What a renters policy covers, how to size personal property and liability limits, and the add-ons worth asking about.
Your landlord insures the building. Your furniture, clothes and electronics, and your liability if someone is hurt in your home, are your responsibility. A renters policy covers both, usually for a modest monthly cost.
Personal property pays to replace your belongings after covered events such as fire, smoke, theft and many kinds of water damage.
Loss of use pays the extra cost of living elsewhere while your apartment is repaired.
Personal liability pays if you are responsible for injuring someone or damaging their property — for example, a kitchen fire that spreads to a neighbor’s unit.
Add up what your belongings would cost to buy new, by room or category. Most people are surprised: $19,000 to $30,000 is common even for a modest apartment. Round up.
For liability, choose at least $100,000. Many renters choose $300,000 because it usually costs little more.
Replacement cost rather than actual cash value for belongings, scheduled coverage for jewelry, watches and other valuables that exceed the policy’s special limits, and whether flood or earthquake damage is excluded.