Suppose you came home from work to find your apartment had been totally trashed by a burglar. Or you walked into your living room and found your furniture standing in several inches of water. You can't assume your landlord will pay for the damage.

Your landlord's insurance doesn't cover your personal property:
Things like your clothes, stereo, furniture, television, bicycle, jewelry, personal computer, artwork and other items are not usually covered by your landlord's insurance against destruction or loss. Your landlord may be sympathetic about the flood in your living room or your stolen stereo, but your likely to be the one who'll have to buy a new couch or stereo system.

With renters insurance you'll be able to replace what's damaged or stolen.
Renters insurance covers your possessions against losses from fire or smoke, lightening, vandalism, theft, explosion, windstorm, and water damage from plumbing.

Renters insurance ALSO covers your responsibility to other people injured at your home or elsewhere by you, a family member or your pet and pays legal defense costs if you are taken to court.

How do you buy renters insurance?

Decide How Much Insurance You Need

Take an inventoryMake a list of everything in your apartment. Record model numbers, serial numbers, date and place of purchase. Take photographs or make a video of these items. Keep your inventory and visual record of your things outside of the apartment, maybe in a safety deposit box or at the office. An inventory will make filing a claim easier.

Check with an insurance company or agent about the following

Theft limits - Most renters policies have a $2,000 total limit on stolen jewelry, and a $5,000 - $10,000 limit for computers. Ask for a list of standard coverage limits so you'll know weather you need to get additional coverage for some of your belongings.

Case or replacement value - Your policy can insure your property in one of two ways - either for cash value or replacement cost. Cash value coverage takes into account the age and condition of items at the time of damage or loss. With this coverage, you'll be reimbursed for the value for the item minus depreciation. Replacement value coverage will pay the full cost of buying an item of similar kin or quality today.

Deductible options - A deductible is your out-of-pocket cost before the insurance kicks in. Keep in mind that the cost of your policy will be lower if you choose a high deductible.

Discounts - Insurance companies frequently offer discounts on renters insurance if you have another policy with them for your car or business. You can also get discounts if your apartment has a security system, smoke detectors, or deadbolt locks. More discounts might be available depending on your age or whether you're a nonsmoker.

Shop Around
Ask friends or relatives, look on the internet, or flip through the yellow pages to find the agent that is right for you. Call a variety of insurance companies and agents and ask a lot of questions. Keep your inventory handy, so you can find the amount of coverage that is most appropriate for you.

Review Your Policy
An insurance policy is a contract between you and your insurance company. Read it carefully. If you have questions of if something is unclear, call your insurance company representative. Don't sign the policy unless you fully understand the company's responsibilities as well as your own. For example, the company has a duty to pay your defense costs if you are sued, but it will be indicated as a condition in the policy that you must give your insurer complete, accurate and timely information about the incident.

Common Questions

Q. Does renters insurance cover all my belongings?
A. It depends. Some items like jewelry and computers often have a per-category theft limit (for example, some policies have a $5,000-$10,000 limit for computers). For these, you may want to buy a "floater" which provides higher limits and broader coverage than those included in your basic policy.

Q. If I file a claim, will my policy be cancelled?
A. If you didn't cause the loss or damage, your insurance shouldn't be affected. If you were at fault-if you caused a fire by smoking in bed for example- the insurance company might decide not to renew your policy. Your insurer might also do the same thing if you file several claims within a short time, regardless of fault.

Q. Is my bike or car covered by renters insurance?
A. Your bike is covered, but vehicles aren't. you need to get a separate auto insurance policy to protect your car, van or motorcycle.

Q. Is my property, such as a laptop computer, covered away from home?
A. Yes, but coverage may be limited and the conditions of the coverage may vary. You should ask your insurance agent for details.

Q. As a student, am I covered by my parents' policy?
A. If you're a full-time college student and part of your parents' household, their homeowners or renters insurance might give you limited coverage in the dorm, but not if you live off campus.

Q. Can I purchase a renters policy with my roommate or domestic partner?
A. It depends. Regulations differ from state to state, and policies might also differ from company to company. Find out what regulations apply in your state and then shop around to find an insurance company that suits your needs. Some insurance companies allow unmarried couples who have been living together to obtain joint coverage, rather than two separate policies. But a domestic partner is usually not automatically insured like a husband or wife under the partner's policy. He or she must be specifically named.

Q. What happened if something I have rented or borrowed is stolen?
A. Items that are "in your possession" are covered under a standard renter's policy, whether they are things that you've brought, received as gifts or rented.

What if I have problems dealing with my insurance company about a claim?
A. Make sure you have provided all the documentation the company requested. Talk things over with your agent or company representative. Also, your state insurance department or local consumer protection office can answer questions on filing claims and also take complains.

