If you rent an apartment and are fond of your flat screen TV, mini blender and superior hot sauce collection, you might want to buy renters insurance.

Why?

Because if someone breaks into your place and decides they’re also fond of your stuff, a renters insurance policy will cover the cost of replacing the items your uninvited guest walked off with.

Most policies also kick in for several other situations that require you to replace your personal property.

How does renters insurance work?

Think of it like this: The property owner will have insurance that covers damage or repairs to the actual building, but you’re responsible for paying for any damaged or lost items inside your apartment.

In general, renters insurance covers the contents of your apartment if they are stolen, damaged or destroyed by causes you can’t control, such as theft, fire, power surges or water damage. But read the fine print carefully, because most policies won’t pay if your loss results from an earthquake, flood or certain other natural disasters.

You can sometimes get extra coverage if you live in an area prone to shaking ground or rising waters. Ask your insurer to clarify.

Also, be aware that some policies cap how much they will pay for certain categories of items, such as electronics, so make sure you’ll get reimbursed for the amount you actually need. To know what coverage you need, spend some time estimating replacement costs of the items most important to you.

It’s also a good idea to take photos of your belongings so you have a record of what you own if you ever need proof.

Negligence and liability coverage

Another important consideration is whether your insurance policy covers you or others if you’re negligent, meaning you’re responsible for the damage (think an overflowing laundry machine leaking into your downstairs neighbor’s apartment or a fire started by a candle).

Additionally, some policies include liability coverage, which helps to pay if someone is injured at your place. For example, you could be responsible to pay your friend’s medical bills if they trip and fall over your lovely, but misplaced, ottoman.

Do I have to have renters insurance?

It depends.

Some property owners require insurance, while others do not, and sometimes it depends on your circumstances. For example, if you have a pet, you may need to provide proof of insurance.

Also, be aware that usually a landlord has the legal right to require insurance even after you’ve moved in, but they do need to give you proper notice.

Is renters insurance expensive?

Most people want to find cheap renters insurance that provides enough coverage should they need to replace all or certain items.

The good news is that with a little searching, you can likely find adequate coverage well within your budget. Many providers offer online quotes to make things easy. If you already have car or other insurance, your provider might offer a significant discount if you bundle your renter’s insurance with your other policies.

It’s definitely worth asking about.

Before you sign up, it’s good to read reviews about the service other people have experienced from the company, because in the end, you need to know that your policy and insurer will step up and help out should you ever need them.

Photo by Daniel Tausis on Unsplash

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