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5/18/2001

For the Wired, Renter's Insurance Is Worth a Look

Kate Traynor

Imagine: You’re synchronizing your handheld computer to your new desktop system while cooking popcorn in the microwave and listening to music playing on your state-of-the-art stereo system. Suddenly, everything shuts down, courtesy of a power surge that fries every electronic gadget in your apartment.

If you had purchased a renter’s insurance policy, your re-entry into the wired world would be relatively painless and cheap. But without insurance coverage, the cost of replacing your electronic possessions is yours alone to pay.

Depending on where you live and your level of coverage, a renter’s insurance policy probably costs between $150 and $300 a year and may come with a deductible. Obtaining coverage for unusually expensive items will cost more than purchasing a basic policy but may be worth the money. And a policy that completely covers the expense of replacing your damaged belongings will cost more than insurance that reimburses you for just the depreciated value of your possessions.

In addition to protecting your electronic devices from power surges, a renter’s insurance policy typically covers losses from fire, theft, and other events that the industry calls "perils." Although renter’s insurance often covers losses caused by water damage from burst pipes in the home, flood protection is usually exempted—or provided at an extra cost.

What happens if your entertainment center collapses, depositing the television onto a visitor’s foot and breaking it? Relax—your renter’s insurance policy most likely provides liability protection that will cover your friend’s emergency-department visit and up to $100,000 for any lawsuit arising from the accident.

To learn more about renter’s insurance, contact an insurance agent. If you have a car, start with the company that provides your automobile insurance; you may be eligible for a discount if you obtain renter’s insurance from a company with which you already do business.