Renter's Insurance - How much Personal Property Coverage?

[akl432]

Hi Mustachians!

This is my first post after finding this great site, and I'm excited to join the fun!

How much personal property insurance do you carry on your renter's or homeowners insurance policy?  I have a relatively small 950 sq. foot apartment, and my current personal property replacement cost coverage is $50,000 from Allstate.  I'm questioning if that is too high.  I think the amount was set years ago (I don't have my old documents) and Allstate keeps automatically increasing every year, even though I am not buying more stuff! 

I have basic furniture (living room, bedroom set) and clothes.  No fancy technology (just a few regular tube TV's), washer/dryer, and about $3K worth of collectible ceramic items from Europe.

Does the $50,000 replacement value seem too high?  I don't have much experience with renters' insurance or other reference points.  How much personal property insurance do you carry?  Any suggestions for how to figure out whether this is the right amount?

Thanks in advance for your help!

[Dexterous]

You obviously do not need $50,000 in coverage for your belongings...maybe $15k to 25k.  Coverage for medical expenses of others may be worth looking at on your policy if you have guests who could sue you in the event of injuries at your place.  The lawyer that the insurance company will use is also worth a lot of money too in the event a scenario like that happened.

For me, renters insurance is certainly worth it... I get it for free because it lowers my other insurance policies more than it costs.  :)

[Rubic]

How much are you paying per year?  What's the deductible?

I would personally have zero coverage.  There's nothing that you've listed that can't be easily replaced, with the exception of the collectible ceramics (which would be perhaps a more emotional loss than monetary anyway).

Essentially there nothing is that you would lose that would affect your ability to continue generating income.

[Lordy]

I believe that you should have insurance only to cover cases which you can not pay for yourself or would ruin you.

For this reason, I have no personal property coverage at all. If my apartment burns down tomorrow I will take some
of my cash and buy new furniture and household items. Certainly an annoying, unplanned expense but nothing that
would ruin my financial plans and make an insurance worthwhile.

[Gimesalot]

I really think it depends on your situation, your belongings, and your savings.

For example, we had a friend whose apartment building caught fire.  His stuff didn't burn but a lot of it was smoke damaged.  He stayed with us for a few weeks until he found a new place.  In the mean time, his landlord wouldn't give him his deposit of pro rate his rent because, "The apartment was in worse condition than when it was rented out and he couldn't be certain what damage was caused by the fire department and what was caused by him."  In the end, it took months to get his money.  He had a small insurance policy, about 5k, that he used to get a new apartment and replace a few belongings.  It worked for him.

Hubby and I, we have a lot in savings, so we self insure. 

Keep in mind that when you have time to shop, you can find deals and low prices.  When you have no clothes or bed, you need the replacement right away and this will most certainly mean you end up paying more.

[Eric]

$50k could be a little high (dependent on the premium), but you should definitely have some coverage.  Those above without are playing with fire (possibly literally).  It costs a fair amount of money to replace all your clothing, bed, furniture, and kitchen items.  I carry $30k for two people, and at about $200/yr, it's pretty cheap insurance.

[StockBeard]

Ran into the same situation when I moved in recently. The insurance company told me their lowest value for personal stuff was $30'000.
I relocated internationally recently, and we had to do a pretty accurate estimate of the financial value of our belongings, which ended up being around $25'000 for everything (same thing as you, we live in about 900 sq ft).

The thing is, if insurances work in the US the same way as they do in the rest of the world, I'm pretty sure the insurance will never cover for our 10 year old Sofa, even if replacing it after some damage would actually cost a lot... The sofa itself is worth nothing, nobody could resell it. But if it were gone, we'd have to buy a new one.

Anyway, I digress: yes, $50'000 seems way too high, I'd suggest reducing it if you can.
(my renter's insurance is $132/year, btw, would be interested to know if others have better)

[Lyssa]

I rent and don't carry any insurance on property. I own nothing the destruction of which would mean my financial ruin so if something happens I'm prepared to replace or do without. I have coverage for the big risks like health, disability and personal liability.

[Villanelle]

We have $60k in coverage, and this thread is timely because DH and I were just discussing last night whether we should adjust.

I'd say out stuff has a better chance than most of being damaged or lost.  In the next 18 months, it will be put on a truck, then a boat from Europe to the East Coast, then a truck across the country, then sit in storage in CA for 6 months, then a boat to Japan, then a truck then storage there, then a truck to my house.  Technically, we have some coverage for the move, but it's a difficult and flawed process. 

We do know people who, as part of this process have lost their entire shipment off the boat, or had it burn while in storage.

[StockBeard]

Your renter's insurance doesn't cover for the move, though, right? So is that related to your 60k coverage?

[MustachianVol]

First post similar to the OP on a timely topic as the wife and I rent a townhome, and it just caught on fire last week displacing us for 6-12 weeks.  The $90/yr we pay in renters insurance is now the best performing investment we've had to date.  Hooray!

We had $22,000 in personal property coverage which was probably a little high, but you'd be surprised how quickly things add up, particularly cleaning of items from smoke damage - which can be done (successfully I might add).  We carried renters primarily for the liability (thank goodness in this case) coverage and pricing it with and without the personal property left us asking why we would NOT keep the personal property.  It was mere dollars for tremendous value.  Even if you just had $15,000, I do not see why you wouldn't

What I underestimated was the cost for additional living expenses, and it's worth reviewing on your policy.  Temporary housing adds up quickly if you live in a city with limited friends and family options.  We love the place we rent, love the landlord, and love the cheap rent, so we are inclined to wait it out to move back, so we'll end up maxing the $4400 in additional living expense reimbursement from the insurance agency. 

We're in our late 20s, and when we moved into this place 3 years ago, it was long before we found this blog/forum. I will say that I've found this fire to be quite liberating.  Having all of your things destroyed in the course of 25 minutes is quite the clean slate.  We likely won't replace 1/2 of what we lost with other, newer meaningless consumer possessions.