Even if you don't own, insurance a must


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So you are getting ready to move into your new apartment. You've done your research, found a nice place in a good neighborhood, and the landlord seems to keep the property in tip-top shape.

As the last of your belongings are moved in, you plop down on the couch, happy to be done with all the details involved in getting a new apartment.

But think twice before calling your mission completely finished. What would happen if there was a fire or theft in your apartment? You might think that your property would be covered by your landlord's property insurance, but you would be wrong. The insurance building owners have usually only covers the structure itself, not the renters' property inside.

To ensure your "stuff" is insured, you need to purchase renters' insurance, a close cousin to homeowners' insurance.

There are several things to think about when looking at renters' insurance. For one, look at the wording of what the policy will cover in terms of replacing items. The insurance terms "actual cash value" and "replacement cost coverage" may sound similar, but the two could give you significantly different results.

Replacement cost coverage does just that: it reimburses you in the amount that it takes to replace your belongings with like items.

On the other hand, an actual cash-value policy reimburses you for what your belongings were worth at the time they were damaged or destroyed. And that can be significantly lower than a replacement cost-coverage policy because of depreciation and other market factors.

Another thing to consider is whether your policy will cover additional living expenses if your property becomes uninhabitable due to fire or flood. Most renters' policies will provide at least some additional living-expense benefits, but it is best to know in advance what you will be covered for and how much the policy will cost you.

Like homeowners, renters should also make sure you have all of your property documented. Product identification numbers and models should be written down and stored at another location. It's also a good idea to take photos or video of rooms as another documentation measure.

Melinda Wieland has been an agent for American Family Insurance since 2009. Her office is located in Iowa City.

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