COVID-19 Update: If you're thinking about renters insurance in the context of coronavirus, see below for information.
Renters insurance is a cost-effective way to protect your personal property against the threat of damage or theft. It also secures you against the costs of legal liability in certain situations. The lowest price for renters insurance we found was $17 per month, or an annual payment of $205 per year.
You can get renters insurance from both major insurers such as State Farm and newer startups such as Lemonade, but the right fit depends on what you want out of a policy. Our recommendations highlight companies that fit a variety of preferences ranging from great customer service to quick and easy coverage.
Most affordable renters insurance rates: State Farm
- A.M. Best Rating: A++ (Superior)
- J.D. Power Rank: 2nd of 14 insurers
- Unique Value: Best rates and nationwide availability
If cost is your main concern as a renter, State Farm's consistently cheap renters policies are a great choice. In addition, its national presence and great reviews suggest that State Farm customers also enjoy access to well-regarded great customer support.
State Farm also gives renters many ways to customize their coverage. In its online quote form, you can not only adjust your coverage limits but also add endorsements for specific high-value belongings. The form also runs you through a few questions that are used to identify any State Farm discounts you qualify for.
Best customer service: American Family
- A.M. Best Rating: A (Excellent)
- J.D. Power Rank: 1st out of 14 insurers
- Unique Value: Industry-leading customer satisfaction
If you've ever had to go back and forth with an insurance company over a problem, you'll understand the value of an insurer like American Family. Also known as AmFam, this company came out on top of the 2019 J.D. Power rankings for overall satisfaction among renters insurance providers.
AmFam's high reputation is rooted in its user-friendly approach: It scored well in areas like the billing process, transparency of policy information and service interactions. On top of that, AmFam's standard renters policy comes with replacement cost coverage, which means you'll have enough to replace any lost or broken possessions with new items of a like kind.
Best mobile app experience: Allstate
- A.M. Best Rating: A+ (Superior)
- J.D. Power Rank: 5th out of 14 insurers
- Unique Value: Mobile apps for bills, claims and documenting property
While we expected a startup to lead the way in new technology for delivering renters insurance, we found insurance giant Allstate at the head of the pack. Renters insured by Allstate have access to two key mobile apps. Allstate Mobile lets you pay bills, file claims and review coverage information, while Digital Locker offers a way to store photos of your personal possessions in the event that you ever need to make a claim.
No other insurers we've reviewed offer Allstate's level of digital convenience for renters. Uniquely, Allstate also allows you to adjust coverage limits in order to fit your needs and budget. For instance, you could opt out of off-premises theft protection, which can save about 22% on your annual premium.
Best for quick coverage: Lemonade
- Demotech Financial Stability Rating: A (Exceptional)
- J.D. Power Rank: Not included
- Unique Value: Adjustable coverage limits and rapid claims payouts
If you’re looking for quick renters insurance coverage, you probably won't find a company with a process smoother than Lemonade's. Downloading Lemonade's app, getting a quote and paying to start coverage takes only a matter of minutes. The company achieves this by replacing the traditional agent experience with an artificial intelligence bot named Maya.
Lemonade is usually among the cheapest options available, which adds to the company's value for consumers. Active users also gain the advantage of being able to adjust your coverage limits from month to month as needed. As for claims, Lemonade says that 25% of claims on its platform are paid in three seconds. This is far, far faster than most traditional claim processes.
As a newcomer to insurance, Lemonade is only available in 26 states and Washington D.C. However, the list has been expanding sporadically.
- District Of Columbia
- New Jersey
- New Mexico
- New York
- Rhode Island
Best for renters in the military: USAA
- A.M. Best Financial Strength Rating: A++ (Superior)
- J.D. Power Rank: Score tied for 1st of 14 insurers
- Unique value: Military-only rates and service on all products
USAA enjoys a well-earned reputation among the U.S. military community, and its benefits extend to renters. It offers affordable renters policies that include replacement cost coverage and protection against floods, earthquakes, windstorms and lighting — perils which are almost always excluded from renters insurance at other companies.
