If you rent your home, having renters insurance could be essential. While your landlord’s insurance policy covers the building itself in which you live, it doesn’t cover your belongings or liability. Having a renters insurance policy could help protect you from unexpected major expenses.
And luckily, renters insurance is relatively affordable. Many renters can expect to spend less than $20 a month for coverage.
If you’re looking for renters insurance coverage, CNBC Select has done some of the work for you and narrowed down several of the best. We picked Lemonade as a top choice for fast, easy coverage available online in minutes.
Lemonade Renters Insurance
Cost
Starts at $5/month; premium depends on the coverage amount you choose
Maximum coverage
Not disclosed
App available
Yes
Policy highlights
Standard policies include personal property damage, personal liability, temporary living expenses, medical expenses for guests
Option add-ons
Extra coverage for jewelry and other valuables, no-deductible claims, coverage for accidental damage and mysterious loss
Terms apply.
Here’s what you need to know about renters insurance before you buy a policy.
How renters insurance works
Renters insurance policies are helpful in three ways: repairing or replacing your belongings if damaged, paying for living expenses if you’re displaced, and covering damages to others.
The most well-known facet of renters insurance is its ability to help you repair or replace your belongings if they’re damaged due to a covered reason, like a fire or theft. This can include your furniture, clothing, electronics and more. These expenses add up quickly, and renters insurance can help you make sure you’ll be able to afford the replacements if something happens in your home.
Renters insurance can also help cover your additional living expenses (ALE) if your rented home becomes uninhabitable due to a covered reason. Your renters insurance policy can cover things like hotel expenses, food costs, and even long-term rentals.
Finally, renters insurance can also cover your liability, including bodily injury or property damage done to others. For example, if a friend comes over, hurts themselves accidentally in your apartment and sues you, your renters insurance policy could help cover your legal costs.
What does (and doesn't) renters insurance cover
Renter’s insurance can come in handy in a number of situations. Some common situations where it can come into play include:
- Fire and smoke
- Theft
- Vandalism
- Explosion
- Windstorm
There are some notable situations where renters insurance generally doesn’t apply, including:
- Flooding
- Earthquakes
However, if these things are a concern for you, you can get coverage for these events separately — the National Flood Insurance Program offers flood insurance for renters, and some residential insurers offer earthquake insurance for renters.
As with any insurance policy, the coverage included in a given policy can vary by insurer. Make sure to read your policy’s documents to get a better idea of what is and isn’t included in your policy.
Renters insurance is cheaper when bundled with car insurance
If you have a car, you almost certainly need car insurance. So, you might as well use it to your advantage — insurance companies often offer discounts for bundling the two policies together.
Get quotes from several insurers for both your car insurance and renters insurance, making sure that the coverage limits and deductibles (or the amount you’ll be responsible for if you need to use your coverage) stay the same. Then, you can compare the premium, or the price for coverage, without sacrificing coverage and look for the best price.
Some of our top picks for the best car insurance companies also have earned spots on our lists of the best renters insurance companies. One top pick for both includes Nationwide for its broad renters insurance policy coverages and wide car insurance coverage across 46 states.
Nationwide Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Nationwide offers near-nationwide availability and personalized services, such as On Your Side® Review, a free annual insurance evaluation to ensure you are adequately protected and are taking advantage of any discounts available to you.
Terms apply.
Nationwide Renters Insurance
Cost
Starts at $20/month; premium depends on the coverage amount you choose
Maximum coverage
Not disclosed
App available
Yes
Policy highlights
Policy covers personal property damage or loss, loss of use, personal liability, medical payments to others, building additions and alterations, credit card coverage for unauthorized transactions
Does not cover
High-value items, water backup, earthquakes, theft of items stored in motor vehicle, trailer, or watercraft; additional coverage can be purchased for these instances
Terms apply.
Progressive also offers car insurance in all 50 states and offers helpful features like online quotes and an accident forgiveness program, while its renters insurance was one of our top picks for its broad number of discounts, including those for bundling and getting a quote three days or more before your current policy expires.
Progressive Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Progressive offers a number of lines of insurance to allow for bundling, and convenient tools to help you keep your coverage in your budget.
Terms apply.
Read our Progressive Auto Insurance review.
Progressive Renters Insurance
Cost
Starts at under $1 a day; premium depends on the coverage amount you choose
Maximum coverage
Not disclosed
App available
Yes
Policy highlights
Policy covers personal property damage or loss, loss of use of your rental, accidental harm caused to another person or damage to their property, injury to another person that occurs in your rental space
Does not cover
High-value items like jewelry; additional coverage would be needed for such items
Terms apply.
For those in the military or with a military affiliation, USAA offers strong coverage and a discount of up to 10% for bundling renters insurance and auto insurance. Unlike many other renters insurance companies which exclude flooding, USAA includes this coverage for its renters insurance policies.
USAA Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
USAA's auto insurance is limited to service members, veterans and their families but it is available in all 50 states and Washington D.C. In addition to low rates and outstanding customer service, it has coverage options for unique circ*mstances, such as active deployment.
Terms apply.
USAA Renter's Insurance
Cost
Starts at $10/month; premium depends on the coverage amount you choose
Maximum coverage
Not disclosed
App available
Yes
Policy highlights
Policy covers personal property damage caused by fire, vandalism, building collapse, theft, and more; standard coverage includes flood protection and no extra cost for earthquake protection; overseas insurance allows personal property to be protected if you are deployed or move abroad
Does not cover
Building and roof damage, water leak damage, damage caused by insects or pets, vehicle damage or theft, your roommate's personal property
Terms apply.
There are two different ways policies calculate the value of your items
Before you shop for renters insurance, you’ll want to understand the two different ways that policies pay out for lost items. There are two different types of coverage to look for as you shop: actual cash value and replacement cost coverage.
- Actual cash value coverage (ACV): Policies that use the ACV of your items include a deduction for depreciation or the value lost over time.
- Replacement cost coverage: Policies that use the replacement cost coverage of items pay the dollar amount needed to replace the item today, whether it’s more or less than it was when you bought it.
These two ways figure your compensation very differently. For example, a TV bought for $1,000 three years ago with a 10-year lifespan would be compensated in the following ways depending on which type of renters insurance policy you bought:
- Actual cash value: A television bought for $1,000 three years ago now costs $1,300 to replace. Assuming it still had 70% of its useful life left, the ACV would equate to the replacement cost ($1,300) multiplied by its remaining life (70%), totaling $910.
- Replacement cost: Replacement cost would pay the $1,300 it costs to replace the old item with a similar one.
While policies with replacement cost coverage cost more, they could provide a lot more coverage.
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Bottom line
Renters insurance can cover your belongings, liability and additional expenses if something unforeseen happens to your rented home. Before you buy a policy, consider shopping around and bundling your renters insurance policy with your car insurance, and understand how your policy will reimburse you.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
