How Much Renters Insurance Should I Buy

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How Much Renters Insurance Should I Buy?

The answer to this one is quite simple really, you need enough cover to replace everything in your apartment should it ever be damaged, destroyed or stolen. Hmmm, where to start, where to start.

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For most people renter’s insurance is the one of the cheapest insurances you can buy. Most typical renter’s insurance policies are around $10-25/month.

Assessing How Much Renters Insurance You Need

The first thing you need to do is to take an inventory, I know it sounds a bit boring, try doing it over a pizza and a bottle of wine, that should make the job a little more bearable although not necessarily accurate!

Make a list, write down everything you own, go through your apartment, start with the major items, keep receipts for any major purchases if you can (there is often a dollar limit on individual items, but every little bit of information helps), then start opening drawers and routing through cupboards. Why not take photos or videos of each room, so that you have a real record of just what you did have before the dreaded event.

I bet you’ll be surprised at just how much your stuff is worth, or at least, how much it would cost to replace. That’s another thing, there are two different types of coverage which you can choose from:

  1. Actual cash value – this is the cheapest option and you will be reimbursed by the actual cash value of any property which has been damaged, stolen or destroyed. Do be aware that your belongings will be devalued after depreciation, so if you’ve had your old TV since High School, you won’t be able to claim for a new one.
  2. Replacement policy – this is a little more expensive but actually replaces your items at their replacement value, so even if you’ve had your TV for 5 or 6 years, it’ll still cost you more to replace it.

Average Renters Insurance Policies

According to information from the IIABA, $30,ooo of property coverage or replacement will cost around $12 per month ($240 per year). This varies on where you live (if you live in a “bad neighborhood” you’re classed as having an increased risk of being burgled) but it is possible to reduce your premiums by installing a burglar alarm, smoke alarm or fire extinguishers, so that’s definitely an option.

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