renters who are concerned they or their resident family members or pets may be found liable for third-party damage or injury will appreciate Farmers’ available $1 million personal liability coverage, which is a relatively high amount. Although Farmers Insurance doesn’t offer a wide range of extra endorsements to help renters expand their coverage, the company does have a personal property coverage limit of up to $150,000, which can help give renters peace of mind that they would likely be able to repair or replace their belongings if they were damaged or destroyed by a covered event. A renter can use Farmer Insurance’s handy personal property calculator to determine if this coverage amount is adequate. Additionally, Farmers Insurance has a relatively high loss of use coverage of up to 100 percent of the personal property coverage limit, which may appeal to renters concerned that they may be unable to cover any additional living expenses if their home was severely damaged by a covered event and they were required to temporarily relocate. Farmers also offers a renter the option to extend their loss of use time period to 24 months as opposed to the standard 12 months typically offered.

Best for Service Members

USAA

Coverage area: 50 states and Washington, D.C.
Personal property coverage amount: $5,000
Sample monthly rate: $15
Quote Process: Online, phone
Claims Process: App, online, phone
Deductibles: $500
AM Best rating: A++

Pros

Standard flood coverage included
Low renters insurance premiums
Up to 28 percent discount for renters living on a military base
A++ AM Best rating

Cons

USAA membership limited to service members and families
Limited online quote tool

Why It Made the Cut: USAA offers robust coverage for eligible members, including standard flood coverage with every policy—and often with more affordable premiums. USAA provides renters insurance coverage to veterans and active military members and their immediate family members. Although membership is limited to this group, those who do qualify may find USAA offers a wide variety of benefits for a renters insurance policy. These benefits include standard flood coverage with every policy (which is typically an add-on with most renters insurance companies) and a discount of up to 28 percent for living on a military base rather than in civilian housing. Although USAA’s online quote tool is rather limited and doesn’t allow potential policyholders to adjust coverage amounts, renters who do purchase a policy often find the rates to be competitive and lower than average, but without sacrificing quality of coverage. To top it off, USAA earns an impressive A++ Superior rating from AM Best, further highlighting the company’s financial strength and ability to payout claims.

Also Consider

Lemonade

Coverage area: 28 states and Washington, D.C.
Personal property coverage amount: Up to $250,000
Sample monthly rate: $20
Quote process: Online
Claims process: App
Deductibles: $500 to $2,500
AM Best rating: Not rated

Pros

Relatively high $250,000 personal property coverage available
High $50,000 jewelry coverage available
Instant claim approval possible

Cons

Relatively small service area covering 28 states and Washington, D.C.
Relativ

The Best and Cheapest Renters Insurance Companies