Will a roommate's renters insurance policy cover my possessions, too?

State regulations vary over whether roommates can purchase a single renters insurance policy together, and policies vary from one company to the next.

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Check to see what the rules are in your state, and contact your roommate's insurance company to see if you can be listed on the policy.

If not, get insurance quotes for your own renters insurance policy. The protection is well worth the price, which averages less than $15 a month, according to the Insurance Information Institute.

Renters insurance provides three types of protection in one policy:

• Insurance coverage for your belongings
• Liability coverage in case someone sues you
• Additional living expenses coverage, which pays extra costs you would incur if a disaster forced you to live elsewhere while your apartment was undergoing repair.

Renters insurance coverage options

When purchasing renters insurance, it's important to understand the difference between actual cash value coverage for belongings and replacement cost coverage. With actual cash value coverage, the insurer reimburses you for the cost of an item, minus depreciation. If you have replacement cost coverage, the insurer pays the cost for purchasing a brand new item.

The premium for replacement cost coverage is about 10 percent more than for actual cash value coverage, according to the Insurance Information Institute. But when it comes time to make a claim, you may be glad you paid the extra price.

To determine how much renters insurance coverage to purchase, complete an inventory of all your possessions. The Insurance Information Institute provides free online software at KnowYourStuff.org to guide you through the process.