How to choose the best renters insurance company for you.
Once you’ve decided that you need renters insurance (or your landlord has told you to get it) your next question is probably, “Where do I get renters insurance?” For some people, the answer is that you get it from the best company that you can afford, though for other people, getting the cheapest price is paramount. There may be other factors that go into your decision. We’re here to help you find the right company for you.
Read on to find out:
There are several ways to buy renters insurance. If you already have either homeowners or car insurance, you can contact your current insurance company to get a quote for your renters insurance policy. You may even get a discount for having multiple policies from the same company.
If you’re starting from scratch, you’ll want to look around and do some research. You can contact renters insurance companies directly to get quotes and then compare yourself. Or you can go through an insurance broker, either on the phone, in person, or online, that can pull quotes from several companies for you.
Policygenius is an online insurance broker, and we can help you figure out how much renters insurance you need and get you free renters insurance quotes.
When you compare renters insurance policies, it’s important that each quote is for the same amount of coverage. Renters insurance is made up of a few different types of coverage: personal property coverage, liability coverage, medical payments, and additional living expenses.
Personal property coverage covers your stuff, while liability coverage covers you in case you get sued because someone hurts themselves at your house or you accidentally hurt someone outside your house (except in a car — that’s what auto insurance liability is for).
Most companies have set coverage amounts for medical payments (covers medical bills if someone hurts themselves or you accidentally hurt them) and additional living expenses (covers hotel or rental costs if you have to vacate your apartment due to damage).
More coverage costs more money, so if you get different coverage amounts quoted from different companies, then it’ll be hard to compare which company is truly a better deal.
Another important thing to check: whether the personal property quote is for actual cash value (ACV) or replacement cost value (RCV). Actual cash value coverage means that, in the event of a loss, the renters insurance company will pay the depreciated value of your possessions. Replacement cost coverage means that the insurer will pay to purchase you a new item.
The difference in coverage can be substantial. For example, it’s the difference between getting a few hundred dollars for your old MacBook and getting a new MacBook. Unless you truly don’t care about your personal belongings, you want replacement cost value insurance, so it’s important when you’re comparing to quotes to ensure that is what you’re being quoted for.
How to decide how much renters insurance coverage is right for you? Our guide for how to make a home inventory is a good place to start.
If you’re strictly interested in the top-rated companies, you’re in luck, because there are several industry-wide rankings that can help you identify the best renters insurance companies.
The two most important ratings are A.M Best and J.D. Power. A.M. Best ratings refer to an insurers overall financial health — imperative if you want to feel confident that they’ll be able to pay you in case of a claim. A++ and A+ are considered superior, while A and A- are excellent. There are five other designations for insurers are “good” (B++, B+), “fair” (B, B-), “marginal” (C++, C+), “weak” (C, C-) and “poor” (D).
J.D. Power calculates its ratings based on a 1,000-point scale accounting for policy offerings, price, billing, interaction, and claims. Ratings are translated to designations, including “winner,” “among the best,“ “better than most,” “about average,” and “the rest.”
Market share — which is the share each company has of the renters insurance market — is also a valuable number for some people to know.
|Renters insurance companies||J.D. Renters Insurance Rating||A.M. Best Rating||Market share|
|American Family||Better than most||A||2.9%|
|Auto Club of Southern California Insurance Group||About average||A+||N/A|
|CSAA Insurance Group||About average||A||N/A|
|Farmers Insurance||The rest||A||5.9%|
|Liberty Mutual||About average||A||6.7%|
|Safeco (a division of Liberty Mutual)||The rest||A||N/A|
|State Farm||About average||A++||19.6%|
|The Hartford||About average||A+||N/A*|
|USAA||Among the best*||A++||5.6%|
Renters insurance prices are based on several factors, but one of the most important is where your home is located. If you live in a high-crime area or an area that is prone to a lot of natural disasters, your rates are going to be higher than if you live in a safe suburb in an area that isn’t likely to see bad storms.
We’ve pulled quotes and found the best renters insurance companies in several major cities in the U.S. to help make the question, “where to get renters insurance?” an easy one to answer, no matter where you live.
And don't worry if your city isn't listed yet, we can help can get a personalized renters insurance quote in just a few minutes.
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.