You've probably accumulated a number of personal possessions, including furniture, electronics, and appliances. Whether your rent or own the roof over your head, insuring your possessions prevents financial loss in case of damage.

Renter's Insurance

If you rent, you are not required to insure the building; however, you should insure the contents. Renter's insurance policies cover your possessions from loss due to fire, lightning, theft, vandalism and water damage (excluding floods). According to the Insurance Information Institute (III), the average annual premium in 2007 was $182.

Homeowner's Insurance

Homeowner's policies provide protection for contents and the structure. Because of expanded coverage, homeowner's insurance is more expensive than renter's insurance. The average U.S. homeowner's insurance premium in 2007 was $882, according to the III.

Coverage Types

There are varying levels of coverage for both types. Your policy can pay actual cash value or the replacement cost. With replacement cost, there is no deduction for depreciation; however, premiums are higher.

Valuables

Valuable possessions, like jewelry, furs, and artwork, may not be fully covered by a standard renter's or homeowner's policy. You should consider "floater" policies that specifically cover them. Appraisals will be required.

Home Inventory

Take an inventory of your possessions. Keep receipts and photographic records of big-ticket items. Store your inventory record in a safe-deposit box. Proof of possession can speed your insurance claim.

Source:

Insurance Information Institute: Homeowners and Renters Insurance

Trusted Choice: Renters and Apartment Insurance