A landlord’s insurance policy, covers the building and any outbuildings and protects the landlord against lawsuits arising out of accidents on the property. However, landlord insurance does not cover the personal possessions of the tenant. This is a piece of information that seems to come as a shock to many tenants. A staggering number of renters do not carry renters insurance. While some renters may assume that they are covered by some mythical insurance umbrella held by the landlord, others simply do not associate the need for insurance with their own circumstances until it is too late. They aren’t homeowners so they don’t need homeowners insurance, right? They do not think beyond that question and many probably don’t even know that tenants’ insurance exists. If you rent, look around. You probably have a pretty substantial amount invested within those walls you do not own. A stereo, high-def TV, a business and a leisure wardrobe, all of those small appliances in the kitchen, the electronics in the study; even if your furniture was bought second hand or from WalMart it all adds up and should disaster strike, everything will have to be replaced out of pocket. And there is the matter of liability. Should your television repairman trip on the front walk he will probably sue your landlord. But if the repairman takes a swan dive over a poorly positioned coffee table inside your apartment or if sweet little Fluffy decides that his ankle looks like lunch it will not be your landlord’s problem. It will be yours. Tenant’s insurance covers personal property within a home or apartment against the same types of loss covered by homeowners insurance – fire, theft, vandalism, and water damage (but not flood damage and probably not earthquake damage either) as well as protecting your interests should someone have an accident within your dwelling unit for which you might be held liable. Make a list of what you own beyond the ordinary and go over the list item by item with an experienced insurance agent. The cost of renters insurance will also vary depending on the deductible chosen, typically $250, $500, or $1,000, meaning that the insured will have to pay that much toward any claim before the insurance kicks in. Also, policy prices will vary depending on whether belongings are to be valued at replacement cost or at actual cash value. The difference is critical at a time of loss. If a five-year-old stereo is stolen, a replacement cost policy will pay an amount sufficient to replace the item with a comparable unit; an actual cash value policy will depreciate the item a percentage amount for every year since it was purchased, often as much as 50 percent. While some recovery is better than none, talk with your agent about the cost of a full replacement cost policy. 
