Last updated Apr 3, 2021
Disclaimer: This article is not legal advice. Any legal information is not the same as legal advice, where an attorney applies the law to your specific circumstances, so you should consult an attorney if you’d like advice on your interpretation of this information or its accuracy. You may not rely on this article as legal advice, nor as an endorsement of any particular legal understanding.
It can be difficult for renters to figure out the amount of renters insurance coverage they need. While it may be easy to estimate the value of a new sofa, mattress, and bed, it is also easy to forget how much it would cost to replace all of their clothes, shoes, toiletries, groceries, books, and other items. When answering the question “How much is my stuff worth?” renters should take into consideration a wide variety of factors.
If you are encouraging or requiring your tenants to purchase renters insurance, you can provide a value-added service by providing resources to help renters inventory, evaluate, and develop a value estimate for their belongings. This will ensure that they are properly covered and that they are compensated in the event of a renters insurance claim.
How can you help tenants answer the question “How much is my stuff worth?”
There are online renters insurance calculators that you can share with your tenants to help them properly develop a valuation for their personal property. In addition, you can develop a checklist of common household and personal items that tenants can use to develop an accurate inventory and valuation.
There are a number of mobile applications that renters can use to develop a personal property inventory. These include:
- Sortly, which allows users to scan and store information about items
- Memento, which provides an easily organizable and color-coded database
- MyStuff, which provides both scannable or manual inventory updates
- BluePlum, which allows users to add warranty information, manuals, and other documentation
Users should ensure that their chosen inventory app provides cloud storage or the ability to manually backup or print out records.
You can share information about valuation and documentation in your onboarding folder or in the content you provide at your website, blog, or via email. Remember, the goal from your perspective is to ensure that renters can pay their rent in the event that they experience a significant loss, damage of personal property, or are sued due to an injury that occurs on the property.
Is the renters insurance policy cash value or replacement value?
Renters insurance policies can be either cash value policies or replacement value policies. What’s the difference?
- A cash value renters insurance policy pays the depreciated value of items that are claimed. For example, a television would be compensated at its current value, not at the level of the original purchase price.
- A replacement value renters insurance policy pays the replacement cost of items that are claimed. For example, even if a computer now costs more than it did when it was originally purchased, replacement value would pay for the stepped-up, current cost to replace that item.
Whether purchasing replacement or cash value renters insurance, it is important to be as specific as possible when taking inventory. Tenants should include brand name, model, and date of purchase, if available, so that they can provide solid information in the event of a claim.
It’s also a good idea to take pictures or video of all of the items that should be included in the renters insurance coverage. That way the renter can prove possession of the item itself and can take photos or video of any serial numbers, model numbers, or other brand identifiers. This will help support their claims, if necessary.
Formulate a home inventory list for renters insurance
When developing a home inventory for renters insurance coverage, take into account the following categories:
Electronics would include televisions, DVD players, stereo systems, video game systems, Bluetooth speakers, smart home accessories, computers, tablets, cell phones, and other personal electronics. Don’t forget to include CDs, DVDs, and video games.
Furniture includes large items like sofas, beds, dressers, easy chairs, and dining sets along with bookcases, storage cabinets and small furniture items like side tables, ottomans, and footstools. Don’t forget children’s furnishings and pet furniture like dog beds and cat trees.
Accessories are easy to undervalue but can cost a lot to replace. These would include books, tchotchkes, and decorative items as well as picture frames, candles, throw rugs, throw pillows, blankets and seasonal decorations.
Clothing includes everyday clothes, professional clothing, sleepwear, and underwear along with shoes, seasonal clothing, outerwear and special occasion clothing. For children, inventory should include not only clothes they are currently wearing but also those that you may have purchased in larger sizes for them to grow into.
Housewares includes dishes, silverware, glassware, storage containers, linens, bedding, and cleaning supplies including brooms, mops, and other household items.
Don’t forget to be specific when describing housewares. There is a big difference between bargain bin crockery, glassware, and flatware and fine china, crystal, and silverware. There’s a big difference between basic linens and bedding and high-end, high-thread-count linens and bedding.
Outdoor equipment includes both recreational equipment -- like toys, scooters, and sports equipment -- gardening tools and implements, lawnmowers, grills, and outdoor furniture.
Tools would include both manual and automatic tools as well as paint and other home repair supplies.
Because they are considered high-risk for loss and theft, most renters insurance policies put limits on coverage for guns. If renters have expensive firearms, they should consider whether or not to add additional insurance for items of high value.
These would include household items like crockpots, pressure cookers, mixers, blenders, toasters, toaster ovens, coffee makers or espresso machines, robotic vacuum cleaners as well as decorative items like lamps and specialty light fixtures.
Renters with a home office should be sure to include coverage for furniture, electronics, and any other materials related to the operation of their business. In addition, renters should check with their workplace to determine if work-related equipment or items are covered through the company so that they don’t count toward the renter’s coverage limits.
