For individuals who are currently renting their home, whether it be a condo, apartment, or house, renter’s insurance is an invaluable, and often overlooked necessity. Many people assume that because they don’t own the property where they are living, their landlord’s insurance will cover the renter’s losses. This is a mistaken belief – homeowner’s insurance often only covers property damage, and not the contents of the property. In the case of fire, theft, or even water damage, the possessions of a renter will not be insured.
Renter’s insurance is a low-cost way to ensure that a renter’s possessions are protected. It covers damage to clothes, furniture, electronics, jewelry and other personal possessions, but also covers situations where a renter may be personally liable for an incident. On the downside, though, while renter’s insurance covers many different "Acts of God," it often doesn’t cover earthquake or flood damage, so it is important to check the policy that you are purchasing. Another important clause to check is whether the policy has "actual value" or "replacement value" coverage. "Actual value" only pays the value of the item at the time it was damaged, while "replacement value" pays the full value of the item at the time of purchase.