USAA's familiarity with the unique needs of military members only adds to its value. For example, USAA’s renters insurance policies provide deductible-free coverage for lost military uniforms. And once you decide to buy a home or a new car, USAA's broad stable of financial products gives you access to the same quality of service in those areas too.
Comparing the cheapest renters insurance companies
While price isn't the only factor in choosing the right insurance, it's obviously one of the most important. To give you a baseline idea of what to expect, we've compared renters insurance rates from five of the biggest insurers for 12 months of coverage. If you're determined to find the cheapest provider of renter's insurance, make sure you compare quotes for your address.
Comparison of renters insurance rates from largest property insurers
Average annual premium
Number is an average of rates across the 10 most populous states with data availability: California, Texas, New York, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina and New Jersey
State Farm offered the most affordable renters insurance among the five major insurers, with an average annual premium of $205. The country's leading property insurer had the cheapest renters insurance policy in five of the 10 states we surveyed, with Texas the only state in which it ranked worse than second.
With an average annual premium of $233, Liberty Mutual wasn't far behind State Farm. Given the minimal difference in rates, it's definitely worth getting a second quote from Liberty Mutual if you're looking for an affordable renters insurance policy.
Nationwide had an average annual premium of $338, quite a bit more than State Farm or Liberty Mutual. The only state where Nationwide had notably cheap rates compared to its competitors was Texas, where it ranked second of the five insurers.
Farmers ranked as the second priciest insurer with an average annual renters insurance premium of $343. However, quotes from Farmers showed more variation than usual: In California, Michigan and New Jersey, its rates ranked among the cheapest. This makes Farmers worth checking out just in case it's affordable for your area.
Allstate's renters insurance quotes were the most expensive in our sample, with an average annual premium of $367. Though we recommend Allstate for its excellent digital experience, the numbers suggest that you should make sure to compare its rates against other options before you commit.
Why renters should care about more than premiums
Renters insurance is meant to protect you against large expenses, like having to replace all of your personal items. This makes coverage limits a huge consideration. Cheap policies might not always be worth the savings: Renters insurance only costs an average of $187 per year, while having insufficient coverage can cost a renter thousands.
A slightly more expensive policy that offers coverage better-suited to your needs can often be worth the extra cost.
For example, one policy might be more expensive but also more attractive to a renter, because it includes a higher coverage limit for their jewelry collection. Simply put, paying a few more dollars per month might be worth it if you ever have to file a claim.
What does renters insurance cover?
All renters insurance policies include three main coverages. Choosing higher limits for these coverages will give you more protection, but will also increase your total premium.
Personal property coverage reimburses you if your personal belongings are damaged or stolen by a covered peril. This is the bedrock of any renters insurance policy. You'll want a personal property coverage limit of at least the total value of your belongings. The average two-room rental holds possessions totaling $30,000 in value.
Personal liability coverage covers the legal costs of being found liable for property damage or bodily injury. A standard renters insurance policy covers you for up to $100,000 in legal liability coverage, but coverage levels of up to $500,000 usually cost just a few extra dollars per month.
In our view, the standard $100,000 coverage limit is generally sufficient, but there's no guarantee it will be enough. If someone sustains a significant injury at or near your unit and it's determined that the injury is due to your negligence, you could be on the hook for far more.
Additional living expenses (ALE) coverage, also called loss of use coverage, funds expenses that occur when you're forced to leave your home due to a fire or other covered event. ALE covers your costs of living elsewhere — such as a hotel — up to policy limits. Loss of use coverage limits are usually set as a percentage of your personal property coverage limit.
Beyond these standard features, many renters insurance policies have optional coverage features that can guard you against other unexpected and costly events. These may include:
- Water backup coverage
- Identity theft coverage
- Coverage for earthquakes and sinkholes
If you live in an area more vulnerable to particular disasters, or if you're concerned about less common risks such as identity theft, paying extra for these additional coverages can make sense.
