Is Renter's Insurance Worth It?

1. Coverage type. You'll have to choose between actual cash value and replacement value, and this can significantly affect the cost of your policy. If keeping the cost low is your top priority, go with cash value and you'll get reimbursed for lost items with depreciation and usage factored in. Your TVs and couches won't get you as much as what you paid for them, but you'll definitely get something. If you pay a little more on your premium and go with replacement value, your possessions get replaced with new items at an equivalent market price. The choice depends on what you own and what's available in your budget. I'd probably tend toward cash value to avoid paying too much each month, but you have to think about what matters to you and the risks you might be susceptible to.

2. Option to bundle. If you already have car insurance, get on the horn with your current insurance agent and see what they can offer. Insurers love to bundle for existing clients and you can usually get decent coverage at a nominal cost. Start with your current auto or life insurance provider and then see what other companies have to offer. This is probably the best place to start, even if it isn't the final solution.

3. Know what's covered. Renters insurance can leave people in the lurch when they don't read the fine print. If you live in Houston and your insurance won't cover damage from flooding, that's a big hole in your plan. In some cases you have to buy separate policies for specific natural disasters, so you can't just assume your policy covers against weather patterns and events common to your area. You might have to pay more or find a company with a more inclusive policy. It would be nice if insurance was more straightforward, but it's unfortunately up to you to do the work and find the right coverage.