Ask yourself this: If all your clothes, the appliances you own, your TV, stereo, jewelry, computer and that collection of Batman Detective comics were destroyed in a fire, could you replace them, immediately, out of pocket? If you said no, you need renters insurance.

You may be surprised to learn that renters insurance is not that expensive. The only thing you're insuring is the contents of your apartment, so your premiums can be as little as $20 a month. You can lower that cost even further by getting a policy with roommates, increasing your deductible or having multiple policies with the same carrier (renters and auto insurance, for example). It's certainly cheaper than replacing all your possessions after a disaster.

Renters insurance provides the security of knowing that if you lost everything today, you wouldn't be forced to start from scratch. Renters insurance can even cover you for personal possessions that don't happen to be in the apartment at the time of the loss. If that friendly tour guide in Milan happens to find his way back to your hotel and makes off with a suitcase full of your stuff, you don't have to just suffer the loss.

Of course, you can always count on part of your landlord's policy, right? Well, not quite. Many renters are under the impression that their landlord's policy covers their belongings as well. Unfortunately that's not the case, and they often don't find that out until the worst possible time, after a disaster or a robbery. Your landlord's policy doesn't cover anything that's yours. The only exception to this would be if the loss was caused by negligence on the part of your landlord, and then you would still have to prove it in court.