If you’re a renter, one of the smartest things you can do is buy renters insurance. For the price of about two lattes a month, you get the peace of mind that comes with knowing you’re protected if disaster strikes.

Before you buy renters insurance, though, there are a few things you should consider.

Figure Out What Your Possessions Are Worth

When you’re buying renters insurance, you want to buy enough coverage to replace your belongings if they are damaged or lost due to theft, a natural disaster or an accident. You don’t want to pay for more coverage than you’ll actually need, so your first step should be figuring out what all your possessions are worth.

The best way to do this is to go through each of your belongings one-by-one and make a note of when you bought it, how much you paid for it and what you believe it is worth today. While this will take a bit of time, the end result will be worth it. Plus, once you’ve gotten the list completed, you’ll easily be able to update it in the future.

Understand The Different Coverage Plans

Once you know the value of your possessions, you’ll want to decide what type of coverage you want to get. If you select an Actual Cash Value policy, the insurance company will pay you the price of your possessions based on their age and the amount of wear and tear they’ve received. You won’t get as much money if you have to file a claim, but your premiums will be lower.

If you select a Replacement Value policy, on the other hand, you will have to pay higher premiums. However, if you have to file a claim the insurance company won’t take age and use into account, and simply pay you the cost of having to buy a similar item at the current market value. If you have expensive items in your home, you might want to consider this option.

Know What Deductible You Want

When you buy insurance, you have to figure out how much of a deductible you want. This is the amount you have to pay before your insurance policy kicks in.

While you might be tempted to buy a policy with a lower deductible, just remember that lower deductible policies have higher premium payments, so you might want to opt for a higher deductible and use the amount you would have paid in higher premiums to fund your emergency account instead.

Bundle Renter Insurance With Other Policies

If you already have an insurance policy, such as auto insurance, you might want to contact your insurance agent to see if they can bundle your renters insurance with your auto insurance. Many insurance companies will give you a discount if you have more than one policy with them, usually between 10—20%.

Know What Your Renter’s Insurance Doesn’t Cover

While renters insurance covers a lot of emergencies, there may be certain disasters your insurance policy will not cover. Some policies exclude floods from their coverage, for instance, while other policies might exclude damage due to earthquakes.

When you’re looking for renters insurance, ask your insurance agent what types of damage are and are not covered on your policy. If there’s a type of damage you want covered, find out if there’s a policy that can cover it.

Protect Your Belongings With First Alliance Credit Union

Buying renters insurance is a smart financial move, but you’ll want to keep a few things in mind when you’re shopping for a policy. Make sure you know the value of your items first and foremost, then select a plan that will give you the coverage you need at a price you can afford.

If you become a member of First Alliance Credit Union, you can take advantage of the deals offered by our partners at TruStage insurance. TruStage offers insurance plans that are designed to be straightforward and affordable, and they have special discounts for all First Alliance Credit Union members.