Need renter’s insurance? Here are tips to consider

MARKETWATCH

NEW YORK — Unsure whether you need renter’s insurance? Some renters mistakenly believe their landlord or condo association carries insurance that covers their property as well. But such policies insure only against damages to the building and its structure, not to items in individual units.

Here are three things to consider when shopping for renter’s insurance:

UA basic home insurance policy for renters, known as an HO-4, covers losses to your household inventory from 17 types of perils. Among those are fire, civil riot, aircraft and vehicles, vandalism, theft, falling objects, flooding from home utilities, and electrical surge damage. Natural disasters are not included, so if you live in an area prone to earthquakes or mudslides, consider adding a separate rider.

UKnow whether the insurance company will reimburse you in “actual cash value” or “replacement cost coverage” should something happen to your home. As the name suggests, ACV coverage will pay you only what your property’s value was at the time it was damaged. Replacement cost coverage will pay you what the same laptop actually costs now. The only drawback is that you have to pay out of pocket to replace the missing or damaged item, then send the receipt to your company for reimbursement.

URenter’s insurance has the additional benefit of liability protection. If someone slips and falls in your apartment and decides to sue you, you would be covered for what the victim wins in court up to your policy’s limit, along with legal expenses.