How Much Renters Insurance Do I Need?

By taking an inventory and reviewing policy options, you can tailor the perfect coverage for your needs.

Think about your typical checklist when moving into a rental property: Furniture – check. Kitchenware – check. How about renters insurance? Although your landlord’s homeowners policy covers the building, you’re responsible for purchasing a renters policy to protect your belongings inside. Yet, unfortunately, renters insurance can sometimes be an afterthought if it’s not required. 

What is personal property?

It’s important to understand what personal property is, in insurance terms, to understand what renters insurance is and what it covers. Think about if you took your apartment and turned it upside down. Anything that would fall out is considered personal property. Your clothes, furniture, electronics, kitchenware and everything else are all important items to protect with renters insurance. 

What does renters insurance cover?

Except for insuring the structure of a home, renters insurance provides similar coverage to homeowners insurance. The following coverages are typically included in your average renters insurance policy: 

Coverage C – Personal Property

This coverage can pay for losses caused by a named peril, or cause of loss, to your personal property. The covered causes of loss are listed in your policy and include fire, windstorm or hail, smoke, theft and more. 

Coverage D – Loss of Use

This coverage can pay for the additional cost of living expenses if your apartment is unlivable due to a covered loss. 

Coverage E – Liability

This coverage can pay for damage or injury to another person you’re liable for. It covers legal assistance against claims and can cover the cost of settling. 

Coverage F – Medical Payments

This coverage can pay for minor medical bills for people who are accidentally hurt at your home, not including members of your household.

You can customize your renters insurance to provide coverage that fits your needs. Some renters insurance coverages that can be added are: 

Personal property replacement

This coverage allows for your personal property to be covered on a replacement cost basis. Without this coverage, your personal property will be covered on an actual cash basis, which factors in depreciation.

For example, if you choose an actual cash value policy and experience a covered loss to your TV, you would be reimbursed the replacement cost minus its depreciation, which is based on the age and condition of the item at the time of loss. In comparison, a replacement cost policy would reimburse you the full cost to replace that TV with like kind and quality. 

Scheduled personal property

This coverage allows for scheduled items to have expanded coverage that may otherwise have limits within the policy. Standard policies often have a dollar limit on some types of property, such as jewelry. If you have special types of property that are worth more, you may want to purchase a scheduled personal property endorsement to increase your coverage for these types of items. Also, in the event of a claim, your deductible would be waived for the items you schedule.

For example, your $5,000 engagement ring is stolen on your honeymoon. Under a standard homeowners policy, you’d be reimbursed up to the $1,500 jewelry limit for that ring. Scheduling that ring would allow you to expand coverage up to its scheduled limit.

Smart devices and computer coverage

This coverage allows for electronic devices to have expanded coverage that may otherwise have limits within the policy. As with jewelry, electronic devices have a limit of $1,500. Adding this endorsement would allow you to raise that limit from $1,500 to an amount you think is suitable for your needs.

How much renters insurance do I need?

Amica recommends conducting an inventory of your belongings and reviewing which renters insurance policy options may provide the proper protection for both you and your possessions. Your possessions can hold personal value, but you’ll need to calculate how much it would cost to replace them. The easiest way is to complete a household inventory.

Go room by room, making a detailed list of your belongings, their date of purchase and estimated value. You shouldn’t forget the everyday stuff, like clothes. To help simplify the process, count your clothes by general category; for example, three pairs of sneakers. Remember to include off-site items, such as those in a self-storage facility – they’re protected, too, up to 10% of your total personal property coverage amount.

Take photos as you go along to help document your inventory. If you have receipts, keep them in a secure location, like a safe deposit box. Create backup digital files as well. Once you’re in the habit, continue to add information with each new purchase. You can call to review your coverage needs periodically and when changes occur.

Renters insurance can cover more than just your possessions. It also provides liability protection for bodily injury to others caused by an accident in your home, as well as damage you may have caused to the property of others. Liability coverage usually starts at $100,000, but Amica recommends you have at least $300,000 worth of protection. 

How much does renters insurance cost?

Renters insurance is a relatively inexpensive way to protect yourself and your belongings. But like any type of insurance, a large factor in determining premium is what, or how much, you need to insure. The average cost of renters insurance is $125 a year for $15,000 in personal property coverage.¹ This comes out to just over $10 a month. 

What affects the cost of renters insurance?

Although the average cost for renters insurance is just over $10 a month, that number can vary depending on the amount of coverage you have and any additional coverages you may need. If you’re insuring all the belongings in your studio apartment, $15,000 of coverage may be sufficient. However, if you and a spouse are insuring all the belongings in a two-bedroom home you’re renting, you may need $100,000 or more in personal property coverage since you likely have many more belongings. How much personal property coverage you need will be a driving factor in how much a renters insurance policy will cost for you. 

Is renters insurance worth it?

Simply put, yes! Renters insurance is often required by your landlord, and if it’s not, you should still strongly consider having it. Renters insurance gives you the peace of mind of knowing that if something were ever to happen to your apartment or your belongings, you wouldn’t be left without a place to stay or essential items you depend on every day.