How Much Renter’s Insurance do I need?
I have been providing insurance coverage for several years now and I have heard numerous times from customers that they don’t need renters insurance.
The top two reasons that are given are:
- I don’t have that much “stuff” to need renters insurance
- My stuff is not worth that much because everything was given to me
Well, first, I would say that I doubt that EVERYTHING was really given to them.
Even it the items were given to you once, will your family and friends are willing to do it again for you, and do you want to ask them?
And second I would venture that most people have more “stuff” than they realize.
When you think about all of the contents that you have we never realize how much we have. That is because we did not go out and buy it all at one time.
Thinking about everything in your apartment or house. Not only do you need to consider the bed that was donated to you, but the mattress and the comforter, pillows and the bed throw. You will be amazed how much money is tied up just in the place that you rest your head.
The renter’s insurance policy is usually written with replacement cost coverage, meaning that the company will replace the items in your apartment with new items that are similar in kind and quality.
Do you want to tell Grand mom, that you did not want to spend $10 more dollars a month to have the right coverage that you need her to give you another bedroom suite?
What are the odds that grand mom has another bedroom suite to even give you again? It is most likely not going to happen. She might have had one but very unlikely she could give you 2 of them.
Determining the value of the contents in your home or apartment will take some work on your part. You need to not only consider the things you can see walking in and out of each room, but also the things that you can’t see that are hidden in cabinets or closets.
We don’t go out and buy all of our clothes at one time, but if you know you usually pay about $50 for each pair of pants and you have 10 pairs, well there is $500. If you have 10 pairs of shoes at $30 each there is another $300. If you have 20 undergarments at $10 each there is another $200.
You can see how easily the money adds up.
In your living room, you need to look at the number of video games you have, the console alone can be $1000. Say you have 30 games at $50 each there is another $2500.
We have not even started talking about the furniture and we are already up to $5000.
That cell phone in your pocket could be up to $1000.
People ask us to just give them the minimum amount of coverage.
The minimum is a starting point and not what is appropriate for most situations.
Things, such as:
- Where you purchase your clothes from, Nordstrom, Macy’s, JC Penny or Walmart?
- How many rooms are in your apartment or home?
- What are your hobbies or interests? If you love skiing or snowboarding or playing the guitar, or are you a big electronic buff, those items have to be considered as well.
- Where do you purchase your furniture from, IKEA, or is that bedroom suite from Granny Broyhill, or Ethan Allen?
There is no one size fits all when it comes to the amount of coverage that is appropriate for your renter’s insurance.
This is another time that you need to consult your agent to help give you some guidance to help walk you through all of the things to consider.
And, yes, you need to include all of those items that were donated to your apartment in determining the cost to replace them all if there would be a claim.
When getting your next renter’s insurance policy, don’t ask what is the minimum coverage I can get, instead ask can you help me determine the right coverage for my needs.