If you are a renter, make sure you have a current renter's insurance policy.  These policies are very cheap and very important.

My brother just moved to Virginia and found a beautiful townhome there to rent.  He and his family are unpacking, hanging their artwork, arranging the furniture, and really enjoying their new place.  The agent they used in Virginia insisted that they get a renter's insurance policy before moving in.  Part of the policy is liability, in case you fall down the steps and might want to sue the landlord, your policy will be the first one to cover any injuries. 

Many landlords require a $300,000 liability policy.  I had a client recently whose insurance would not go that far, but we called a friend of ours who is an Allstate agent and he got her the insurance within minutes, liability and personal property for only $118 for the whole year!

Back to my brother's story.  So he got his renters insurance policy which covers the liability as well as his personal property.  Less than 2 weeks after moving in, he came home to water gushing out of pipes in his basement ceiling!!!  Several inches of water were on the floor, seeping into the drywall and his plasma TV was dripping water.  His XBOX 360 was waterlogged among many other personal belongings in this finished basement.  What a nightmare!

First thing he did was very smart - he TOOK PICTURES!    This was important as in a short period of time, everything was dried out on the outside and you couldn't tell how much water was in the basement.  His photos were a diary from that day and helped make his insurance claim smooth and quick.  Within a week, he received a check for $7,000 to replace all of the things that were destroyed. 

The landlord also received insurance money to fix the drywall and replace the carpet in the basement.  The plumber that came over told her that it wasn't a question of if these pipes would burst again but when!  The problem is the polybutylene pipes that were in the house.  These are the plastic type pipes that were popular for a time but have been the subject of many lawsuits since and are no longer used.  My brother talked with the neighbor whose pipes have burst 8 times over the years!!!  The landlord decided to spend several thousand dollars and replaced all of the pipes with copper so that this wouldn't happen again. 

Not every home has this crummy piping, but you never know what could happen and $118 investment per year is nothing compared to having piece of mind that you'll be reimbursed for any damage that might happen due to unforseen circumstances!