How to buy renter's insurance

As a footloose, futon-owning, one-cereal-bowl-to-your-name renter, you may not think insurance matters much.

Think again.

Consider the potential disaster scenarios from which it could protect you -- theft, fire, riots, smoke or water damage, vandalism, and volcanoes (hey, you never know). Insurance can even cover costs you incurred if you can't live in your pad for any of these reason

Consider, too, what renter's insurance could help you recoup in the event of any of the above: computer, stereos, CDs, furniture, clothes. Suits cost more than chump change; in fact, everything in your closet adds up shockingly, even if you thrift like mad. When you compare the price of replacing your beloved (and maybe pricey) things with the yearly cost of insurance, it's a no-brainer. Depending on where you live, how luxe your stuff is, and any special add-ons to your policy, you're looking at about $150-$250 a year -- roughly $25,000 in coverage with a $500 deductible.

Begin weighing your insurance options with a good, thorough itemization of your humble (or not) abode. As you puzzle over receipts for goods (or, like me, run around eyeballing your crud to recall what you paid for it), keep in mind that insurers have two definitions of the value of your goods. Actual cash value is the price you originally paid, while replacement value is what it would cost you now to replace that item if it were ruined, stolen, lost or swallowed by flowing lava. Be aware that choosing a policy that covers the replacement value of your stuff -- instead of the actual cash value --might cost more.

You have to take into account depreciation, too. How much would you really get for that busted-up "I'm Out for Trout" baseball cap? Maybe you spent 10 hard-earned dollars on it originally, but now it's only worth 50 cents. Ditto with higher-priced items such as computers, stereo equipment, phones and clothes.

So, make your list and check it twice. Set aside the following for separate itemization:

• Any paper copies of securities (that's stocks or bonds to you and me)

• Valuable documents

• Jewelry and watches

• Boats or RV stuff (I decided against the RV in New York City, but it might be an item on your list)

• Other valuables, such as family heirloom silver

You'll also need to separate any equipment you use only for business, as it may need to be itemized on a small-business policy.

Save and file receipts for your stuff, photograph your things and your apartment (for comparison later should disaster strike and render your stuff unrecognizable with blight), and (if you wat to go totally nuts) engrave anything really valuable with either your Social Security number or driver's license number. In the event of theft, they can be traced more easily.

Once you've really worked over your list, total the value to get a sense of what level of coverage you'll need.

If your actual cash value list totals up to under $5,000, you might want to weigh the value of this stuff against the fact that $200 (or thereabouts) in premium costs every year adds up, while your stuff continues to depreciate over time.

Next step, gather and compare offers. Not all insurance companies offer renter's (sometimes called tenant's) insurance, and those that do might not be licensed to sell in your state.

Renters have computers, bikes, and jewelry, just like their landed friends. Tally up your things and see if it makes sense -- better safe than sorry.

Insurance trivia

• For those poor souls along the San Andreas Fault and anywhere close to the Mississippi, keep in mind that earthquake and flood insurance aren't usually part of the standard package and require extra coverage.

• Renter's insurance always covers personal property -- that's your stuff, chief -- but may also include family liability coverage, guest medical protection, or both. Family liability covers you when your kid -- or you -- slug Pugsy in a barroom brawl and someone has to pay to wire Pugsy's jaw shut. Guest medical protects you when your houseguests get injured on your property and cheerfully sue you -- nice guests, but it happens.

• If you live within five miles of a fire station or within 1,000 feet of a fire hydrant, tell your insurance company. Might cut you a bit of a break on the premium. Same goes for nonsmokers -- you're less likely to burn the place down and file a claim.

• Some policies cover items lost when you're traveling -- ask the insurance company if you're not sure.

• Beefing up home security (adding locks, alarm systems, smoke detectors, etc.) might get you more favorable premium terms.

• Using the same insurance company for multiple policies -- getting renter's insurance from your auto insurer, for example -- could be a savings, too.