You probably have more belongings than you realize, even when downsizing to a small apartment. Replacing personal property out-of-pocket is costly. Insurance shifts this burden to an insurance company when contents are damaged by covered losses like fire, tornado, theft, and more.
A personal property inventory is the best way to identify and evaluate contents coverage needs. Choose a coverage limit based on the total value of your possessions. Be aware that depreciation affects personal property claim settlements. Contents replacement cost coverage is available as a policy add on.
Renters policies also provide personal liability protection. Part one, liability coverage, pays when you, family members that live with you, or pets are responsible for another person's bodily injury or property damage. Legal defense costs are also covered. Liability limits typically range $100,000 - $500,000. Choose a personal liability coverage limit in line with your financial assets.
Part two provides medical payments coverage, with limits often between $1,000 - $5,000. Medical payments pays when someone is injured on your property, and in certain off-property situations. Fault is not a factor in a medical payments claim.
The final coverage, additional living expense, comes into play when an insured loss forces you to temporarily relocate. it pays for a hotel, extra food costs, and more while the rental property is rebuilt. A.L.E. is typically 20% of the contents limit.
Talk to a local property insurance agent about renters insurance, including cost and coverage specifics.