In the past two years, I’ve known two different families who have lost all of their possessions because the homes they rented were destroyed by fires. Thankfully, in both cases, the families were not hurt. Neither family had renters insurance so none of their belongings were covered. These situations are traumatic enough, but add the idea of replacing all of your necessities out-of-pocket, including clothing–unbearable. Fortunately both families are very well-loved. In both instances their friends and family collected furniture, clothing, appliances, food, toiletries, money, etc. that helped them to start their lives over. This is one reason why tenants should carry renters insurance.

Renters insurance covers items that are lost due to fire, smoke, lightning, vandalism, theft, explosions or windstorms. However, it does not cover flood damage, only flood insurance does. Your landlord’s homeowners policy does not cover the items you own inside the house or apartment. Their insurance only covers the building and any items that they may own in the house. If someone breaks through a window in your home and steals your television, your landlord’s insurance will pay for a new window, but not a big screen.

Renters insurance is inexpensive compared to homeowners insurance or your other bills, unless you own lots of expensive things. Katie, an agent at Patrons Insurance Agency recently quoted me $382 a year for $20,000 worth of coverage, which works out to be $32/month. That’s less than all my bills, except Netflix. To find out how much coverage you need, use this free online tool.

Renters insurance does more than pay for your stuff. It also offers liability, which is probably more important. This protects you if someone comes into your home and injuries themselves. If they choose to sue you, your renters policy will help pay for medical expenses and any of your legal fees, both of which can cost a great deal more than your computer, t.v., or couch. If you own a rental property, you may want to require your tenants to purchase renters insurance because you could potentially be sued as well. Talk to an agent to discuss your options.