You’ve made an important investment in protecting what you own with renters insurance. Selecting the right level of coverage is vital if you ever have to file a claim. Here are some things you can do to ensure that your coverage meets your needs.
Step 1: Calculate the right amount of personal property
Establish what your belongings are worth by adding up the cost of your low-cost and high-ticket items such as your furniture, appliances, and especially your electronics, which can have the highest value. Your laptop, television, mp3 player and gaming system could be worth thousands. Even household items like picture frames and dinnerware can add up.
Step 2: Replacement cost is worth the investment
Replacement cost pays to replace your personal belongings with a brand new one, regardless of depreciation. Without replacement cost, if you file a claim you will receive the actual cash value of your loss minus depreciation. For example, if your couch is burned in a fire, you will be paid for what your couch is worth now, not for the cost of a brand new couch.
Step 3: Determine how much liability coverage you
Most policies come with a $50,000 liability limit. Your community may require a higher limit, so check your lease agreement to make sure. Do you have pets? If your pet accidentally injures someone you are liable. Take this into consideration when selecting your limit of liability coverage.
Remember you can change your coverage levels at any time.