Determining how much coverage to get is a personal preference and assessment. There are several things to consider when determining how much renter's insurance you'll need and you'll also need to make decisions regarding the deductible, actual cost or replacement cost, and liability insurance.
Deductible: If you wish to have a high deductible, you can get a lower monthly premium. However, if you get a high deductible, only amounts that exceed the deductible are covered by an insurance claim.
Actual Cost or Replacement Cost: Determining how to value your property is again a personal assessment. If you wish to get coverage for the actual cost of your items, you will pay a lower insurance premium, but you may not be able to adequately replace all of your items. If you choose the replacement cost, you will get more money in a settlement from the insurance company, but you will pay more per month in order to choose this coverage. To illustrate the difference between actual cost and replacement cost, consider the situation where you have a fire and your office area is destroyed in the fire. A few of the assets in your office area may include furniture, filing cabinets, shelves, and a computer. If your computer is a few years old, the actual cost of the computer may be just a few hundred dollars. However, the replacement cost would be the cost of a new computer with similar specifications. This difference could be in the thousands of dollars. In this situation, choosing to have coverage at the replacement cost is more beneficial as it is the difference between $200 for the value of your computer or $2,000 for the value of a replacement computer.
Liability Insurance: Getting liability insurance on your renter's insurance can be a very prudent move to make. The reason is that any incident which occurs on the property is covered by liability insurance. If you have a friend or family member hurt on your property and they in turn sue you, liability insurance covers the injury and subsequent lawsuit. If you accidentally set a kitchen fire which destroys not only the stove, but the cabinetry around the stove, liability insurance will pay for the replacement costs of the incident.