(Photo courtesy of iStockPhoto/Think you don’t need renters insurance? Think again.)

by Beth Luberecki (for Express)

It took a fire in a nearby apartment building to convince Cecilia Garza that she needed renters insurance.

“I realized that I could lose everything,” she says.

That was about seven years ago, and she’s had a policy ever since. Last April, she was glad she did when another fire, this one in a neighboring unit, caused soot and smoke damage in her Gaithersburg, Md., apartment.

“It destroyed pretty much everything that had fabric — couches, curtains, clothes,” says Garza, 31, who now works in customer service at Allstate’s Silver Spring office. “All of the carpeting had to be replaced.”

Thanks to Garza’s renters insurance, she was covered and got a check in a few weeks to replace her damaged items. For Garza, an upfront investment of less than $200 a year in a renters insurance policy really paid off when she needed it.

As with any type of insurance, you could pay for renters insurance year after year and never need it. While some renters see it as a waste of money, those who end up needing it say they are grateful they had it.

According to a May survey by the New York–based Insurance Information Institute, only 31 percent of U.S. renters buy renters insurance.

“A lot of consumers are under the misconception that their landlord’s policy will provide coverage for them, and that’s not the case,” says Loretta Worters, the institute’s vice president of communications.

Your landlord’s insurance takes care of any structural damage to your apartment as the result of a fire or even some wild weather. It won’t, however, pay to replace your killer shoe collection or massive media center. That’s where a renters insurance policy comes in.

Renters insurance doesn’t just take care of your stuff. It protects tenants from a few kinds of liability. For example, if someone trips and falls in your apartment, leading to expensive medical bills or even a lawsuit, your policy would provide you with coverage.

It could also be a financial lifesaver. “Say you left the stove on and caused a fire,” says Raynold Mensah, an agent with State Farm in Bethesda (301-656-2600, Raymensahinsurance.com). “Any damage caused to the building would be your responsibility.”

Renters insurance also helps you pay for a place to stay if you are displaced from your apartment by something like a hurricane or major repair — up to a point. Some policies place time limits on how long they’ll cover expenses of staying in a new place, such as six months or a year, while others put a cap on how much they’ll shell out.

How much should you expect to pay? A basic renters insurance policy — with $10,000 in personal property coverage and $100,000 in liability coverage — costs about $120 a year through Allstate and State Farm. But even if you bump up both of those coverage levels, renters insurance should still run you less than $200 annually.

Certain amenities or apartment features can help bring that price down. Think of it this way: If it’s something that helps protect you or your stuff, make sure to let your insurance agent know about it.

“Any type of safety feature — a security alarm, sprinkler system, front desk in your building—can decrease the cost,” says Adria Brown, an agent with Allstate in Arlington (703- 558-8200).

So how do you go about choosing a policy? You can get renters insurance from almost any insurance provider. If you already have car insurance, start your shopping there, since companies often offer bundling discounts.

You’ll want to take a good look at what you actually own. Both Allstate and State Farm, for example, offer online tools to help renters assess the value of their possessions. That figure determines the amount of personal-property coverage they need.

A fresh-out-of-college renter with a lot of hand-me-down furniture might be fine with a policy that covers just $10,000 worth of stuff, but someone who frequents Pottery Barn and Banana Republic could need as much as $30,000.

Big-ticket items, such as an expensive engagement ring, require a supplemental piece of insurance called a floater, since their individual value is too high to fall under the standard renters policy.

So who doesn’t need renters insurance? Anyone living in a college dormitory, hotel or executive housing. Temporary living situations can’t be covered by renters insurance.

Like many other kinds of insurance, a renters insurance policy has a deductible, which is the amount of money the insured party must pay before their insurance coverage kicks in. So if your deductible is $250 and you’ve suffered damage to $1,000 worth of your belongings, expect a check for $750.

Some landlords — but not all — require tenants to obtain a renters insurance policy. And some take things a step further by not only requiring that tenants obtain renters insurance but also asking to be listed as an interested party on the policy. Don’t be scared off by that. They typically just want to know if the policy gets canceled and to make sure they understand how the claims process works.

Whether your landlord mandates renters insurance or not, it’s a good idea to evaluate your possess-ions and think about what it would cost you to replace them.

“Things have changed; people own more expensive things now,” Brown says. “And for less than the cost of a pizza a month, a renters insurance policy will protect you.”