The Best Renters Insurance for 2015

I’m focusing on the best renters insurance companies after sharing my take on the best home insurance companies in a previous post. With the growing popularity of renting, I conducted some additional research to determine which companies are the best for renters.
After analyzing several national and local companies, Allstate stands out as the best renters insurance provider.

If you want a free online quote, you can get started right away. Continue reading and I’ll explain why you need renters insurance and discuss the major components of a solid policy.
Here are the 4 best renters insurance providers on a national level:

1.      Allstate

2.      Nationwide

3.      Liberty Mutual

4.      American Family

Selecting Allstate as the best ultimately boils down to three important factors:

• Policy Management
• Coverage
• Cost

Who Needs Renters Insurance?

To put it simply, if you’re currently renting an apartment or home, it’s in your best interest to get a renters insurance policy. It’s easy to get a free online quote and learn exactly what your rates will be. Once your policy is purchased, you then have the assurance of knowing your possessions are protected.
Some people mistakenly assume that a landlord’s home insurance policy includes coverage for your personal property. In most cases, this is not true. Chances are, your landlord’s policy does not cover your personal possessions.

College Students

Needing renters insurance as a college student depends primarily on where you live. If you live in a dorm or a rental unit close to your college campus, there’s a good chance you’ll be covered by your parent’s renters or homeowners insurance policy (assuming of course they actually have one of these policies). The same is not true if you rent a house or apartment off campus.

College Student Living in a Dorm

Many home or renters policies limit your coverage as a college student to 10% of your parent’s personal property coverage. To give you an example of how this might work, if your parents have $100,000 of personal property coverage, as an eligible college student you could receive 10% ($10,000) of coverage for your possessions. The exact percentage you’re eligible for varies from policy to policy, so be sure to verify with your parents before you assume you’re covered.

College Student Living Off Campus

If you rent a house or apartment off campus, get your own policy. The best thing to do is start with a free quote and go from there. As a college student, you might not think your belongings have a lot of value, but just the cost of your computer, cell phone, books, and clothes can quickly add up.

Young Professionals

You may’ve been able to get through college using a couch you found on the street, but
chances are you’ve made some improvements to your standard of living. Maybe you bought a new TV, overhauled your furniture, or upgraded your electronic devices. Along with these improvements, you’ve probably moved into a nicer apartment. According to research conducted by the National Multifamily Housing Council, roughly one-third of apartments in the U.S. are rented by someone under 30 years old.
Although it’s not legally required, many property management companies that manage multiple complexes in big cities make renters coverage compulsory. Whether it’s a requirement of your rental agreement, or you’re just taking the initiative, protecting your new investments with a renters policy is a wise move.

Grandparents

If you have a grandparent that rents a home or apartment, you should check in with them to make sure they have some protection. Many seniors are retired and living on a very fixed income. If a major incident were to occur, it could be especially tough for them to get back on their feet.
Older adults also have valuable jewelry or family heirlooms they have collected over the years. Some of these items may have more sentimental value than anything else, but it’s still worth it to protect these items with a basic policy.

Choosing the Best Renters Insurance

All of the best insurance companies provide a similar set of basic coverage options. Knowing that you can get the basics covered, factors like price and the ease of policy management start to take on more importance. The following sections dig deeper into these topics and illustrate why Allstate comes out on top.

Policy Management

Managing your renters policy really starts with determining how much coverage you need. This is an important part of the purchasing process that you need to get right.
You don’t want to overestimate your coverage level and pay for insurance you don’t need. But you also don’t want to underestimate and end up in a bad place if you have a major loss.
Many of the best insurance companies provide access to a simple calculator to help you estimate the cost of your possessions. But the online tools provided by Allstate are a step above what much of the competition has to offer.
To begin with, Allstate’s What’s Your Stuff Worth? tool walks you through several categories like clothing, electronics, hobbies, office and living, kitchen, and more. As you progress through each category, the tool shows you images of common items and enables you to specify how many of each item you own.
For example, in the clothing section, you might specify that you have four pairs of shoes and six pairs of pants. Meanwhile, a calculator in the lower right of the screen keeps track of your running total.

Digital Locker Mobile App

Allstate’s Digital Locker app includes several features that help you manage your policy. Perhaps most useful, the app enables you to catalogue your possessions with pictures. You use the app on your smartphone or tablet to take pictures of all your possessions, assign values to each item, and upload the images to your account.
Available on Apple and Android platforms, the app also enables you to:

• Organize your possessions by room, category, or in lists.
• Provide more accurate estimates by using the Google or barcode search (especially helpful if you’re uncertain of the value of an item).
• Take advantage of room and category templates to help make sure you don’t overlook anything important.

Using the Digital Locker app makes it incredibly easy to keep your inventory current and gives you the peace of mind of knowing that if you ever have to file a claim, all the information you need is literally at your fingertips.
With all the tools and resources provided by Allstate, managing your policy is a breeze.

