I stopped most of my junk mail and catalogs several months ago. If you did the same, then you’ve probably seen a significant drop in your junk mail. Some days we don’t get any mail, and my husband hasn’t even registered yet! This week I took the bold step of stopping the last of the junk mail I receive: credit card offers from my own banks.

Why I Stopped the Offers
Once my junk mail stopped, I realized just how many offers I received from own banks and credit card issuers every week. It was simply ridiculous, and frankly, I was tired of buying new shredders every couple of years. These offers are also a prime source of identity theft. Thieves steal them right out of your mailbox and change the address so you don’t know about the card until it shows up on your credit report.

Last Friday I received not one, but two sets of convenience checks and an offer for a personal loan. That was it. I didn’t want any of more this junk in my mailbox. So, I girded my loins in preparation for battle with my current credit card issuers.

Six Steps to Stop Credit Card Offers
It turned out the girding was completely unnecessary. The people I spoke to were very pleasant and didn’t argue with me at all. If you want to stop your credit card offers, here’s all you have to do:

1. Register with the DMA to stop your junk mail.

2. Take your credit cards out of your wallet (or wherever else you keep them.)

3. From a landline phone, call the toll-free number on the back of the first card.

4. Push the buttons to get to customer service.

5. Tell them you want to opt out of convenience checks and all other offers they send you.

6. Repeat with the next credit card.

One of the reps reviewed her entire checklist with me on the phone and opted me out of emails and phone calls, too. Each one did offer me a new card or a balance transfer, but accepted my “no” right away.

They also said it would take about seven days to get me off all their mailing lists, which is pretty darn quick. It’s been a week now and I’ve only received one offer in the last seven days.

Unfortunately, you do have to call to make the request. None of the websites offered the ability to set my mail preferences for offers.

I had three cards to call, so the process took me about ten minutes. You don’t usually have to worry about store cards. I didn’t call American Express because I don’t recall receiving offers from them. I may have to call the airlines where I have frequent flyer accounts, but I’m not sure yet. I’ll let you know if I end up calling them.

I can’t tell you how nice it is to open an empty mailbox these days! It feels a lot like freedom.

We’re back in full carnival swing this week! We have three carnivals to review.

We’ll kick things off with the Carnival of Personal Finance #152, hosted by Money Under 30. This one included my post on car insurance. If you liked that bit of car advice, you might as like $aving to Invest’s post on preparing for $5 gas. Yikes.

Next up, the Festival of Frugality #125, hosted by Quest for Four Pillars. This one included my post on renter’s insurance. If you can’t find the money for the insurance, try Personal Money Tips 10 ways to save money.

Finally, the Money Hacks Carnival #12, hosted by Can I Get Rich on a Salary. If you liked my tips on selling or donating your clutter, you’ll also enjoy Free Money Finance’s tips for saving money by stockpiling. When the pantry’s full, it’s time to start donating!

It’s All Too Much Cover

Peter Walsh is the organization expert on TLC’s Clean Sweep and Oprah. Rather than writing another book that lists various organizational methods for different types of stuff, It’s All Too Much: An Easy Plan for Living a Rich Life gets into the psychology of stuff so you can part with it permanently, and then teaches you how to do it.

Clutter Problem: The Psychology of Stuff
If you’ve seen Peter Walsh on TV, then you know that he’s very concerned with the reasons we create clutter. Getting rid of it once is easy, but learning to part with it permanently is hard. His basic theory is that we create clutter because it either represents something we value, or represents our idea of who we are. As you read through the first section, he challenges the excuses you’re already making in your head. He helps you see the error of your ways through quizzes and the stories of other clients facing serious clutter problems.

For example, Walsh relates the story of the woman who wanted to create scrapbooks for her three children, but she had so much scrapbooking stuff that it was overwhelming. Rather than make the books, she avoided that area of the room. At the same time, she couldn’t part with the stuff because she needed it to make the scrapbooks. He helped her see how she was blocking herself from being who she truly was, but he also didn’t make her throw it all out. Instead he honored her desire to make the scrapbooks by placing limits on the amount of supplies she could have and creating an organized space in which to work.

