Best Renters Insurance Companies of 2021

Anyone who rents an apartment, condo, townhome, or some other type of rental unit should seriously consider getting renters insurance. Renters insurance covers a renter's personal property if it's damaged or destroyed during a break-in, a storm, or another event specified in the policy. In addition, renters insurance provides coverage for personal liability and medical bills if you have a guest over and they're injured. Finally, if there's a fire or other catastrophic event that forces you to move out of your unit, renters insurance will cover your extra living expenses, such as hotel bills and meals out. None of this is covered by the landlord's insurance policy, which is there to protect the building and the landlord's personal property. As a result, if you don't have renters insurance and something serious happens, you might be on the hook for thousands or tens of thousands of dollars in repair, replacement, and liability costs.

Unlike some other types of insurance policies, renters insurance is relatively simple. But there are some nuances when it comes to selecting a policy and insurance company, which is where this guide comes in. Below, we'll list our top-rated renters insurance companies of 2021 and provide more information on how renters insurance works.

How to Choose the Best Renters Insurance

There are several steps to follow when selecting a renters insurance policy. They include:

For more information, see How to Buy Renters Insurance.

The Top Renters Insurance Companies of 2021

Our top-rated renters insurance companies of 2021 include:

Lemonade: Founded in 2015, Lemonade is among a new crop of online-only startups aiming to disrupt the insurance space. It operates as a peer-to-peer insurance provider, meaning premiums paid by customers go into a community pot that is used to pay out claims. Lemonade advertises its insurance policies at highly competitive rates, starting at $5 a month for renters insurance and $25 a month for homeowners insurance.

USAA: Formed in 1922, USAA now has 12.8 million members. The San Antonio-based company offers a wide range of services, including insurance, loans, retirement planning, and more. Policies from USAA are available primarily to members of the U.S. armed services and their families.

Erie Insurance: Erie Insurance is a 94-year-old company based in Erie, Pennsylvania. It's probably best known for its auto and leisure insurance, but it also offers renters, homeowners, property, life, and business insurance. Erie Insurance sells relatively low-cost insurance in the mid-Atlantic and Midwest regions through 12,000 independent agents.

State Farm: Bloomington, Illinois-based State Farm started out selling auto insurance and now sells renters insurance and about 100 other products. More people have car insurance and homeowners insurance with State Farm than with any other company in the U.S., to the tune of more than 83 million policies and accounts. State Farm has a large network of agents and consistently high customer service ratings.

Allstate: Sears, Roebuck, and Co. President Robert Wood founded Allstate in 1931 as an auto insurance company with mail-order policies. Based in Northbrook, Illinois, the company is the largest publicly held seller of personal property and casualty insurance in the U.S. and has more than 113 million customers worldwide.

American Family: Based in Madison, Wisconsin, American Family offers car insurance, homeowners insurance, and renters insurance, along with life insurance and other types of policies. It has agents in 19 states and serves the entire country through affiliates The General and Homesite. American Family offers a wide selection of renters insurance add-ons, like travel insurance and identity theft coverage.

Nationwide Mutual Insurance: Columbus, Ohio-based Nationwide Mutual Insurance Company is one of the largest insurance and financial services firms in the U.S. It features many types of insurance for individuals and companies, including auto, life, and business insurance, as well as financial products like mutual funds. Nationwide employs some 30,000 people throughout the U.S. and can provide insurance quotes and policies online or through an agent.

Farmers: Farmers Insurance was founded in 1928 and currently sells insurance policies of various types to more than 10 million households. It offers highly customizable policies, as well as discounts for households that have been smoke-free for at least two consecutive years or have an approved security system or fire alarm. Doctors, nurses, engineers, dentists, teachers, police, and firefighters may also be eligible for discounts.

Liberty Mutual: Liberty Mutual started in 1912, is based in Boston, and is one of the largest global property and casualty insurers in the U.S. About 50,000 people around the world work for Liberty Mutual. In addition to renters insurance, it offers auto, homeowners, commercial, workers' compensation, general liability, surety, and commercial property insurance, as well as specialty insurance lines.

Travelers: This is one of the older insurers in the U.S., having been in business for more than 160 years. Travelers, based in New York City, has about 30,000 employees and 13,500 independent agents and brokers in the U.S., Canada, the U.K., Ireland, and Brazil. The company sells property and casualty insurance, business insurance, and bond and specialty insurance.

How Does Renters Insurance Work?

Anyone who rents a home should consider renters insurance. That's because in the U.S. your landlord can't be held financially responsible for damage to your personal property from a fire, a storm, a break-in, or another event or injuries to guests in your unit. The landlord's insurance, if they have any, only covers them and the building in which your unit is located. For this reason, your landlord may require you to get renters insurance before you sign a lease.

Even if renters insurance isn't required, it's a good idea. Renters insurance will cover your personal property, including clothing, electronics, furniture, bedding, sports equipment, and other possessions. Appliances that you own are covered as well (but not those that came with the unit). In addition to property coverage, renters insurance will reimburse your legal and liability expenses if someone other than a family member is injured in your rental property. And it will pay for hotel bills, restaurant meals, and other additional living expenses if you have to move out while your unit is repaired after a covered disaster.

