Do I really need renters insurance?

Renting an apartment or home is a great way to have your own place without having to worry about fixing the plumbing, painting the windows or upgrading the refrigerator yourself. All of those problems are for your landlord to handle.

Depending on what your rental lease states, other benefits to renting could include: having roommates, pets, space for parking your car and picking out paint choices for the walls.

With landlord insurance, if a disaster were to damage your unit, it's likely your landlord would be responsible for fixing or replacing it. But if that disaster were to damage your property inside the unit, then you might face spending some money to repair or replace your property. Renters insurance can typically help cover your losses in such a situation.

Another benefit of renters insurance you may not be aware of is it can include liability protection. This provides you with legal representation and protection against judgments in the event that you or anyone in your household is accused of accidentally causing injury or damage to property. Without liability protection, any of the following assets you have could be at stake:

* Retirement accounts

* Non-retirement investments

* Liquid assets (checking, savings, CDs, money market accounts)

* Personal property (actual value of all your possessions if you sold them: cars, boats, jewelry, furniture, etc.)

* Home and other real estate equity

Many people may question how much renters insurance they need to purchase. A good way to answer this is to determine how much it would cost to replace everything inside your apartment. The figure is often much more than you may think. Apartmenthunters.com offers a guide suggesting replacement value of property for a typical two-bedroom apartment. Items to put on your replacement list include:

* Clothes

* Kitchen utensils

* Jewelry

* Electronics including TV, stereo, CDs and computers

* Furniture

* Linens

It may also be a good idea to take a walk around your unit, taking photographs of costly items, or ones that are very important to you personally and save those photos in a separate location from your home such as a safety deposit box.