Putting Clutter in Its Place
The next section focuses on learning to control the clutter. Walsh first asks if the stuff belongs to you. Many people have clutter that belongs to friends, neighbors, ex-spouses, or middle-aged children!

Next he asks you to find the true purpose of each room. To do this, you and your family members write down how you think each room should be used. If one of you wants to use the dining room to eat and the other wants to use it to make model airplanes, that’s a pretty big conflict of desires that’s creating clutter. Once you understand the true purpose of a room, it’s easier to clear the clutter.

If a room must have multiple uses, then Walsh recommends creating zones for each use, and limiting the activity storage to that space. He doesn’t say you shouldn’t buy storage boxes; he says you should reduce the stuff, and then buy boxes to fit the remainder and prevent it from outgrowing the boxes.

The Clutter Weekend
Walsh tells you how to recreate the Clean Sweep experience by designating a weekend to clear out the clutter and then get rid of it immediately via a garage sale or donation. Once the major work is done, you can slowly remove the rest of the clutter bit-by-bit.

Room-by-Room Clutter Clearing
Finally, Walsh gives a review of each room. He explains how clutter develops in each room and then provides strategies for discovering what you really need to keep and what you should part with.

The book is part inspirational, part hands-on advice. Walsh never makes you feel guilty about the clutter, but he does make you want to get rid of it. I read this book after cleaning out our office closet, and well after my clutter purge, but the book helped me realize the effect that had on me. Now that there’s less stuff in there, I don’t want to just toss stuff into it anymore. I always take a few more steps to put it back in its place. I also think carefully before adding new stuff to it.

Final Thoughts
This isn’t the book for you if you simply want another organization system. If you’re ready to truly tackle not only the clutter, but the psychology that causes you to create clutter, then this is an excellent start.

I’ve seen many personal finance blogs and books rail against the evils of credit cards. Dave Ramsey, for example, has a very negative view of credit cards. I’ve always been in the “credit cards are good” camp, if you use them wisely. However, there’s a very good reason NOT to pay cash for big-ticket electronics: purchase protection. My friend used his credit card to buy a new Apple laptop and is very thankful he did.

His Purchase Protection Story
One morning about a month after buying the laptop, he pulled it out of the case and turned it on. Rather than the flawless screen he was expecting, there was a giant splotch at the top of the screen. It looked a lot like an inkblot. The rest of the screen still worked and there was no damage to the outside, but that part of the screen was unusable.

He took it to Apple, which refused to cover the repair under the warranty. They insisted it was damage, not a defect. They advised him to call his credit card company.

So he did. He got a repair estimate and filed a claim with Mastercard under their Purchase Assurance plan. Two weeks later he got a check to cover the repair. The repair cost was half the price of the laptop! Unfortunately, the estimate didn’t include tax, so he’s filed a second claim for the $50 in tax.

How Credit Card Purchase Protection Works
The exact protection you receive varies by issuer. Check your issuer’s website for limits, but usually purchase protection and purchase assurance cover up to $1,000 for fire, theft, or damage within the first 90 days. Some will also cover it if you simply lose the item. If you use a business credit card, coverage limits are typically higher.

In addition to covering fire, theft, or damage for 90 days, many cards also double your warranty.

To file a claim, you’ll need a receipt for the original purchase. If the item was stolen, you’ll probably need a loss report or police report. If you need a repair, you’ll also need to include a repair estimate. Contact your card issuer for instructions on filing a claim.

Once your claim is approved, you’ll receive a check in the mail for the amount covered.

Most Mastercards include coverage. Visa offers Purchase Security coverage, but only on certain cards. American Express coverage is equivalent to Mastercard protection on most cards, and some cards offer even greater protection.

What Should You Buy with a Credit Card?
If you’re planning to buy high-end electronics or small electronics that are easily lost or stolen, I would recommend buying it with a credit card. This is especially true of anything with a plasma or LCD screen, which are notoriously expensive to fix. When you use a card that offers an extended warranty benefit, you can skip the overpriced warranty offered by the store a.

