The amount of coverage you need depends on the value of your personal belongings. That may sound simple enough, but it does take some careful consideration. Many people tend to underestimate the value of their possessions and the true cost of replacement should disaster strike. Remember, renters insurance is a form of financial security, so you don't want to be left short.
If you happen to be a college student with very little in the way of furniture and appliances, $10,000 in coverage might be sufficient. However, if you've accumulated a good collection of furniture, a nice home theater system and other items you may need $40,000 or more in coverage.
The best strategy is to prepare an inventory of your possessions and estimate the value of each item. You don't need to get carried away and individually list every single item of clothing, etc. Use your own judgment when categorizing and grouping items, and focus on items with the highest value.
a value to each item, you need to consider whether to use the current value or the replacement value. This decision should be based on whether you intend to choose a policy option that pays actual cash value or replacement cost .
Having a list of your belongings will also prove to be very helpful if you suffer a loss and need to make a claim. Consider retaining your receipts, especially for more expensive items. This will help you value your possessions and provide good evidence in the event you need to make a claim.
If you want to be especially thorough in keeping a record of your belongings, consider taking photos or making a movie of the items in your home. Be sure to keep the photos/movie in a safe place away from your home where you can retrieve them if disaster strikes. You might consider keeping them at work, at the home of a friend or relative, or in a bank deposit box.