Many renters dont stop to think about what happens if there is a fire, someone breaks in and steals their new TV or stereo, or a visitor slips and falls on their property. The sad truth is; you will be responsible! While your landlord has insurance that covers the actual building, that coverage does not include your personal property or liability for injuries which occur in the space you rent ~ be it an apartment or a house and yard.

If a fire should destroy or damage your home, your landlords insurance will cover the structure. It wont cover damage or loss of your belongings. Neither will it provide for the cost of temporary housing for you and your family.

You may think you dont own enough personal property to make the cost of insurance worthwhile. Youre probably wrong! If you sit down and add up the cost of everything you own, you may be in for a big surprise. Consider what you have invested in such things as:

Furniture and accessories

Electronics like TV, stereo, computers

Small appliances like microwaves, toaster ovens, etc.

Clothing

Art work like paintings or prints

Dishes, silverware and cookware

Sporting equipment

Books

Jewelry

Could you afford to replace all of these things?

Even worse, what would you do if a friend is injured on your property and decides to sue you for medical costs and more? Its a scary thought, isnt it?

Are you beginning to see why rental insurance may be a very wise investment?

The cost of rental insurance is based on several factors:

The dollar amount of your coverage

Deductibles

Whether you choose to be reimbursed for Actual Cash Value or Replacement Costs (more about that in a minute)

Where your rental property is located and the number of previous claims made, not only by you, but by others living in the same area.

Let me explain the difference between Actual Cash Value (ACV) and Replacement Costs. ACV is the value of your property at the time a loss takes place. For example, if your television set is five years old, its valued at much less than if it were brand new. The lesser amount is what you are reimbursed.

However, if you opt for Replacement Cost, youre paid whatever it costs to go out and buy a new TV with similar features. Insuring for replacement cost raises the amount of your premium so its a good idea to get quotes for both ACV and Replacement Cost policies. Then you can decide which option fits your needs and budget.

Another thing to keep in mind is that jewelry, valuable collections, and guns are usually covered under a separate policy or rider. If you own these kinds of items, be sure to tell your insurance agent. You dont want to find out after disaster strikes that they arent covered or that they arent covered for their true value. One way you can reduce the cost of your rental insurance is to check with whichever company insures your car. If they provide rental insurance you may be eligible for a multi-line discount.

Rental insurance may be worth the investment just for the peace of mind it offers you.