Here are some items I would buy with a credit card to because of purchase protection and extended warranty coverage:

  • Video camera
  • Digital camera
  • MP3 player
  • Cell phone
  • Laptop
  • Desktop computer
  • LCD monitor
  • LCD TV
  • Plasma TV
  • Projection TV

Obviously, it’s best to use a card you pay off every month. If you add the purchase to one that already has a balance, you could end up paying more in interest than you receive in benefits.

If you’re planning on a big-ticket electronics purchase, review the protection plans offered by your cards. Choose the best coverage on the card without a balance so you can also buy piece of mind when you make your purchase.

Now that you know more about the shelf life of makeup, you may be regretting that $20 lipstick that came with a free gift. Odds are good that the lipstick is barely used and the free gift is just more clutter. Next time you hit the makeup, remember these suggestions about whether you should save or spend on makeup products.

Blush: Spend. Not only will you find a wider range of colors, but more expensive blushes blend better. More expensive brands also tend to be longer lasting.

Bronzer: Spend. The same rules apply – better range of colors and easier blending.

Brushes: Spend and save. You can save on some brushes, like lip brushes that gunk up quickly, but you should spend a little more for well-made synthetic powder, blush, and shadow brushes that are easy to wash and won’t leave bristles on your face.

Cleansers: Save. All cleansers are the same. Many dermatologists recommend Cetaphil because it’s cheap and gentle.

Concealer: Spend. Major brands have a wider range of colors, last longer, and are easier to blend.

Eye Liner: Go cheap. Not only do they wear out quickly, they’re often trendy colors that will look dated in a year.

Eye Shadow: Go cheap for trendy colors. This year’s “must-have” shade is next year’s “are you kidding me” color. For traditional colors you’ll wear more often, be willing to spend more for richer, longer-lasting color. Avoid those multi-shade palettes, though. At least one of them will look dreadful on you. Instead, buy single pots of color.

Foundation: Spend. Foundation should match your skin tone exactly, so you’ll have more options if you’re willing to spend more. Pricey brands also tend to have smoother coverage and last longer.

Hair Products: Save. Shamphoo and conditioner are generally the same no matter who makes them, so feel free to buy major drugstore brands rather than an expensive bottle from your stylist.

Lip Gloss: Go cheap here, too. They also tend to be trendy colors and are used up quickly. Most lip glosses are the same no matter whose name is on the label, so choose the color you want from the drugstore brands.

Lipstick: Save and spend. Go cheap for trendy colors that will only be hot this season. If you like to wear one classic color all the time, you might want to spend more for a richer lipstick that will last longer without drying out your lips.

Mascara: Save. Makeup artists go crazy for Maybelline Great Lash. It’s usually less than $7, and a tube lasts about three months.

Moisturizer: Save. I’ll be honest, I splurge on Kiehl’s moisturizer because it’s so light on my skin, but I could probably find a good drugstore brand, too. Like cleansers, most moisturizers are the same.

Nail Polish: Save. Not only are they trendy colors, but cheap nail polish is just as good as pricey polish. Sally Hansen is often considered the best.

Pressed Powder: Spend. Cheap powders aren’t as smooth and don’t last as long on your face.

If you have very sensitive skin or allergies, then you need to be more careful, but the average woman can easily save a fortune on makeup by opting for cheaper versions when possible. Just remember this rule – the shorter the shelf life or the trendier the color, the less you should spend.

A few years ago I was watching Clean Sweep when I made a horrifying discovery: makeup lasts a maximum of three years. Most products don’t last nearly as long as that. Shortly after that, I started to clean out my makeup case. Some of my products had been there for more than ten years.

Here’s a quick review of the shelf lives of various products. Remember this next time you shop – unless you can use it up within the allotted time you’re better off opting for a cheaper drugstore version. That way you won’t waste as much money when you have to throw it away with half left in the container.

Makeup Shelf Life Times
The following list reviews major product categories with shelf life times and info on how to find out how long it’s been in your makeup box.

Mascara: 3 Months
Mascara is an ideal environment for bacteria, which can easily be transferred to your eyes. Throw out your mascara every three months to avoid eye infections.

Liquid Eyeliner: 3 Months
Once again, liquid eyeliner is moist, which makes it prime territory for bacteria that can transfer to your eyes.

