Ah yes, the question posed by every renters insurance customer: How much protection do I actually need? Is my cracked iPhone and that questionable sofa my roommate picked up on Craigslist really worth $20,000? Well, before we get started answering that question, we want to point out what we think is an important point:
Any coverage is better than no coverage. Period.
If you don’t want to go through the mental exercise of calculating the value of your stuff, one option that might work for you, particularly if you know you don’t have that much stuff, is to pick the minimum option offered by a carrier. That way, you’ll probably be covered for much of any loss you suffer, and you’ll be done with this (annoying) process quickly and easily. Too many times we see users who start an application for renters insurance and then drop the application halfway through because they get intimidated by the coverage question. And as a result they end up with no coverage. This is a problem.
That being said, we think it’s a good idea to know how much your stuff is worth. If you want to calculate your specific coverage amount, how should you go about it? We recommend avoiding the “My TV is worth X and my couch is worth Y” approach. Instead, think about how much it would cost you to purchase everything you would need to live like you do today if you started from scratch. Create a blank canvas and make a list of everything you’d want: A bed, clothing, a TV, a couch, kitchenware, a coffee table, and on and on. After all, this is what makes renters insurance truly valuable – it can recreate your life for you if everything is lost tomorrow.
If you go through this exercise, we feel confident that you’d end up with the right amount of coverage. Generally speaking, renters insurance buyers in their 20s tend to have property worth around $20,000, including TVs, phones, computers, clothes, and other belongings. And if you have some special items, like a wedding ring or an invaluable baseball card collection, you might need a bit more coverage.
But remember, any coverage is better than no coverage! You may not be able to negotiate on Craigslist like your roommate can, but you can make sure you’ll always have some money to try.