How Much Renters Insurance Do I Need?

Think about your typical checklist when moving into a rental property: furniture — check. Kitchenware — check. Renters insurance? That can be easy to overlook, but usually depends on three things: the value of your personal belongings, how much liability protection you want and whether there is a minimum coverage requirement when signing your lease.

Although your landlord’s policy may help protect the building, you’re generally responsible for insuring your belongings and your own liability as a tenant. That means choosing the right amount of renters insurance takes careful thought and a good understanding of what you’d need to replace after a covered loss.

Quick answer: A good starting point is enough personal property coverage to replace what you own and enough liability coverage to match your affordability level and lease requirements. Many renters also review added coverage for high-value items.

What does renters insurance usually cover?

Before deciding how much renters insurance you should get, it helps to understand the main parts of a typical policy. Renters insurance usually covers more than just the items inside your apartment:

What is personal property?

It’s important to understand what personal property is in insurance terms, because it’s usually the biggest factor in deciding how much renters insurance you need. Think about your apartment or rental home turned upside down. Anything that would fall out is generally considered personal property.

Your clothes, furniture, electronics, kitchenware, bedding, décor and many other everyday items can all be part of that total. Even if each item seems small on its own, together they can add up quickly.

Need more info? Explore the benefits of renters insurance and what your options are.

How much coverage do I need for personal property?

Start with a home inventory. List what you own and estimate what it would cost to replace those items today, not what you originally paid for them.

Go room by room, making a detailed list of your belongings, their approximate purchase date and estimated replacement value. Don’t forget everyday items like clothes, shoes, cookware and linens. To simplify the process, group similar items together, such as coats, sneakers or small kitchen appliances. 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 to document your inventory. If you have receipts, keep them in a secure location, like a safe deposit box, and create backup digital files as well. Once you start the habit, update your list when you make larger purchases or move to a new place. You can also review your coverage periodically as your needs change.

A few guidelines:

How much liability coverage should you carry?

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 accidentally 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.

What is a good amount of renters insurance? Liability coverage is part of that answer. The right amount may depend on your assets, your comfort level and whether your lease sets a minimum liability requirement.

Decision tip: If your belongings total one amount but your liability concerns are much higher, don’t choose your policy based on personal property alone. Liability protection deserves its own review.

How much renters insurance should a landlord require?

Landlords sometimes require renters insurance as part of the lease, usually to help make sure tenants have their own protection for belongings, additional living expenses, and liability. Requirements are typically set by the landlord or property manager, not by a universal standard.

In many cases, lease requirements focus more on liability coverage than on personal property limits. That’s because a landlord usually isn’t trying to insure a tenant’s belongings — they want tenants to carry their own protection if an accident causes damage or injury.

Things to find out:

What coverages can be added to my renters insurance?

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. In the event of a loss, 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, replacement cost coverage would reimburse you the full cost to replace that TV with a new one of like kind and quality without applying depreciation.

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 of high value, 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 sub-limit for that ring. Scheduling that ring would allow you to expand coverage up to its scheduled limit.

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 primary factor in determining premium is what, or how much, you need to insure. The average cost of renters insurance is about $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.

How much renters insurance should you get? One thing to remember is that your coverage amount and your premium usually move together. More protection can mean a higher premium, but too little coverage could leave you paying more out of pocket after a covered loss.

What’s right for you?

A practical way to decide how much renters insurance you need is to review these questions:

• How much would it cost to replace everything I own today?
• Do I have any expensive items that may need extra coverage?
• How much liability protection would make me feel comfortable?
• Does my landlord require a specific minimum amount?
• Would I rather pay a little more now or risk being underinsured later?

Want more detail? Take a few minutes to review renters insurance protection.

Is renters insurance worth it?

Simply put, yes. Even if your landlord doesn’t require renters insurance, it’s still worth considering. It can help cover your belongings and temporary living expenses if something unexpected happens to your apartment, so you’re not left without the essentials you rely on every day.