We look at market share, J.D. Power and A.M. Best ratings to determine the best renters insurance companies around.
Gotta give it up for renters insurance: People who have a policy are generally pretty happy with it, even if they don’t fully understand their coverage. Per recent J.D. Power ratings, customer satisfaction with homeowners and renters insurance reached an all-time high in 2017. Of course, some companies are performing a bit better than others when it comes to renters insurance, which covers your possessions from damage or loss. (For more on what a standard renters policy does and doesn’t cover, check out our guide).
You can get an idea of how major renters insurers compare to one another in the chart below, which includes their 2017 J.D. Power U.S. Renters Insurance Rating, A.M. Best Rating, and total homeowners insurance (which renters insurance rolls under) market share as of 2017, per the National Association of Insurance Commissioners.
|RENTERS INSURANCE COMPANIES||J.D. POWER RENTERS INSURANCE RATING||A.M. BEST RATING||MARKET SHARE|
|American Family||Better than most||A||3.23%|
|Auto Club of Southern California Insurance Group (AAA)||About average||A+||0.95%|
|CSAA Insurance Group||About average||A||1.04%|
|Farmers Insurance||The rest||A||5.96%|
|Liberty Mutual||About average||A||6.86%|
|Safeco (a division of Liberty Mutual)||The rest||A||NA|
|State Farm||About average||A++||18.63%|
|The Hartford||About average||A+||1.10%|
|USAA||Among the best*||A++||6.05%|
A.M. Best ratings indicate an insurer’s overall financial health: A++ and A+ are considered superior, while A and A- are excellent. There are five other designations for insurers: good (B++, B+), fair (B, B-), marginal (C++, C+), weak (C, C-) and poor (D).
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J.D. Power results are listed by designation: among the best; better than most; about average; and the rest. There’s also an overall winner. Overall performance is calculated on a 1,000-point scale that accounts for policy offering, price, billing, interaction and claims. The top three renters insurance companies by numerical score are:
While J.D. Power and A.M. Best ratings can tell you a lot about a company and how it treats its customers, the best renters insurance policy for you is one that provides the coverage you need for your specific situation. A licensed representative from Policygenius can help you compare renters insurance policies and quotes until you find a policy that works for you.
It’s worth mentioning that cheap renters insurance isn’t necessarily the best renters insurance for you. Bargain price policies are generally actual cash value renters insurance, which covers what the item is worth today, not how much it cost when you bought it. That coverage is less robust than replacement cost renters insurance, which covers the cost of replacing the item at the time of a claim, no depreciation considered. If you don’t have a lot of stuff and/or high-priced possessions, an actual cash value renters policy might suffice. If you do, well, it might not.
No matter what policy you opt for, you’ll want to make sure you have adequate coverage. Renters insurance typically has two types of limits: You’ll have overall coverage amounts for possessions and liability and individual limits for categories of stuff that carries a high price tag, like jewelry or electronics. Learn how to calculate how much renters insurance you need.
The three most important things to look for when comparing renters insurance policies are:
There are a lot of ways to modify your coverage to make sure you’re getting the coverage you want in the amount you need, and most renters insurance companies will be offer similar options. Nevertheless, the biggest changes you’ll see between insurers is the price, with some options commanding a higher price at one carrier than they would at another.
Unless your renters insurance is an all-peril (or all-risk) policy, your coverage is limited only to damage and loss caused by one of the policy’s covered perils. These will be thoroughly outlined, complete with the occasional caveat about when a given peril doesn’t apply. Your best renters insurance policy is one that covers perils unique to your area without charging you more, such as water damage caused by rain if you live in a rainy area, or windstorm damage caused by tornadoes if you live somewhere prone to them.
Where you live can make a big difference in which renters insurance company you choose. If you live in area with a lot of crime, you need to make sure that the theft and vandalism perils are robust enough to cover your belongings in every circumstance. Likewise, if you live along a fault line, check if your carrier offers earthquake coverage or if you need to purchase a rider.
Riders enhance the terms of the basic renters insurance policy by adding coverage in more situations and higher limits of coverage. Some of the most common riders add coverage for floods and earthquakes, which are typically excluded perils.
Another important rider is the scheduled property rider, which allows you to add belongings to your coverage that may be excluded (such as an antique) or to increase coverage for belongings that are included but which are subject to a low limit of liability.
If you work from home, you may need to get a rider to cover any property that you use for business. When you shop around for policies, check to see how much coverage you can get for business property in your home, and whether the insurance company will let you purchase a rider to get full coverage for that stuff.
Renters insurance companies usually offer discounts for installing certain safety features in your home. Having a smoke detector or a fire extinguisher can result in a small discount, as can installing deadbolt locks and burglar alarms.
Larger insurance companies that offer multiple types of coverage may allow you to bundle your renters insurance with your auto insurance coverage, allowing you to save a little on both.
The liability protection coverage in your renters insurance policy will reimburse you for any expenses you’re liable for if someone gets injured in your home. Because this is an important coverage to have, you want to make sure you can purchase enough of it. The best renters insurance company for you will allow you to increase your liability coverage without increasing your premiums by too much.
An additional insured is someone living with you who isn’t legally family, like a partner or roommate. Every renters insurance company will allow you to add him or her to your policy, but how much each carrier charges to do so may vary. Note that while family is generally covered automatically (although you should let your insurer know when purchase the policy), non-family people living in your household are not.
Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness. Colin has a degree in English from the University of North Carolina at Chapel Hill.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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