How Much Renters Insurance Do I Need? The Answer
Renter’s insurance has become a much more common requirement for renters than in the past for a number of reasons. The answer as to how much you will need actually comes in two parts. The first is what you as a tenant need to adequately protect yourself from any potential losses due to fire, flooding, theft, etc. The second part is the landlord’s end – what they require as the legal party responsible for the entire building and its contents. Fortunately, these two interests rarely clash, but you need to remember the landlord’s end of things when considering moving in to a new place. The general range is between $20,000 and $30,000, but things rarely are that cut and dried.
In assessing your total potential loss that you will need to determine before taking out a renter’s insurance policy, the common sense approach is to make use of a piece of technology most people have – your smartphone. Upon moving in and getting everything set up, take pictures and videos of every single item in your apartment. Be sure to zoom in on smaller items and enter pan mode for the larger ones. In the event of any claim you will be able to have a visual record of everything in the apartment.
But the digital record is only the starting point. You then need to make a physical list, item by item, to use when you go to apply for renter’s insurance. No one, not even you, wants to sit and watch a 90 minute video of your personal inventory. But making the list serves another purpose – it will give you a real world sense of just how much you own, and how much you need to insure. The good news is there are a number of online apps that will help you organize your list and do most of the work for you.
One critical point to remember about the pics and videos is they can be stolen or destroyed, so you need to keep them in a safe place. If someone can see everything you own, you have just given them a roadmap as to where the good stuff is, setting yourself up for filing an insurance claim.
Once that is done, you need to get a policy that will cover the replacement value of the items, not just their fair market value. Should anything happen to your stuff you can replace it using today’s market prices rather than what someone might pay for them on eBay. Clothing and sports equipment often go ignored in estimating the amount of insurance you will need, but they can be among the most costly items to have to replace.
On the landlord’s end of things, they will require what they think is beneficial to the renter. This may sound like someone is trying to avoid any landlord-tenant conflicts, and in part it is. An average amount of renter’s insurance that is required by the landlord is a minimum of $300,000 in liability coverage and $50,000 for personal property. This may seem like a lot, but the prices of renter’s insurance are pretty cheap, charged on a per $100,000 amount of coverage.
One reason landlords require renter’s insurance is so they don’t have to go through the hassle of taking personal responsibility for your personal belongings or acts of negligence. People party, and that often comes with something being broken or damaged, costs that will have to be picked up by the landlord unless you have renter’s insurance. Accidents happen, and the legal costs to remedy any lawsuits brought against the apartment complex can get pretty steep unless renter’s have liability insurance.
To wrap things up, renter’s insurance helps both the tenant and the landlord avoid arguing about who is responsible for any costs related to damage to the apartment of apartment properties when things go wrong. That is what insurance is for. Because the vast majority of renters have a car, insurance companies often will package renter’s insurance with auto insurance, saving you money and allowing you to deal with just one company for most of your insurance claims.
A final note. Getting rental insurance is not problem free, depending on the type of lease agreement you have or the area where you plan to live. Be sure to check with your insurance company regarding some of the hidden details that may exist the can either limit the total amount of coverage you have, or being able to get insurance at all. As with any insurance policy, be sure to pay attention to the fine print.