Having renter's insurance is like having a parachute.If it's not there when needed, chances are its absence will be felt.

Simply put, renter's insurance protects one from the risk of losing property.

"Renter's insurance gives you peace of mind," explained Grant Echols, a licensed account manager with the Allstate Insurance Company in Lakewood. "It protects your possessions."

It is those possessions that make an apartment or rental home livable.  If something happens to them, it can cost a lot to replace them all at once.

For an average monthly premium of just $16, renters can protect their possessions.

"As a whole, renters can expect to pay about fifty cents per day for an insurance policy," added Tim LaCasse, a State Farm Insurance agent.

Here is what a parachute looks like.

Personal Property Coverage

This coverage may help cover the cost of replacing possessions should they be lost or damaged by fire, lightning, falling objects, smoke, explosion, wind and hail, water damage from plumbing, steam or water heating systems or vandalism.

"Most people usually only think of the big-ticket items, like electronics, but if you really think about it, it's so much more than that," said Keith Rutman, vice president of specialty property lines for Allstate Insurance. "For example, in your kitchen, it's not only the appliances, but the towels, dishes, utensils and food, too. The average renter in a two-bedroom apartment has about $30,000 worth of stuff."

That's a lot to lose.

Renters should know that they set limits that are appropriate to their situations.

Creating a home inventory helps in assessing the value of possessions and helps in determining how much coverage is needed.

There are generally two kinds of personal property coverage.

A policy that provides actual cash value protection usually covers belongings up to their current market value while taking depreciation into account.

On the other hand, a policy that includes replacement cost coverage may help pay to replace items at current retail prices.

"Replacement cost policies come with slightly higher premiums, but the extra few dollars a month can really be worth it," said Robert Hunter, director of insurance for the Consumer Federation of America.

Theft

Renters' personal property can be protected from theft in or away from the home, stolen or forged checks, and stolen credit cards.

Liability Coverage

This form of protection is typically offered in a renter's insurance policy.

This coverage may protect renters from paying out-of-pocket costs if they are found legally responsible for injuries to other people or damage to their property.

"For approximately the cost of a delivered pizza dinner every month, renter's insurance can save you from legal or medical expenses associated with an accident in your home," wrote Sienna Kossman, a contributor to U.S. News & World Report.

Additional Living Expenses

This portion of a renter's insurance policy can help by reimbursing the insured for reasonable increases in living costs when a loss makes a residence uninhabitable.  This may include payments for the cost of a hotel, food and other expenses.

Insurance experts like Kossman, Hunter, Echols and LaCasse underline two key facts to remember.

One, while the landlord's insurance may offer liability protection for the policyholder (the landlord), that protection usually does not extend to the tenant.

And two, read and know your insurance policy.  Know what the policy covers and whether that coverage is the actual cash value or the total cost of replacement.

"Talk to an advisor and find out what works for you," said Echols. "The customer determines the policy; we only advise."

Sounds like a good parachute to have.