Think your landlord’s property insurance covers your personal belongings? WRONG! Read on to discover the different levels of coverage for when you rent and why it’s important to have it!

There is no reason to skip the renters insurance if you are going to make you home in a rental property. It’s an affordable way to make sure that your personal accumulations are covered in case of many types of damage or destruction; the National Association of Insurance Commissioners reported that in 2011, the average yearly rate for renters insurance was $187… for a year of coverage. These rates can vary on either side of the figure, based on the level of coverage you choose, how high your deductible is set, and the area in which you live. Still, not a bad price to make sure your tens of thousands of dollars’ worth of belongings are protected.

Not only is rental coverage affordable, but it also covers many different types of possible damage to your belongings. Renters insurance covers property damage from fire, smoke, water from plumbing or different household appliances, vandalism or theft, rioting, and natural disasters such as storms and volcanoes; however, flood and earthquake damage do not fall under this category. They are covered on separate policies! So if you live in an area where earthquakes are common, be sure to keep this in mind!

Regardless of the good reasons behind purchasing renter’s insurance, it happens to be a non-negotiable for some landlords; you may be obligated to have coverage if you choose to rent. So when it’s time to buy, you’ll have different policy options to look at.

1. Actual Cash Value – This coverage will replace your belongings up to the policy amount limit. However, it also deducts an amount for the depreciation in value of your possessions.
2. Replacement Cost – This is slightly more costly than Actual Cash Value, but for a good reason; you will be compensated for the value of your belongings (up to the policy limit) with no depreciation deductions. You may pay a bit more, but you will not lose out due to age or level of use of your items.