Coverage

In the insurance world, a “peril” is a cause of loss. Most renters policies are listed as “Named Peril” policies, meaning that your policy will identify exactly what you’re insured against.
Some of the most common perils include:

• Theft
• Water Damage
• Vandalism
• Fire
• Smoke
• Lightning

When you get a quote, be certain to review the perils you’re protected against. If you live in an area particularly susceptible to fire or lightning, verify that these perils are listed in your policy.

Types of coverage

All of the best renters insurance companies provide access to four types of basic coverage:
Personal Property Coverage: This includes coverage for items you use on a daily basis, like your clothing, appliances, and furniture, as well as specialty items like your jewelry collection or musical equipment. (You’ll want to look into extended coverage for really expensive items, but more on this later).
Liability Coverage: This portion of your policy provides protection when you are legally liable for bodily injury or property damage that occurred as a result of an accident or incident involving you or another member of your household.
Medical Payments to Others: Covers the medical costs for any house guests that are injured at your residence, regardless of whether you are liable or not. Medical payments could include things like x-rays, doctor’s fees, or hospital stays. It’s important to note that medical payments protection does not cover you or other members of the household.
Additional Living Expenses/Loss of Use: Covers additional living expenses if damage to your home or apartment is so severe that you are temporarily displaced. This could include hotels, restaurants, or other similar expenses. Your policy will specify how long you have access to the coverage.
Nationwide is one company that stands out for offering superior coverage options. In J.D. Power’s 2013 U.S. Household Insurance and Bundling Study (Renters), Nationwide was one of only two companies to be rated among the best in Policy Offerings.

Extended Coverage

As alluded to earlier, there are a few circumstances where additional renters coverage is worth looking into. Extended coverage (also called a floater policy) is appropriate if you have a particularly expensive piece of jewelry, a valuable stamp collection, or other similar item that has especially high value.
Extended coverage is offered by Liberty Mutual, American Family, and other top insurance companies.

Cost

Similar to what I mentioned in my post about home insurance, the best renters insurance carriers provide access to an online quote tool. Getting a quote really is the only way you can see how much it will cost given your unique circumstances. Many first-time purchasers are surprised at how affordable renters insurance is. Past studies by the Independent Insurance Agents & Brokers of America and Trusted Choice Independent Insurance Agents indicate the average price for $30,000 of renters coverage ranges from $12-$15 per month, while experts at the National Association of Insurance Commissioners suggest you can expect to pay $15-$30 for a policy depending on your level of coverage.
I was curious to see how these numbers held up and got quotes from three different companies using the same renter profile. The quotes were generated for $30,000 worth of coverage, with replacement cost, for a rental unit just outside a major U.S. city. Here’s what the monthly rates looked like:

• American Family: $11.50
• Allstate: $17
• Nationwide: $22.42

These rates are pretty close to what the studies and experts suggest, but rates always vary based on your location.
The bottom line is that you can cover $30,000 worth of possessions for roughly the cost of a large pizza.
As you can see, the difference in price between the providers will definitely add up over time. If you’re looking for the cheapest renters insurance, the best thing to do is to compare quotes from at least two providers.

Discounts

All of the best renters insurance companies offer discounts. The most common discounts include:

• Multi-Policy: Available if you have an auto insurance or other policy with the same company.
• Claims-Free Discount: Available if you haven’t filed a claim over a certain period of time.
• Protective Devices: Available if you have fire or smoke detectors or a home security system installed. Although there are not as many discount opportunities when compared with home insurance, taking advantage of all available discounts can result in big savings.

Factors That Impact Renters Insurance

Similar to home insurance, there are several factors that influence the cost of your renters insurance premium.
Level of coverage: The level of coverage you choose is one of the major factors that impacts the price on your renters premium. The level of coverage you need is going to vary from person to person. The easiest way to determine what you need is by using the estimation tools provided by Allstate and other top companies.
Location: If you live in an area that has higher crime rates or is more susceptible to wildfire, tornadoes, or other natural disasters, you can expect to pay more for your policy.
Deductible: The deductible is the amount of money you pay out of pocket before the insurance kicks in. The formula for deductibles is pretty straightforward: a low deductible means higher premiums; a high deductible means lower premiums. Again, you might be tempted to choose a high deductible, but be sure to choose a level you can realistically meet.
Replacement cost vs. Actual cash value: Most providers give you the option to choose between replacement cost and the actual cash value. If you choose replacement cost, you are covered for the actual cost to replace the item that has been lost. If you select an actual cash value policy, the insurance company covers what the item is worth at the time of the loss. In other words, it would be the replacement cost minus depreciation. Replacement cost is the more expensive alternative, but you won’t regret going with this option if you ever have to file a claim.

