Your personal possessions – Your insurance company will pay to replace your personal possessions (furniture, appliances, electronics, clothing, etc.) when they’ve been damaged by vandalism, fire, plumbing leaks, lightning, frozen pipes, or acts of nature. Some policies limit the amount of coverage, so if you have expensive items like jewelry, antiques, or high-dollar TVs or computers, you may want to increase your coverage.

Personal liability – If someone hurts himself on your property and sues you, this coverage pays for court-awarded damages plus your court costs and legal fees. Standard coverage pays up to $100,000, but if you have a lot of assets you can purchase additional insurance.

Additional living expenses – When your home is damaged and you need temporary living quarters, renters insurance pays for your motel and restaurant bills. So if you have a $50,000 policy and 20% additional living expense coverage, your insurer will pay you up to $10,000 to live and eat elsewhere while your home is being repaired.