4 questions to consider regarding renters insurance

After throwing down big bucks for your rent and deposit, the last thing you probably want to think about is adding another expense to your new place.

Although it may be an initial investment, purchasing renters insurance is actually the more economically prudent decision in the long run because it prevents you from spending a fortune in the event that your personal belongings aren't covered from accidents such as natural disasters, fire and theft. To determine whether or not you really need renters insurance, be sure to consider the following answers to your questions.

1. Will my landlord cover it?

One of the main reasons many people choose renting over buying is all the perks you get by having your landlord handle all of the repairs and maintenance needs of the home. Although your landlord does have his or her own insurance for the property, these types of policies typically only cover structural damage. So if your belongings are damaged in a fire, flood or accident that occurred in your building or apartment, you may be responsible for replacing these on your own. Furthermore, if you live near other tenants, you may also be responsible for covering the cost of any damage that affected their property.

2. Can I afford it?

Many renters may assume all types of insurance are equally expensive. Actually, a renters insurance policy can cost as low as $15 per month, which is an affordable rate for virtually every budget. You can even qualify for several discounts to this rate by taking a few simple actions. For example, you can bundle your renters insurance with your auto insurance and report special safety precautions in the building, such as sprinkler systems, alarm systems and security guards.

3. What are the odds something will happen to me?

No one expects to become a victim of a house fire, theft or other accident, yet millions of incidents are reported each year. In 2010 alone, the Federal Bureau of Investigations revealed that more than 9 million property crimes were reported – which was actually a decline from previous years. In the same year, fire departments responded to 384,000 home fires in the United States, according to the Centers for Disease Control and Prevention. Although they may seem like one-in-a-million circumstances, accidents can happen to anyone.

4. How much could my belongings really be worth?

Say you're a young college student with a simple lifestyle. You may not think your items are worth very much, but have you tried adding them together? Just think about the cost of your laptop, TV, wardrobe, furniture, electronic items and other personal belongings that don't seem like much individually. Now imagine losing all these items tomorrow and being faced with the responsibility of replacing them. Could you afford to replace everything you own? If the answer is no, you may be better off protecting yourself with renters insurance instead. Like any financially prudent individual, you're probably used to shunning non-essential expenses. However, it's important to look more closely at certain expenditures like renters insurance that may end up saving you money in the long run. For the security of knowing your belongings will be covered in the event of an emergency, the cost of a renters insurance policy certainly isn't too much.