How Much Renters Insurance Do You Need?


If you rent, don't assume that your landlord's policy will cover your gear in the event of a theft, fire or some other catastrophic event. In addition, it's a good idea to have some liability insurance. The fact that you rent doesn't make you exempt from being sued by neighbors who injure themselves in your home. A good renter's insurance will cover your assets and offer a good amount of liability protection.

Inventory Your Belongings

  • The average renter's policy may include about $20,000 worth of coverage. Prior to contacting an insurance agent, take an inventory of your personal belongings. While at first glance, you may not think your items amount to much, once you begin cataloging items, such as expensive clothing, furniture, television, radio, computer, music equipment and jewelry, the value of your goods will soon add up. Adjust the amount of coverage accordingly. In addition, certain items may require additional coverage. These include jewelry, furs, watercraft, firearms, silverware, goldware, money, bank notes and coins. Ask your agent if you will need special coverage. Be sure to take pictures of your inventory and store them somewhere safe. Attach receipts, whenever possible.

Consider Liability Insurance and Medical Expenses

  • Liability insurance shields you against lawsuits stemming from personal injury or property damage. Your policy will include an amount that will be paid out for each incident. Generally, you may want to have about $100,000 to $300,000 in liability protection. In addition, look for a policy that covers the medical expenses of those injured in your home. Owning a dog, hosting parties that serve alcohol, operating a home-based business and owning a pool may put you at a higher risk for having lawsuits filed against you. Consider purchasing a higher amount of liability insurance if any of these scenarios apply.

Consider the Coverage

  • A typical renter's policy should cover you from damage caused by fire, ice, snow, explosion, smoke, vandalism, hail, freezing pipes, theft and wind. It won't, however, protect against flood or earthquake damage. If you live in an area that is at a high risk for flooding or earthquakes, you may need to purchase additional policies.

    Understand the difference between a replacement coverage policy and a cash value policy. A cash value policy, while cheaper, will only pay you the fair market value of your goods. Replacement coverage pays you the amount it costs to replace your items. For example, if your television, which cost $500 at the time of purchase, is stolen, instead of only being reimbursed $500, you will be reimbursed the amount it costs to find a similar replacement.


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