When you buy a Renters policy, you will have to decide how much Personal Property coverage to purchase. It can be very difficult to calculate what it would cost to replace everything you own, if a fire or tornado destroyed it all.
When discussing this question, often clients will think through some of their bigger ticket items, such as furniture, electronics and suchlike. While the cost to replace such items can add up quickly, they are just a small part of what you have to insure. All your other stuff may seem to be of inconsequential value, but replacing it all can add up quickly. Think about this: how much would it cost to replace every item of clothing that you own? That’s just one example.
There are so many types of things to think about when estimating your insurance needs. Here’s just a partial list, in no particular order:
It would not be quick or easy to come up with an accurate estimate of your personal property replacement cost; you would need to complete a thorough personal property inventory first. If you are like most people and don’t have time to do that, then you will need to make an educated guess. In my conversations with clients, I normally advise people to make your best guess and then round up a fair amount.
I encourage rounding up for a couple reasons. First, I believe it is very easy to underestimate how much your personal property would cause to replace. Second, adding additional Renters insurance is usually dirt cheap. Sometimes you can double your Personal Property coverage for an extra $5 a month or so. What I have found helpful to clients is quote several different limit options so people can see the premium difference and use that as a factor in making their decision.
Your insurance needs are something you certainly don’t want to have to think about every day, and you hope you won’t need to actually use your insurance. But it’s wise to spend a few minutes thinking through this topic, so that if a loss does occur, odds are higher that you are sufficiently insured.
About the Author
Agent Ken Cobb
Ken is the owner and principal agent at Pine Country Insurance in Bemidji. Active in the insurance industry since 2000,Ken uses his years of personal insurance knowledge and experience to assist clients in customizing insurance coverage to fit their needs. Ken considers himself a "farmer" rather than a "hunter"; rather than focusing on writing a lot of new policies as quickly as possible, he works on cultivating long term relationships based on trust with his clients. When writing new policies and meeting for annual reviews, Ken spends time with his clients explaining and helping them understand their insurance, and he is also pleased to share his knowledge with his blogging audience as well.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.