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Personal property coverage
Renters insurance providers usually offer a wide range of personal property coverage options, from as little as $5,000 to as much as $250,000. Most people opt for between $15,000 and $30,000.
How much personal property coverage do I need?
The exact amount of personal property coverage you need depends on the total value of your possessions. To get that number, you need to create a home inventory.
Creating an inventory
Take a walk through your home and make a list of your possessions. Take pictures of everything you write down — you’ll have to provide them to your insurer if you file a claim.
Assign each item that you catalog an approximate value. If you have a replacement cost policy, assign it the value it would have if it was new. If you have a cash value policy, assign it the value it would have if you sold it in its current condition.
What to include
Include everything except for your car (which is covered by auto insurance, not renters insurance) and appliances that belong to your landlord (e.g. your refrigerator).
That means you should include the following:
- Borrowed items: Items that you’re borrowing from a friend are covered by your policy, even though you don’t technically own them.
- Items in your car: Possessions that you keep in your car are covered by renters insurance.
- Items in storage: Similarly, your renters insurance policy also covers stored property.
Adding it together
Once you’re done creating your inventory, total up the value of all of your possessions to find out how much personal property coverage you need. You’ll probably have to round up or down, depending on your tolerance for risk and what your provider offers.
If you’ve read our other articles, you know that renters insurance also provides loss-of-use coverage. (If you’re not familiar with what that is, read our guide on what renters insurance is.)
In most renters insurance policies, the amount of personal property coverage you have determines how much loss-of-use coverage you have. Specifically, loss-of-use coverage is often pegged at 30% of your total property coverage.
That means that if your property is insured up to $30,000, your insurer will pay for up to $9,000 in additional living expenses. (30% of 30,000 is 9,000.)
That’s enough coverage for most people. Realistically, if there’s a fire in your house and you have to vacate it, you probably aren’t going to spend an extra $9,000 on housing and food while the damage is being repaired, assuming you don’t use the chance to take an impromptu trip to the Bahamas.
Unless you select an unusually low amount of personal property coverage (i.e. under $10,000), whatever loss-of-use coverage your policy provides will probably be enough.
Personal liability coverage
Most renters insurance policies provide about $100,000 in personal liability coverage. However, many providers offer substantially more. (Several, including State Farm and Liberty Mutual, offer up to $1,000,000.)
How much personal liability coverage do I need?
The standard $100,000 is enough for most people. However, you might want to opt for a higher amount if you think something in your home presents a serious liability risk.
Ask yourself the following questions:
- Do you frequently host large gatherings, like house parties, where people might be drinking? (Yes, college students need renters insurance too.)
- How often do you invite other people into your home, whether they’re friends, neighbors, or contractors?
- How safe is your home? Is it cluttered with tripping hazards or objects that might fall on people?
- Is your home’s electrical system old and in need of maintenance?
- Do you have any pets that might bite anybody?
- How about children? Do you have any kids that might carelessly damage someone’s property?
- Are you prone to accidents yourself?
If you answered “yes” to more than one of those questions, you might want to think about opting for more than the standard $100,000 in liability coverage. However, anything over $300,000 is probably overkill, unless you’re in the habit of letting your children play baseball next to your neighbor’s collection of priceless antique vases.
Guest medical coverage
If someone gets sick or hurt in your home, your policy’s guest medical coverage (also known as goodwill coverage) will cover between $1,000 and $5,000 of their medical bills. It differs from personal liability coverage in that it applies whether or not you were at fault for the injury.
How much guest medical coverage do I need?
If you don’t have any pets that might bite somebody, you’re probably fine if you stick with your policy’s default level of guest medical coverage. It will typically be between $1,000 and $3,000, which is enough to treat minor, everyday injuries.
If you have pets, consider opting for more coverage (between $3,000 and $5,000). While renters insurance covers dog bites, they can be expensive to treat, often requiring a lengthy course of antibiotics and sometimes even surgery.
Your deductible is the amount that you pay out of your own pocket when you file a claim. If you agree to pay a higher deductible, your insurer will knock a few dollars off of your premiums. Conversely, if you opt for a lower one, they’ll charge you a bit more every month.
The average renters insurance deductible is $500, although they can range from $100 to $2,000. A few insurers offer deductibles that are even higher — Nationwide, for instance, gives customers the option of paying a $10,000 deductible in exchange for much lower premiums (between 43% and 48% cheaper).
What deductible should you choose?
Your ideal deductible really depends on how much money you have saved away. If you’re living paycheck-to-paycheck and would struggle to pay more than $500, your deductible obviously shouldn’t be any higher than that.
However, if you have a sizable rainy day fund and you’re comfortable with paying more in the event of a disaster, it might be worth opting for a higher deductible to lower your premiums by several dollars per month.