Moisturizer: 12 Months
Some of the essential oils or natural components break down quickly, so moisturizer that’s more than a year old may not be as effective.

Nail Polish: 12 Months
The chemicals start to break down after about a year, which could cause the color to change. You’ll also notice that the polish doesn’t hold together well or apply smoothly.

Oil-Free Foundation: 12 Months
These foundations tend to dry out faster than cream or powder foundations. The oils on your fingers can also introduce bacteria into the liquid. Use a sponge or brush to preserve it. Storing it in the fridge can also extend its life. When the color changes, it’s past its prime.

Concealer: 12-18 Months
Stick concealer lasts longer than liquid concealer, but both become lumpy after 12-18 months. Lumpy concealer won’t cover as well, and may contain bacteria from your blemishes. You may also notice color changes.

Cream Blush: 12-18 Months
Cream blush will dry out after about a year. It may also start to change color or not go on as smoothly.

Cream Eye Shadow: 12-18 Months
Like all other cream products, it dries out over time. It may also harbor bacteria. Never use it while you have an eye infection to avoid contamination. You should apply it with a clean brush to extend its life.

Cream Foundation: 18 Months
Cream foundation will dry out after about a year and a half. It may also start to change color or not go on as smoothly. If you apply it with your fingers, the oils on your skin could also introduce bacteria into it.

Lip Gloss: 18-24 Months
Lip gloss dries out fairly quickly because it’s thinner and contains less fat than lipstick. If it becomes clumpy, dry, or changes color, throw it out.

Blush and Bronzer: 2 years
Powders last longer, but the oils in your skin will alter the texture and make it more difficult to apply after a couple years. You may also notice changes in color.

Lipstick: 2 years
After two years, the fats in the lipstick will start to break down, which will make it dry, crumbly, and probably change the color. To make it last longer, apply it with a clean brush. Never use lipstick when you have a cold sore or share it with someone else.

Lip Liner: 2 years
Lip liner can last up to two years if you sharpen it regularly to prevent bacteria build-up and avoid using it when you have a cold sore.

Powder: 2 years
Powder tends to get clumpy after more than a couple years because it mixes with the oils in your skin over time. If you take excellent care of it, it can last up to three years.

Powder Eyeliner: 2 years
Powder eyeliner will last longer than cream or liquid liner because it doesn’t dry out, but you should always use a clean brush to avoid contaminating it with bacteria. If they’re in stick form, sharpening them regularly prevents bacteria growth. If the color changes or it becomes hard to apply, throw it out.

Powder Eye Shadow: 2 Years
Powder eye shadow lasts as long as powder eyeliner if you always use a clean brush and avoid using it while you have an eye infection.

Perfume: 3 Years
Cheaper perfumes and eau de toilettes may only last two years, but good perfumes should last up to three years. You can extend the life slightly by storing them in the fridge. If the color or scent changes, throw it out. If you’re not sure how old it is, check the stamp on the bottom. The number at the end is the year it was bottled, for example, a number ending in 6 means it was bottled in 2006.

If you’re not sure how old your makeup is, check the consistency. If in doubt, throw it out and start fresh. Mark the date on the label with a Sharpie so that you always know how old your makeup is.

Gas is officially over $4 at some L.A. gas stations. I’ve also noticed some stations holding the line at $3.99 for regular, while prices continue to shoot up for the two higher grades. My station hasn’t yet reached that point, but I can feel it coming. Since I can’t afford to buy a Prius just yet, here are my twelve tips to help you save money on gas.

Buy a Hybrid
If you’re in the market for a new car, consider a hybrid. Hybrids usually cost a few thousand more, but with gas prices continuing to rise, the increased cost may be balanced out by fuel savings in just a few years. According to Edmunds.com, the 2008 Prius costs .54 a mile over five years. That’s actually one or two cents higher than you’d get with a Corolla or a Mazda M3 (non-hybrids), but I’m betting that the Prius’ operating cost vs. the other two is lower once you get past that point, or if gas prices continue to rise at their current pace.

