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Wherever you live, that’s your home. Although you may not own the structure, you do own the possessions within it, and that’s what homeowner’s insurance protects. In this context, homeowner’s and renter’s insurance are the same thing.

If you’re thinking, “My stuff isn’t worth much, so why would I spend the money on insurance?” allow me to explain. It’s easy to underestimate the value of the belongings you’ve collected over time. How much would it cost to replace all your clothes, accessories, bedding, TV, computer, furniture, and kitchenware? How much would it cost to replace your children’s clothes, toys, school supplies, and electronics? When you start adding it all up, you’ll find that you have a fair amount of exposure for loss in event of a fire.

And fire isn’t the only concern. A homeowner’s policy also covers theft and burglary. If your laptop computer were stolen from your car, it would not be covered by auto insurance—you’d need homeowner’s insurance. Homeowner’s insurance extends beyond the borders of the home you’re renting.

Be aware that not all insurance is created equal. Although it will be a little more expensive, I highly recommend choosing a policy that covers the replacement cost as opposed to the cash value of your current possessions. Why? Let’s say you spent $60 on a dress shirt or blouse a couple of years ago, and it’s still in great shape. The cash value for that shirt is about $2.00 (the amount someone would pay at a garage sale or thrift shop). The replacement value is closer to your original investment of $60.

Homeowner’s insurance can also include liability coverage, which protects you if someone is injured because of an act by you or your dependents. If your dog bites the mailman or your kid punches the school bully in the face, homeowner’s insurance can cover the cost of medical bills. As you research which policy to choose, be sure liability coverage is included.

Sometimes renters mistakenly believe that their landlord’s insurance will cover all expenses. This is not the case. If the renter is at fault, the renter is responsible for certain expenses. At one of the properties we manage, a tenant caused a fire by walking away while something was cooking on the stove. The fire didn’t spread, but it produced so much smoke that the apartment was uninhabitable for a period of time.

Because the fire was the tenant’s fault, the landlord’s policy didn’t cover cost of temporary housing for the tenant while the landlord repainted the interior and replaced smoke-damaged carpet and curtains. The tenant not only had to pay for personal housing expenses, but also for repairs and rent on the damaged apartment until it was ready for them to move back in and finish their lease. The tenant’s actions made the apartment unrentable, so they were on the hook financially.

You can see why it’s worth investing in a solid homeowner’s policy. It would have covered the cost of the temporary housing and hopefully the cost to renovate the unit, not to mention the replacement of possessions ruined by the fire and smoke.

Although you may be hearing stories about the skyrocketing cost of homeowner’s insurance, renter’s insurance hasn’t gone up by as much. The major risk for insurance companies is the repair and replacement of buildings, not their contents or liability coverage. Generally speaking, you can get a homeowner’s (renter’s) policy for a single-family home for less than $400 per year (that’s less than $35 per month!).

To figure out how much insurance coverage you need, inventory your belongings and estimate their replacement cost. (You can get inspiration from bloggers who have done this like belairdirect.com/blog/calculate-the-value-of-your-wardrobe-for-home-insurance-purposes-its-easy.)

Renters insurance protects you from property damage and provides loss-of-use coverage.

If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.