RENTER HOMEOWNERS INSURANCE

If you rent an apartment or own a condominium, you need insurance to protect your belongings. While your landlord or condo association might have insurance, it only protects the building. Your belongings are not covered under those policies.

What standard policies cover
There are several types of residential insurance policies. The HO-4 policy is designed for renters, while the HO-6 policy is for condo owners. Both HO-4 and HO-6 cover losses to your personal property from 17 types of perils:

. Fire or lightning
. Windstorm or hail
. Explosion
. Riot or civil commotion
. Aircraft
. Vehicles
. Smoke
. Vandalism or malicious mischief
. Theft
. Damage by glass or safety-glazing material that is part of a building
. Volcanic eruption
. Falling objects
. Weight of ice, snow, or sleet
. Water-related damage from home utilities
. Electrical surge damage.

Floods and earthquakes aren't on the list. If you live in an area prone to either, you'll need to buy a separate policy or a rider. In some coastal regions, where hurricanes might pose a threat, you might also need to buy a separate rider to cover wind damage.

Actual cash value vs. replacement cost
One thing to look at is whether the insurance company will offer "actual cash value" (ACV) or "replacement cost coverage" for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $300, it would be worth significantly less today. While you'd still need to spend about $300 for a new TV, your insurance company will pay only for what the old one was worth, minus your deductible.

Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost.
"[Replacement cost] coverage will reimburse you for the actual replacement cost of your property, up to the limit stated in your policy," notes Mike Kreidler, insurance commissioner for the state of Washington. "An insurer will generally make an advanced payment to you for the 'used value' of the property, less your deductible. Then if you replace the property, you can receive reimbursement for the actual price paid. Your agent can explain this part of the claim process in more detail."

In some regions, most insurers write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim.

Let your agent know about any particularly valuable items you have. Jewelry, antiques, and electronics might be covered up to a certain amount. If you have some items that are unusually expensive, such as a diamond ring, you'll probably want to purchase a separate rider. If you don't talk to your agent about an expensive item when you buy the policy, you probably won't be able to recover the loss.

Take inventory
To ensure you are compensated for any belongings you lose from a fire, storm or other catastrophe, you should inventory all of your personal belongings. "Many people learn after a fire or storm that they didn't have enough personal property coverage. Making an inventory will help you decide how much insurance you need. It also will simplify claims," says Texas Insurance Commissioner Jose Montemayor. "Your inventory should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place."

Footing the bill when your home is unlivable
If your apartment or condominium becomes uninhabitable due to a fire, burst pipes, or any other reason covered by your policy, your insurance will cover your "additional living expenses." Generally, that means paying for you to live somewhere else.
This coverage has a limit of about 30 to 40 percent of the total value of the policy. So, if you're insured for $100,000, your "additional living expenses" limit will be $30,000 or $40,000, depending on your policy terms. Your insurance company will continue to pay while your home is being repaired or rebuilt, or until you permanently relocate. Sometimes 12 months is the longest an insurance company will continue paying. With some policies, you're limited to what the insurance company considers a "reasonable length of time."

Additional benefits
Renters and condo owners insurance policies have additional benefits. For example, a waterbed liability provision is standard in most renters and condo owners policies. If your waterbed bursts and the water ends up in the apartment below yours, your insurance would cover the damage.

Liability protection is also standard with most renters and condo policies. This means if someone in your unit slips and falls, you're covered for any costs, up to your liability limit. If this person sues you, you're covered for what they win in a court judgment as well as your legal expenses, up to your policy's limit.

Keeping your premium low
Just like any other type of homeowners insurance policy, your premium depends on a number of factors: where you live, your deductible, your insurance company, and whether you need any additional coverage.

"Homeowners insurance can be costly, but necessary. The premiums charged for homeowners insurance vary widely from company to company, so it pays to take the time and effort to shop around to get the best value for your insurance dollar," says Kate Kiernan-Pagani, a spokeswoman for the Connecticut Insurance Department.

There are ways to reduce your renters or condo owners insurance bill.
Increasing your deductible (the amount you pay before your coverage kicks in) is one strategy. Make sure you can afford whatever deductible you choose.

If you're thinking about getting a dog, you might want to think twice. Some insurance companies are reluctant to write policies for owners of certain breeds.

Most insurers offer a discount for "protective devices," including smoke and fire detectors, burglar alarms, and fire extinguishers.

Some insurers might offer discounts to policyholders who are over age 55 and retired. Others might offer a discount if you buy both an auto and renters policy (called a multi-line discount).