Glossary of insurance terms

Actual cash value: Insurance under which the policyholder receives compensation equal to the cost of replacing damaged or stolen property minus an amount for depreciation for age and use. For example: A tree falls through your roof destroying your eight year-old sofa that cost $1,200 when it was new, but is now only worth $400. With an actual cash value policy, you will receive $400.

Agent: Insurance salesperson.(a) An independent does not work directly for an insurance company and sells the policies of more than one insurer;(b)An exclusive agent works for one insurance company and only sells it's policies.

Claim: Policyholder's request for payment by an insurer for a loss covered by a policy.

Conditions: Part of an insurance policy that states your obligations and those of your insurance company that must be followed for the policy to be in effect.

Deductible: Amount you pay out of pocket per claim or per accident. This amount is subtracted from the total paid by your insurer. If the claim is for $500 and your deductible is $100, your company will pay $400.

Depreciation: Reduction in the value of property due to age and use.

Domestic partners: Term used to describe unmarried couples living together.

Endorsement: Attachment to a policy which adds to or changes the contract's original terms.

Floater: Additional coverage for items not included in the basic policy such as expensive jewelery or antiques.

Insurance department: Agency that enforces rules for the insurance business in each state. A valuable source of information about all types of insurance. The department also handles consumer inquiries and complaints.

Inventory: List of your possessions with description, serial numbers when appropriate, and information on when and where purchased.

Liability coverage: Insurance which pays the losses of other people to whom you unintentionally or through negligence cause injury.(a) Bodily injury liability coverage pays medical costs of others and your legal defense costs if you physically harm someone;(b)Property damage liability coverage pays claims against you if you damage someone else's property.

Negligence: Failure to exercise a generally accepted level of care and caution.

Peril: Cause of loss.(Examples: fire, theft.)

Personal property insurance: Protects against the loss of, or damage to, possessions caused by specific perils.

Policy period: Amount of time an insurance policy is in forced.

Premium: Amount you pay for insurance coverage.

Policyholder: Person who buys insurance.

Proof of loss: Documents you give to the insurer to support your request for payment of a claim. The company uses these documents to determine whether and how much it will pay. (Examples include written repair estimates and police reports.)

Replacement costs: Cost to replace property with items of like kind and quality without regard to age or condition of the original item.

Theft limit: Highest amount an insurance company will pay on certain items that are stolen from your home. For instance, some polices have a $5,000 limit for computers. If your computer is worth more and you want to cover it for it's full value, you need to purchase a floater (see glossary above).

Phone numbers for state insurance departments

AK: 907-465-2515
AL: 334-269-3550
AR: 501-371-2600
AZ: 602-912-8400
CA: 916-492-3500
CO: 303-894-7499
CT: 860-297-3800
DC: 202-727-8000
DE: 302-739-4251
FL: 850-922-3100
GA: 404-656-2070
GU: 671-475-1817
HI: 808-586-2790
IA: 515-281-5705
ID: 208-334-4250
IL: 217-782-4515
IN: 317-232-2385
KS: 785-296-3071
KY: 502-564-3630
LA: 225-342-5900
MA: 617-521-7794
MD: 410-468-2000
ME: 207-624-8475
MI: 517-373-0220
MN: 651-297-7161
MO: 573-751-4126
MS: 601-359-3569
MT: 406-444-2040
NC: 919-733-3058
ND: 701-328-2440
NE: 402-471-2201
NH: 603-271-2261
NJ: 609-292-5360
NM: 505-827-4601
NV: 775-687-4270
NY: 212-480-6400
OH: 614-644-2658
OK: 405-521-2828
OR: 503-947-7980
PA: 717-783-0442
PR: 787-722-8686
RI: 401-222-2223
SC: 803-737-6212
SD: 605-773-3563
TN: 615-741-2241
TX: 512-463-6464
UT: 801-538-3800
VA: 804-371-9741
VI: 340-774-7166
VT: 802-828-3301
WA: 360-753-7301
WI: 608-266-3585
WV: 304-558-3354
WY: 307-777-7401

HOW do you file a claim?
As soon as you become aware of a loss, note the date, time of day and list of goods stolen or damaged. In case of a theft, call the police as soon as possible. Then, contact your insurance company or agent to report the loss and get the appropriate claims form. Written and documented reports of losses are especially important when theft is involved. Try to include everything and carefully assess damages: amended claims could take longer to pay.

For more information, call the National Insurance Consumer Helpline (NICH) at 1-800-942-4242

Reviewed and approved by The National Consumers league.