Buy a Stick Shift
If you can’t get a hybrid, consider a stick shift. Manual transmissions have historically used less fuel than automatics. In case you’re thinking that you could get both a hybrid and a stick shift, think again. Hybrid cars are almost exclusively sold with automatic transmissions because the technology eliminates any efficiency gains from a manual transmission.

Check GasBuddy.com
Gasbuddy.com is a cool little site that tells you the prices at several local stations. I used it to find the cheapest prices on my route to and from work. If you have to drive more than a mile or two out of your way, then the tool won’t save you much money.

Properly Inflate the Tires
It’s simple, it’s quick, and it’s something few people do. Inflate them to the pressure indicated by your auto manual not the pressure printed on the tire. When your tires are properly inflated, it reduces drag. Don’t overinflate them though; that reduces safety and control. Check your tires once a week before you leave in the morning and stop at the nearest station to fill the tires. If you have access to a home pump, use that.

Use the Lowest Octane Gas

Most newer cars are engineered to operate best on the lowest octane gas. Check the manual for more information. Performance cars and ultra-luxury cars may need higher grades, but if you’re driving one of those, then saving money probably isn’t a big concern for you.

Don’t Warm Up the Engine
Most newer cars don’t need to be warmed up for more than thirty seconds. Try not to be a speedster for the first few minutes, but you don’t have let it sit for five minutes. The exception is very cold weather, in which case you might need a few extra minutes to warm up.

Turn Off the Engine When Idling
By idling, I mean sitting in the driveway or parking lot waiting for someone. If you’re going to idle the car for more than thirty seconds to a minute, then keeping the car running wastes more gas than turning it off and restarting it. If you want to leave it on because it’s hot outside, get out of the car and go inside to wait.

Avoid Hard Acceleration/Hard Braking
In short, don’t drive like a NYC cab driver. Have you been in one of those? You’re practically pinned to the seat while they accelerate, and then thrown forward while they brake. All that wastes a lot of fuel. Instead, accelerate slowly and try to coast to a stop. Apply the brake lightly if you must. I’ve found that I can’t coast to a stop because my car holds the speed for too long, but I can accelerate slowly from a green light and catch up to the cars ahead just as the next light turns green.

Drive Slow
If you’re commuting, you have to do this anyway, but driving slower than 65 MPH will save fuel. Less than 40 MPH is ideal, but obviously you can’t do that if the rest of the traffic is going 70.

Use the AC Wisely

If you’re driving in city traffic, either open the windows or use the fan only. Use the AC as sparingly as possible. If driving at highway speeds, open windows actually produce more drag, so use the AC instead.

Avoid Driving
Avoid driving whenever possible. Many urban dwellers are switching from cars to busses or subways. That’s not really feasible for many people in Los Angeles, but people in other cities can do it. I also try to drive less on the weekend. At this point, I drive less than 8,000 miles a year.

Plan Trips Ahead
For example, I group most of my errands into one outing and plan my route for the simplest loop. My grocery loop is actually very inefficient, but necessary to save the most on groceries. Even then, I don’t drive more than four miles, total, and incorporate three stops. If I just need to pick up one thing, I walk.

It’s easy to save money on gas if you make simple modifications to your driving habits and consider your next car purchase carefully. You can also set aside more money for gas by reducing other car expenses. As much as I wish it weren’t true, I doubt gas prices are every going back down to what they were five years ago. That makes me and my budget sad, but hopefully it will spur us all to make the planet happier.

This week I was only in one carnival, with a friendly link from another. BlogCarnival.com was down on Friday, and I forgot to submit the rest of the weekend! I was planning to submit to four, so boy am I mad at myself.

What does that all mean? We have a briefer carnival round-up this week.

I was able to submit to the Carnival of Personal Finance #151, hosted by Alpha Consumer and U.S. News. In addition to my post about zombie debt, you might also enjoy the Baglady’s exploration of the nuances of good and bad debt. I think we can all agree that zombie debt would be the worst kind.

The Festival of Frugality #124 linked back to me as last week’s host. Thanks Frugal for Life! If you enjoyed my tips about air conditioning, Be Thrifty Like Us has additional tips, which she learned from her HVAC repairman, aka her dad.

And that concludes our round-up. Check in next week when I have more carnivals to cover!