Personal property limits apply to jewelry so renters should check to find out if their jewelry is adequately protected or if they should purchase additional coverage. In addition, they should be sure to secure proof of ownership and value in a safe deposit box or cloud drive.
Personal property limits apply to artwork so renters should check to find out if their artwork is adequately protected or if they should purchase additional coverage. In addition, they should be sure to secure proof of ownership and value in a safe deposit box or cloud drive.
Other insured items
Renters insurance also covers the replacement of groceries and toiletries. This can amount to several hundred dollars in the event of a fire or a loss of power caused by a covered event.
Exceptions and limits to renters insurance coverage
Your renters may find it easy to consider expensive items like jewelry or artwork when determining the amount of coverage they need. However, it is important to think through other high-value items that might need additional protection, including:
- Antique furnishings or decorative items
- Family heirlooms
- Rare autographs
- Rare books
- Collectible items
- Collections of baseball cards, comic books, or other memorabilia
- Premium appliances or upgraded fixtures and finishes
Renters should check with their individual insurance carrier for specific exceptions and limits that apply to their policies as well as options for additional coverage, if needed. In some cases, an add-on to the renters insurance policy may be available or a standalone policy may be purchased.
Consider offsite storage of expensive items
Of course, renters would want to keep an expensive engagement or wedding ring or a piece of artwork that is viewed and enjoyed on a daily basis within their home. However, personal property that is rarely used or that is kept purely for its financial value might be better and more securely stored elsewhere. Some possibilities include:
- If the item is a family heirloom, it might be better stored in a parent’s house and protected by their more comprehensive homeowners insurance policy.
- For small collectibles and rarely used jewelry, tenants may consider storage in a safe deposit box at their bank or credit union.
- For larger items of value, renters can consider storage in a climate-controlled secure storage facility which may offer added protection from theft, loss of power, and weather events. Many facilities require that items stored are insured, so renters should check their insurance policy to confirm coverage.
- For expensive and larger pieces of artwork not in everyday use, an art vault or loan to a museum may be a secure way to store valuable items. The renter should carry insurance coverage for the work and the museum should provide door-to-door coverage to cover transportation, storage, and display at their facility.
Ways to save money on renters insurance
Renters insurance carriers may offer a variety of options to help reduce the cost of insurance coverage. These may include the following:
Opt for electronic services
Renters may be able to save money on their monthly premium by accepting documents, statements, and billing information electronically. In addition, many insurance carriers offer discounts for autopay and electronic payment processing.
Look for discounts on policies
Renters who belong to professional associations, alumni associations, and other organizations may be eligible for discounted policies through their membership agreement. In addition, bundling renters insurance coverage with an existing auto or life insurance policy may provide discounted premiums.
Explore deductible options for the renters insurance policy
Renters insurance can come in a variety of deductible options. Generally, the higher the deductible the lower the monthly insurance premium. While it may be tempting to max out the deductible to keep costs low, renters should consider whether they will have the financial means to pay that deductible out of pocket if they have lost everything else.
Renters should keep their checklist, photos, videos, and purchase and valuation records in a secure location. Any available proof of purchase or value, including receipts, credit card statements, warranty information, or valuations from recognized experts should be stored, as well. These could be stored in:
- A safe deposit box
- A small, fire resistant personal safe
- A folder in a cloud-based storage platform like Google Drive or Dropbox
They should also be reminded to update their inventory on a consistent basis, especially whenever they make a major purchase or if they replace an item in their inventory.
If you choose to require your tenants to carry renters insurance, you may also want to help them explore and identify the right coverage options. In addition, you can connect them to reliable renters insurance carriers and tools to help them answer the question of how much is my stuff worth.
Through its partnership with Sure, RentSpree offers options designed to help renters, landlords, and property managers. As a property manager or leasing agent, you can use the RentSpree platform to provide notifications regarding tenant insurance requirements and help streamline the process of shopping for renters insurance coverage. This provides value-added service that protects property owners and renters while simplifying your operations.
Renters insurance policies from Sure provide coverage for personal property, personal liability, sewage or drain backup, loss of use and identity fraud. In addition, Sure renters insurance provides replacement cost insurance, a higher level of protection that ensures added peace of mind for your renters. When your renters are better protected, you and the property owner are as well.
Now that you know how to help your renters answer the question of how much is my stuff worth, it’s time to learn about how roommates can ensure adequate protection with renters insurance.
Continue to Chapter 6: Does Renters Insurance Cover Roommates? or jump to a different article.
- Renters Insurance Cost Benefits
- Which Are the Best Renters Insurance Carriers?
- What Is Rental Property Insurance?
- Is Pet Insurance Worth It and Should You Require It?
- How to Help Renters Find Out How Much Their Stuff Is Worth
- Does Renters Insurance Cover Roommates?
- Renters Insurance in California vs. Other States
- The Best Landlord Insurance and The Best Renters Insurance