Buying insurance requires a kind of balancing act. Buy too much coverage and you're losing hard-earned money. Buy too little and you leave yourself open to hardship and significant financial loss.
For renters insurance, finding the right balance means choosing accurate, appropriate limits for your personal property and liability coverage. For the best results, this process may require a bit of effort. But if you're strapped for time, there are some shortcuts you can take, too.
Inventory your possessions
Personal property coverage is probably the main reason you purchase a renters policy. The coverage will reimburse you for covered damage, loss, or theft of your personal possessions up to a certain dollar amount, so you'll want to make sure you get that amount right.
Performing a home inventory is a good way to determine how much property coverage you need. This inventory lists your personal possessions, along with details about their age, purchase price or current value, and other identifying information. Document the items with receipts when possible. When you've completed the list, total the amounts to determine your coverage value. (You'll also want to put an extra copy of the list in a safe place, in case you need it to support a claim.)
Assess your liability
Your renters policy's liability coverage protects you if someone injures themselves in your home. It also protects you in case you or a family member causes damage to others' property. Some policies will pay for defense and court costs, in addition to settlement costs.
The typical renters insurance policy offers $100,000 in liability coverage. For renters, this amount is often sufficient. However, if your assets exceed that amount, you should consider an amount of insurance equal to at least the total value of your assets.
Supplement coverage if necessary
Keep in mind that your policy will exclude certain perils (such as earthquake and flood losses) and limit coverage on some items (such as computers, firearms, and silverware). If you have special insurance needs, talk to your agent about extending limits or adding separate policies.
The information in this article was obtained from various sources not associated with State Farm™. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. These suggestions are not a complete list of every loss control measure. The information is not intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. Nor is it intended to effect coverage under our policy. State Farm makes no guarantees of results from use of this information.