How to save on renters insurance
Carriers provide a number of ways for you to save on your renters insurance premium. Raising your deductible will lower your monthly bill but costs you more in a claim situation. On the other hand, qualifying for policy discounts often helps reduce your costs with no downsides.
Renters insurance deductibles
A deductible is the amount of money you must pay when you file an insurance claim. Higher deductibles mean less protection and lower costs, while lower deductibles lead to more protection and higher rates.
You file a claim for $6,000 in property damage due to vandalism, and your policy has a $500 deductible. Your insurer will send you a check for $5,500: the value of the claim minus the value of the deductible.
If you had chosen a higher deductible — say $1,000 — the amount on your check would have been only $5,000. Ultimately, choosing a deductible comes down to your preference for risk: You either save money on your premium or save money on any potential claims.
Renters insurance discounts
Many insurers provide discounts for those customers who take safety precautions in their homes, or for those who buy multiple insurance policies.
Tenants who have installed safety devices in their apartment or home, such as smoke and burglary alarms, are considered lower-risk policyholders, and will often receive discounts on their policies.
When you shop for renters insurance, consider whether you have any devices that could qualify you for discounts. If you're shopping for multiple policies, buying them all from the same provider may save you money on all of them. However, you should still compare prices across insurers: There is no guarantee that bundled policies with a single insurer will be cheaper than individual insurance policies from separate insurers.
Compare cheap renters insurance options near you
How we chose the best renters insurance companies
While there might not be one renters insurance company that fits everyone's needs, evaluating what’s most important to you can help you narrow down your decision and select a company that makes the most sense.
We compared renters insurance companies across three primary categories: rates, reviews and ratings, and financial strength.
- Rates: Since renters insurance varies widely depending on a multitude of factors, namely your place of residence, we searched for companies that consistently offered low rates. Regardless, you’ll want to compare your renters insurance rates to national and state averages to ensure that you’re receiving competitive rates.
- Reviews and ratings: How a company is reviewed and rated is very telling of its claims process. You’ll want an insurance company with great reviews and ratings so that if you ever need to file a claim, you’ll have peace of mind knowing that your company has a strong track record of on-time payments.
- Financial strength: Your renters insurance policy is only as good as your insurance company’s ability to meet your claims. A company with a great financial strength rating is unlikely to have trouble meeting any claims payment.
Who has the cheapest renters insurance?
Besides taking a look at the best renters insurance providers, we've also compared the most budget-friendly companies we could find. We've noticed that the cheapest rates are often found at newer online-based startups such as Lemonade, which offers a convenient experience through its site and mobile app. You can find out more about cheap renters insurance options here.
Why does my landlord require me to get renters insurance?
Landlords often require their tenants to get renters insurance because it makes it less likely that tenants will seek compensation from the landlord in the event of property damage or liability. Renters insurance covers a tenant's personal belongings as well as providing for medical payments to others that get hurt in the apartment, so it's a useful first line of defense for both the renter and the landlord.
How much is the average renters insurance per month?
On average, a renters insurance policy can cost about $16 a month. This is based on typical coverage limits of $30,000 in personal property and $100,000 in personal liability. Depending on how much coverage you need and where you live, you may end up paying more than average for renters insurance.
The impact of coronavirus on your renters insurance
ValuePenguin has taken an prolonged look at how the effects of coronavirus will cascade to the typical renter. Your renters insurance likely won't be affected by the virus: Policyholders are likely to see the biggest changes to the way they pay their premiums and make claims.
Because COVID-19 has forced many types of companies to conduct their day-to-day operations remotely, it's not likely that an adjuster would visit your property. In most cases, your insurer require you to submit claims electronically. You'd have to utilize photos and videos to perform the same functions as a conventional adjuster to make a claim.
Many renters insurance companies are waiving fees and cancellations for late payments for policyholders affected by the coronavirus. Additionally, many states have discontinued evictions during the course of the health emergency — though these measures vary by state. Importantly, no state has excused rent outright. This means you'll still have to pay any rent you don't pay during this crisis in the future.