Is Renters Insurance Worth It?

When you live in an apartment building or a house with multiple units, it doesn’t matter how careful you are — you are only as safe as your most irresponsible neighbor.
When you actually sit back and crunch the numbers, the cost of replacing everything you own can add up quick. This is exactly what makes finding the best renters policy so important.
Renters insurance is affordable, it’s easy to get, and has a huge upside. Choosing to live without a policy may end up being a big financial mistake.

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The Best Home Insurance for 2015

If you’re looking for the best home insurance, there are several national and local insurance companies that will want your business. However, it’s hard to decide which company to pick with so many choices.
Companies like Amica Mutual stand out in customer surveys, but they aren’t available everywhere. The best way to find fair rates on homeowners insurance is to get free online quotes from a variety of companies.
There’s more to take into account than just price, but it’s a good starting point. I’ve included a quote tool below so you can shop around right away. Enter your zip code in the box and click “Get Quotes” and you’ll be presented with a list of 3-5 of the best homeowners insurance companies in your area. You can research policies from each provider and determine which is the best fit for your home and your budget.

The best home insurance companies will perform exceptionally well in three critical categories:

• Price
• Claims
• Coverage

Although Amica ranks highest in customer satisfaction by J.D. Power, companies like State Farm, Liberty Mutual, and Allstate also rank well in these areas and are worth considering.
There are many reputable national carriers offering similar types of coverage. To find the ideal option for you, the best way to start is by getting an online quote to get an idea of the average rates and companies offering insurance in your location.

Choosing the Best Homeowners Insurance Company

Price

In order to get the most accurate estimate of what your homeowners insurance will cost, I recommend utilizing the online quote tools found on the insurer’s website or the comparison tool I included at the top.
To give you an idea of what insurance prices look like from some of the best insurance providers, I got a quote for a home in a Chicago suburb.
These are the monthly quotes I received:
Amica: $75.33
State Farm: $117.75
Liberty Mutual: $129
Farmers: $150
Amica came out to be considerably cheaper than the next provider in this scenario.
Each homeowners insurance company asks for slightly different information, but as I went through each online tool I used the same profile with the following characteristics:
Location: Address located in a Chicago suburb
Home Value: $315,000
Deductible: $1,000
Size: 1,900 square feet
Applicant Age: 40
Home Type: 1 story
Roof Type: Asphalt shingle
Payment Terms: Monthly
The great thing about online tools is that you determine the exact type of coverage you want, select the level of your deductible, and choose the payment terms. It might take a little extra legwork, but online quote tools really do put the power in your hands to find the cheapest policy.
Many online tools, like the one provided by Liberty Mutual, enable you to modify the coverage levels you select, so you can clearly see how changing one component directly impacts the price of your policy. (For example, you could enter a low value for your deductible, see what your rates look like, then enter a high value and see how your rates changed.)

Homeowners Insurance Discounts

All of the best homeowner’s insurance companies offer a variety of discounts. If you fail to take advantage of these discounts, you’re just leaving money on the table. To give you one example, if you took advantage of a multi-policy discount and bundled the same State Farm home insurance policy quoted above with an auto insurance policy, your monthly rate would drop from $117.75 to $76.50. That’s almost $500 in savings per year!
When it comes to discounts, Liberty Mutual is one of the most competitive providers.
Some of their discounts include:

• Multiple-policy Discount: Available if you have an auto, life, or other type of insurance policy with the same provider.
• Protective Device Discount Available if you have a home security system, sprinkler systems, fire alarms, or other security devices in your home.
• Claim-Free Discount: Available if you haven’t filed a claim over a certain period of time.
• Exclusive Group Savings Available if you have membership or affiliation with certain businesses or organizations. Liberty Mutual’s group savings network includes more than 14,000 employers, alumni associations, and professional associations.
• Newly Purchased Home: Available if you recently purchased your home.
• New/Renovated Home Available if you recently renovated your home.
• Early Shopper Discount: Available if you request a quote before your current policy expires.
• Insured to Value Discount: Available when you insure up to 100% of the cost to replace your home.

Take advantage of Liberty Mutual’s discounts by completing an online quote on their website.
The best homeowner’s insurance companies offer a high number of discounts, helping you keep your premium low. If you’re unhappy with your current policy or feel like you’re paying too much, you can always get a quote with a new provider that offers discounts that better match your profile.
Selecting an insurance company that maps to your discount profile can result in major savings.