When purchasing renters insurance, don't just focus on price. The company with the lowest premiums might not have the coverage you need or good customer service agents. The Consumer Federation of America notes that good customer service is especially important because it will make the process of filing a claim much easier and more pleasant.

For more information, see How Does Renters Insurance Work.

Do I Need Renters Insurance?

While you're not legally required to have renters insurance, your landlord might require it to protect themselves if something happens to your personal property in a disaster or if you're sued for a personal injury that occurs in your unit. From your landlord's perspective, having tenants with renters insurance provides peace of mind, because the tenants are less likely to involve the landlord in a dispute or try to recover money from them after a storm, a fire, or a robbery.

Even if your landlord doesn't require it, renters insurance is an excellent idea to compensate you for the significant financial losses that can result from a break-in, a storm, a fire, or another event. Additionally, renters insurance is relatively affordable. According to a 2018 survey from the Insurance Information Institute, the average annual renters insurance premium in 2017 was just $180. Compare that to the cost of losing most or all of your possessions or being sued for personal injury if someone gets hurt in your rental unit, and the value of renters insurance quickly becomes apparent. It's one of those things that's best to have, even if you never use it.

For more information, see What Does Renters Insurance Cover?

What Should I Look For in a Renters Insurance Policy?

The first thing to look for in a renters insurance policy is enough coverage to reimburse you for all of your personal property if it’s damaged or destroyed in a storm, a fire, or another covered disaster. To do this, you'll need to take an inventory of all your personal property. Walk through each room of your unit and write down everything you own, including approximate costs. If you have receipts, collect and save them. Note particularly valuable items like jewelry or expensive electronics, as these might require add-on coverage not provided in a standard policy.

In addition to getting the right amount of coverage, you'll have to choose either a replacement cost or actual cash value policy. A replacement cost policy will reimburse you for the cost of replacing your property with comparable new items. By contrast, an actual cash value policy will only reimburse you for the depreciated value. Used items, particularly things like electronics, aren't worth as much as new ones. As a result, although the premiums for an actual cash value policy are lower, your compensation will be lower as well – not enough to purchase new items. The type of policy you choose will depend on how you balance the risks to your property with monthly premium payments.

Lastly, examine a policy's personal liability and additional living expenses coverage to see if they're adequate for your needs. Whether they’re sufficient will depend in part on how likely a guest is to be injured on your property and the probability of having to move out due to extensive damage to your unit.

Other Renters Insurance Companies to Consider

In addition to the companies in our rating of the Best Renters Insurance Companies, here is another company to consider that we previously reviewed:

Methodology

The following describes our 360 approach to researching and analyzing renters insurance companies to provide guidance to prospective consumers.

1. We researched the companies and products people care most about.

U.S. News analyzed and compared a variety of publicly available data, including internet search data, to determine which renters insurance brands Americans are most interested in. We found 15 companies that consumers search for the most and that have a lot of online ratings.

Once we identified these companies, we reviewed their renters insurance policies offered at the time of publication. We compared available coverages from the top renters insurance companies across several criteria, including cost, coverage limits, policy features, and availability. Research shows that these criteria are among the most important considerations to people shopping for renters insurance.

We compared policy costs across different companies using an archetype that, as much as possible, represents a typical American renter: a 33-year-old individual renting a 1,200 square-foot apartment with one other roommate in a building with a local fire alarm and sprinkler system. We built a standard plan that includes property/contents coverage of $30,000, liability coverage of $100,000, and a $500 deductible. We collected quotes from four locations – Chicago; Cleveland; Glendale, Wisconsin; and Indianapolis – to get a better idea of price variations for a standard plan across different areas. We then took the median value of the price quotes we received to create a sample monthly plan cost.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.

U.S. News’ 360 Reviews team applied an unbiased methodology that includes opinions from independent life insurance experts and third-party reviews.

Our scoring methodology is based on a composite analysis of the ratings and reviews published by credible third-party professional and consumer review sources. The ratings are not based on personal opinions or experiences of U.S. News. To calculate the ratings:

(a) We compiled two types of third-party ratings and reviews:

***Please note that not all professional and consumer rating sources met our criteria for objectivity. Therefore, some sources were excluded from our model.

(b) We standardized the inputs to create a common scale.

The third-party review source data were collected in a variety of forms, including ratings, recommendations and accolades. Before including each third-party data point into our scoring equation, we had to standardize it so that it could be compared accurately with data points from other review sources. We used the scoring methodology described below to convert these systems to a comparable scale.

The 360 scoring process first converted each third-party rating into a common 0 to 5 scale. To balance the distribution of scores within each source’s scale, we used a standard deviation (or Z-Score) calculation to determine how each company that a source rated was scored in comparison to the source’s mean score. We then used the Z-Score to create a standardized U.S. News score using the method outlined below:

(c) We calculated the 360 Overall Score based on a weighted-average model.

We assigned “source weights” to each source used in the consensus scoring model based on our assessment of how much the source is trusted and recognized by consumers and how much its published review process indicates that it is both comprehensive and editorially independent. The source weights are assigned on a 1-5 scale. Any source with an assigned weight less than two was excluded from the consensus scoring model.

Finally, we combined the converted third-party data points using a weighted average formula based on source weight. This formula calculated the consensus score for each product, which we call the 360 Overall Rating.

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