When you buy your first home, you definitely will want to get homeowners insurance—but what about renters insurance? Is renters insurance worth it? Renters insurance is designed to protect people who rent their apartments, but since the property is not yours, what is there to protect? Here’s some information to help you determine whether renters insurance is something you really need.

What You Get From Renters Insurance

Renters insurance does not insure the physical domicile in which you live. That’s covered by the landlord’s insurance, since, as you realize, you don’t own the physical structure and are not responsible for things like fires or vandalism that are not a result of your own negligence. However, what you may not realize is that the property inside your apartment, that is to say, your belongings, is not covered by the landlord’s insurance. If your apartment burns, anything you had inside it will be a loss. Similarly, if your goods are stolen or damaged by flood waters, your landlord is not obligated to offer you any compensation.

Renters insurance covers the value of your possessions in case of smoke or fire, theft or vandalism, lightning, explosion or wind damage. As with most homeowners’ insurance policies, floods and earthquakes are not covered, so if you want protection from those eventualities, you will need to add a special rider to your policy or purchase separate insurance. Renters insurance also covers liability if someone is injured in your apartment as a direct result of your negligence, which can be handy if you tend to host a lot of parties. Renters insurance can also cover living expenses if damage to your apartment renders it temporarily unlivable.

As with homeowners insurance, you can opt for an actual cash value policy, which reimburses you for the estimated current cash value of your possessions, or a replacement cost policy, which pays for the total cost to buy new items to replace the ones that were lost. Naturally, the replacement cost policy is more expensive. You can also buy a “floater” to your policy to cover special items like rare gems whose value would exceed the reimbursement value of the policy.

Is Renters Insurance Worth Getting?

The fact is that a renters insurance policy is relatively inexpensive, especially compared with the cost of homeowners insurance. To decide whether or not it is worth it you’ll need to consider a few things. First you’ll want to assess the value of the items in your apartment. Remember, we’re not talking sentimental value—if these items are destroyed, nothing will replace them in your heart. We’re talking about hard cash value items like furniture, electronics, appliances, etc.

Weigh the value of these belongings against the likelihood of them being destroyed through some unforeseeable circumstance in the next five years. Where you live geographically and your specific living situation can impact the likelihood of an accident or disaster striking. For example, if you have precocious children, live in a hurricane belt or rent a property above a restaurant, your risk for incidents may be higher.

Ultimately, you need to compare the value of your possessions and likelihood of a disaster to the cost of your renters insurance premiums over the time period of the insurance policy. If the numbers favor insurance, you can feel good about buying a policy. If your items aren’t worth that much and the chance of disaster is slim, you might opt to save your money.