Renters insurance is a fairly common necessity for tenants, but even if your landlord does not require it, renters insurance is still a good idea. The homeowners insurance that your landlord has covers damages to their property, but it doesn’t cover loss, damage, or theft of the renters personal property. Liability coverage is also nice in case of an injury, so you aren’t on the hook for medical expenses.
Cost of Renters Insurance
Renters insurance is typically a low monthly cost. According to the Insurance Information Institute, the average cost of renters insurance in the United States is about $15 per month. Below are some of the factors insurers use to determine the cost of renters insurance:
- The value of personal possessions
- The amount of liability coverage needed
- Additional living expenses
How much renters insurance do you actually need? The Insurance Information Institute has a checklist available for download (though it’s more of a guide than a checklist). We’ll walk through how to figure out how much you may need.
Calculate the Value of Your Property
This is a huge task, but it can be worth it. When there is loss, damage, or theft to your property, an insurance adjuster is going to calculate the value of your affected property and reimburse you based on that calculation. If someone steals your television, and you can’t prove you ever owned a television, things can get messy fast. Even something as simple as a video walkthrough of your home can help an adjuster out. The more accurate you can be, the better.
Make a Comprehensive List
Ideally, you’ll want a list of all your personal property with an approximate value of each item.
Categories should include:
- Dishes and cookware
- Sports equipment and bicycles
- Tools and landscaping equipment
As you make your list, start with your highest value items and work your way down. Once you’ve priced your more expensive items, you’ll have a better sense of how much coverage you’ll need without needing to price every shirt and spoon you own.
Property Value Software
If you want a list of your property more detailed than a video walkthrough, there is software available that can help. The software ranges in price from free for the most basic tools, to one-time fees, and even monthly subscriptions that will store your items on their cloud, so you’ll always be able to access your list if you suffer a total loss of your property.
Coverage for High-Value Items
Renters insurance does not cover some high-value items such as jewelry or precious metals. For example, you may have a $4,000 engagement ring, but your policy may only cover $1500 worth of jewelry. Insuring more expensive items may require additional personal articles coverage which can be provided under a separate policy.
Actual Cash Value Vs. Replacement Cost
Another thing you’ll want to determine is whether you want to claim the actual cash value or the replacement value of each item. Your property loses value the minute you buy it, so the actual cash value may not be enough to completely replace lost property, but getting coverage for the replacement value will cost a little more.
How Much Liability Coverage Do You Need?
Liability coverage is a key part of renters insurance because it protects you financially from medical expenses or other damages which you might be liable for, such as a dog bite or a fall on your property.
While renters insurance covers you against most disasters, it doesn’t cover you for all of them. Flood insurance, for example, is usually not covered through most policies and must be purchased separately. Get a free quote Farm Bureau flood insurance provided through the National Flood Insurance Program.
Protect Yourself With Renters Insurance
For more information about buying renters insurance, contact a local Farm Bureau insurance agent near you. Start by using our Agent Finder.