How much renters insurance do you need? A quick way to work it out

Add up what you own

The personal property limit is the most important number on a renters policy. People usually guess low, because they think of the big things and forget the hundreds of small ones: clothes, kitchenware, books, tools, chargers. A quick room-by-room tally gets much closer:

Price everything at what it would cost to buy new today, not what you paid. Our home inventory checklist has a free template for the room-by-room count.

Replacement cost or actual cash value?

A replacement cost policy pays what it costs to buy the item new. An actual cash value policy takes off depreciation for age, so a five-year-old couch might bring a third of the price of a new one. Replacement cost usually costs a little more each month and pays a lot more after a loss. Check your policy or quote for which one you have.

How much liability coverage?

Liability pays if you are responsible for someone getting hurt or for damage to someone else's property, such as a kitchen fire that spreads to the unit next door. $100,000 is a common minimum, and $300,000 often costs only a little more. Some leases set a minimum, so check yours. If you have significant savings, ask about an umbrella policy on top.

Loss of use

If a fire or a burst pipe makes the apartment unlivable, loss of use pays the extra cost of a hotel or short-term rental and meals until you can move back or find a new place. It is usually set as a share of your personal property limit. Our guide to loss of use coverage covers what it pays for.

Picking a deductible

Renters deductibles are usually $250, $500 or $1,000. A higher deductible lowers the monthly price but means small losses aren't worth claiming. Pick an amount you could pay from savings tomorrow without stress.

How much does renters insurance cost?

Quotes vary by city, building and insurer, but many renters pay somewhere around $15 to $30 each month for a policy like the one above. Raising the personal property limit from $15,000 to $25,000 often adds only a few dollars. Bundling with car insurance usually brings a discount.

• Jewelry, watches and cash have low limits inside the policy. List expensive pieces separately if you have them.
• A roommate's things aren't covered by your policy unless they are named on it.
• Your landlord's insurance covers the building, not your belongings.

When something does go wrong, our guide to filing a renters insurance claim walks through the steps.

Your things away from home

Renters insurance usually covers your belongings anywhere, not only in the apartment. A laptop stolen from a coffee shop, a suitcase lost from a hotel room, or a bike taken from outside work can all be claimed. Some policies pay less for things kept somewhere else, such as a storage unit. Check your policy for an off-premises limit if you keep a lot in storage.

Common mistakes when picking a limit

• Counting only furniture and electronics, and forgetting clothes, which are often the biggest category.
• Using what you paid years ago instead of what it costs to buy the same thing today.
• Picking the lowest limit offered because it is the default on the quote.
• Not raising the limit after moving to a bigger place or buying something expensive.

Look at the number again once a year, at renewal. If you have moved, combined households or bought a new computer, the limit you picked last year may be too low.

What renters insurance doesn't cover

• Flood, including water that comes in from outside after heavy rain. That needs a separate flood policy.
• Earthquake, unless you add it.
• Bed bugs and pest damage.
• Your car, which your auto policy covers, though things stolen from it are usually covered here.
• Damage you caused on purpose, or wear and tear on your things.

If you live in a flood zone or an earthquake area, ask about adding cover when you buy the policy. It is far cheaper than finding out after. Renters can buy flood cover for their belongings alone, without the building, through the national flood program or a private insurer.

Where Indemnia helps

Indemnia does the room-by-room count for you. It lists what it sees in your photos and what it finds in your email receipts, with today's prices, so the number you pick for your policy is based on what you own rather than a guess.