You come home with the clothes on your back, couple of bucks in your wallet, keys to your car. You stand before a partially burned down rental house. Its still smoldering, smoke/soot/ and water are on everything in site. The repairs to the home will be costly, extensive, and a lengthy process as the property owner himself has to work with his personal insurance company to complete repairs prior to move in. Reality...You are not staying here tonight. Now what? How would you live from that very moment on without some form of coverage? Sure the property owner MAY have coverage to get you replacement housing...MAYbe....Truth be told they too may not have coverage. Oops is an understatement from either party.
Remember your property is YOUR responsibility. Period. You stuff is simply that...yours. The homeowner nor the property management company are responsible for your belongings.
Though purchasing a renters policy is typically optional as its an expense incurred by the tenant, consider how embarrassing and financial foolish it would feel to justify saving $10-$20/month with no coverage when you are left with nothing but your witty decision? What are the odds...will be the last question you'll be asking yourself if/when it does happen!
At a minimum you want Renters Insurance. I recommend you request coverage specifically with an endorsement for REPLACEMENT COST (replacement value) not just CASH VALUE (depreciated value) paid out should you have a claim. You don't want to find out your $20k+ in personal property coverage is covering only $10k worth of depreciated value items. You want to be paid full value for all items you replace at today's cost. many other coverage's are typically attached to these policies in additional to personal property coverage, i.e. Liability, Medical,ect. Ask specifically what are the LIMITATIONS and/or casualties NOT (flood?) covered by the policy. You want to be clear you understand all available options. Its too CHEAP not to ask about options.
Typical deductibles (amt. you are responsible for should a claim occur) start around $500.
Most renters have more than $20,000 worth of belongings in their residence.
Could you afford to replace everything if you had a loss? Example below...
Personal Property Sample Replacement Value
Furniture $ 6,000
Military uniforms and equipment $ 5,000
Clothing $ 3,500
TV, DVD, stereo, movies and music $ 1,500
Computer equipment and accessories $ 1,500
Watches and jewelry $ 1,000
Artwork, decorations and collectibles $ 1,000
Dishes, cookware, silverware $ 500
Camera equipment $ 500
Appliances (microwave, washer, dryer) $ 400
All other property $ 4,000
Total amount to replace everything $24,900
Generally a renter just needs to carry insurance for the contents (in other words, the renters possessions) but should definitely check the lease to make sure the are no other insurance obligation there. A good place to learn about your insurance needs is United Policyholders (see link below). There is a lot of information at the non-profit's website.
Prudential Real Estate of the Rockies
If you are the landlord - getting a simple "fire policy" is usually the way to go.. Again, call the company you have your car with, and they will go over the coverages with you.