Do you rent an apartment or condo? If so, do you have renters insurance to protect your belongings and to cover you against liability claims?

A surprising number of renters don’t bother with insurance. Some assume they’re covered by their landlord’s policy. Wrong! Usually that covers only damage to the building and liability claims against the landlord. Others say their belongings aren’t worth enough to justify the cost. But add up how much it would cost you to replace everything you might lose in a fire and you’ll be surprised. In most cases, the cost of insurance is a small price to pay for the protection you’ll receive.

Typical protection

Renters insurance, sometimes called a tenant policy, typically protects against three things:

1. Loss or damage to your personal belongings from fire, theft, etc.
2. Liability claims from someone injured in your apartment
3. The cost of temporary living expenses if your apartment is made uninhabitable by some catastrophe
   
   

When you buy renters insurance, you’ll have to decide the amount and type of coverage. Your agent can help you estimate the value of your belongings. You can either choose actual cash value coverage or replacement value coverage.

The first pays you the estimated value of items at the time of loss, based on their age and condition. The second pays the cost of replacing items with equivalent new items, up to the maximum value of coverage. The second method will pay you more, but obviously the premium will be higher. Try to identify anything of special value, such as expensive jewelry or electronic equipment. You may need a policy rider to cover the full amount of these items.

A few tips

• Bundle for discounts. You may receive a discount if you buy your renters insurance and car insurance from the same company.
• Save with roommates. If you have a long-term roommate, ask if you can take out a joint policy instead of two separate ones.
• Know when and where kids are covered. If you have children living away at college, check whether they’re covered under your homeowners policy. Once they leave college, though, they’ll need their own insurance.
• Take inventory. Create a thorough inventory of your belongings, recording the model and serial number of any equipment and take plenty of photos. This could be invaluable to support your claim if you ever have a loss.