Factors that influence home insurance

There are several factors that influence the cost of your homeowners insurance policy. You won’t be able to change or control many of these factors. However, identifying the characteristics you can modify and making the appropriate adjustments can help you keep your rates low. The most common factors that influence your homeowners insurance premium include:
Home’s age and type of construction: If your home is older, there’s a higher chance there will be problems with major components like plumbing, electrical wiring, and HVAC systems. New homes are less susceptible to these major problems.
Location: If you live in an area prone to natural disasters, with a relatively high crime rate, or located far from emergency services, expect to pay more for your policy.
Claims History: If you file several claims a year, you are more likely to pay a higher premium.
Risk Factors: If your home has a swimming pool, aggressive dog, trampoline, or other characteristic deemed risky, you’ll likely pay a higher premium.
Credit Score: Your credit score (whether good, bad, or average) has an impact on the price of your policy.
Deductible: The level of deductible you choose plays a role in the price of your coverage. If you choose a high deductible, that means you have to pay more out of pocket if an incident does occur. The trade-off is a lower premium. (As a side note, I recommend sticking with a deductible you’re comfortable with. If your home is damaged, coming up with $1,000 is probably manageable. Coming up with $2,500 or $5,000 is probably going to be more difficult for most of us. Remember, your insurance won’t kick in until the deductible is met.)
Coverage Amount: The amount of coverage you select will play a role in the price of your insurance.
You can’t control the location of your home, but you do have a say in whether you get a trampoline or an aggressive dog.
By choosing to minimize the risks that are in your power to control, you’re helping keep your premium low.

Claims

The circumstances that surround filing a home insurance claim have the potential to make the whole ordeal quite stressful. When your home has been damaged, the last thing you want to do is go to battle with an insurance company that you’ve been making payments to for the last several years.
Based on data from studies conducted by J.D. Power and Associates and ConsumerReports.org, when it comes to filing a claim there is a clear distinction between the different insurance companies. The company that excelled in both studies was Amica Mutual.
Amica is one of only two companies to receive above average ratings in six different categories in the J.D. Power 2013 U.S. Household Insurance and Bundling Study. These six categories measure factors like Overall Satisfaction, Price, Policy Offerings, Claims, and other characteristics fundamental to quality homeowners insurance.
Amica also ranked at the top of Consumer Reports’ homeowners insurance ratings. This study measures existing customers’ satisfaction with agent availability, the dollar estimate received when damages occur, and timely payment by the insurer.
In the event that you do need to file a claim, it’s comforting to know you can easily contact your agent, be treated fairly, and get the money you need to make repairs quickly. Ranking exceptionally well in separate studies conducted by two of the most reputable companies is a good indicator that Amica is doing something right.
(As a side note, the other insurance provider that ranked well in both studies is USAA. However, a major drawback of USAA is that membership is limited to those with military affiliation. If you, your spouse, or one of your parents have served in the military, USAA is definitely worth looking into.)

Coverage

The main reason you buy an insurance policy is for the coverage it provides. State Farm stands out for offering excellent coverage options, some of which include:
Dwelling Coverage: The part of your policy that helps pay to repair or rebuild your home if damage is the result of a covered loss. Critical home components like plumbing, electrical wiring, or your HVAC system fall into this category.
Liability Insurance: Helps protect your assets and cover costs associated with a lawsuit when you or a family member are responsible for injuring another person, or if someone is injured on your property. (For example, if your dog bites your neighbor.) It also provides coverage if you or a family member causes damage to another person’s property. $100,000 is a good benchmark for liability coverage, but this will vary depending on the size of your home and the assets you need to protect.
Other Structures: Covers the cost of repairing (or rebuilding) detached garages, sheds, and other similar structures.
Personal Property Coverage: Covers your clothing, electronics, furniture, and other personal property that is damaged or destroyed by a cause that is covered by your insurance. Most top insurance companies provide checklists, personal property calculators, or other resources to help you document your belongings. For example, Liberty Mutual provides a mobile app where you can upload pictures, receipts, and more.
Loss of use: If your home is damaged to a degree that you have to temporarily move out while it is being repaired, loss of use will help pay your housing and living expenses.
Guest Medical Coverage: Provides coverage for medical bills and related expenses when someone is injured on your property, but they do not want to sue you. $1,000 per person is a common level of coverage, though some homeowners choose to take out an extension for added protection.
Most of the top homeowners insurance carriers offer similar types of coverage. The best way to find the right homeowners insurance package is by comparing rates and coverage options through an online quote.

Additional Protection

In addition to the basic coverage options listed above, the policies of each major company include other types of coverage to complement the basic options outlined above. For example, Allstate also offers optional coverage for identity theft restoration, scheduled personal property, water backup, and more.
Most home policies cover damage from wind and fire, but natural disasters like floods or earthquakes almost always have to be added on as an additional policy option. If you live in areas particularly susceptible to these threats, you should look into the catastrophic coverage options offered by the provider before making a purchase.

Don’t Own a Home?

Homeowners insurance obviously won’t be of much interest to you if you don’t own a home. If you’re currently renting or making the move soon, you won’t want to miss my next article that discusses the best renters insurance companies and shows you why one is better than the rest.

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