If you don’t have health insurance through your employer, or your spouse’s employer, you can either buy an individual health insurance plan, a family plan, or a group plan through a trade group or credit union to which you belong. The costs will be higher, but the cost of not having insurance is much higher. More than 50% of all bankruptcies are caused by medical bills.

This basic overview of your options and methods for saving money on insurance can help you wade through the process of buying private health insurance. If you don’t want to compare quotes manually, a site like NetQuote can help you get several quotes for health insurance.

Types of Individual Health Insurance Plans
Group plans, usually through an employer, offer the best coverage at the lowest cost because you can’t be rejected due to pre-existing conditions. Individual health insurance coverage isn’t as extensive, but you can find a plan to suit your needs and your budget. Plans come in four primary types:

Indemnity coverage is best for young, healthy people. Most indemnity plans have a very high deductible. You also often have to pay the total cost up front and then file a claim for reimbursement. This option has two benefits: low annual premiums and complete flexibility to see any doctor, any time.

Preferred Provider Organization (PPO)
A PPO controls costs by limiting coverage to in-network doctors and hospitals. When you opt for a PPO plan, you don’t have to choose a Primary Care Physician (PCP), and can see an in-network doctor without a referral. Most plans include a deductible, which you have to pay before your coverage kicks-in. You’ll pay a co-pay when you visit the doctor, but the doctor then bills your insurance. In most cases, preventative care visits are covered, but you’ll have to pay the negotiated rate for tests until the deductible is met. Some also require co-insurance after the deductible is met, which means that you pay a set percentage of the total cost, often 30%.

Health Maintenance Organization (HMO)
An HMO offers a limited number of doctors and hospitals that you can choose from. You’re also required to choose a PCP. If you need to see a specialist, your PCP must provide a referral. You may have a small co-pay, but there’s no deductible to meet. Most have no or very limited out-of-network coverage. Premiums are usually lower than those of a comparable PPO because of the limits.

Point of Service (POS)
POS coverage combines an HMO and a PPO. You choose a PCP, but pay no deductible for care provided by the PCP. Most plans require referrals if you need to see specialists. They may also provide limited out-of-network coverage.

How to Choose an Individual Health Insurance Plan
When choosing a family or individual health insurance plan, first review the coverage offered by different plans from a few different companies. You should also check with the state insurance commissioner’s website to see how each plan rates in your area. None of the reviews will be great, but some are better than others.

Note: if you have a pre-existing condition, you will probably be charged a higher rate, regardless of how minor it is. My husband had a hospitalization as a result of a car accident and one insurance company offered a ridiculously high rate because it had been within the past year, never mind that he wasn’t at fault and didn’t plan to repeat the injury.

You should also compare the various deductibles. Most have a medical deductible and a prescription deductible. If you add dental coverage, expect to find a third deductible. If all you need are semi-annual cleanings, skip the insurance. The premium costs more than paying the dentist directly.

When my husband and I got married, we didn’t have employer-provided coverage. We combined our individual health insurance plans into a family plan, and opted for a PPO with a $2500 deductible because the premium was $100 a month less than the plan with a $1500 deductible. Paying an extra $1,200 to save a possible $1,000 didn’t make sense to us.

If you can, deposit the premium difference between the lower deductible plan and the plan you choose into a savings account. That way you’ll have the money to cover the deductible if you need it, but the money is yours to keep if you don’t need it.

How to Apply for Individual Health Insurance
Most applications can now be completed online. Although it’s tempting to leave out some conditions, past surgeries, or other factors that might increase your rate, don’t do it. If you intentionally exclude information, your insurance could be cancelled just when you need it most. In addition, they will probably find out anyway, so lying only makes you more likely to be declined.

You usually have to submit the first payment with the application, and the money will be refunded if you’re declined.

When to Apply for Individual Health Insurance
You should apply for insurance the moment you discover you will soon be without it. If you’re leaving your job and your new job has a waiting period before your coverage is active, see if you can buy COBRA coverage for the gap.

If you don’t qualify for COBRA, and only need coverage for a few months, you can apply for a short-term plan. If you don’t know how long you’ll need coverage, buy an annual individual health insurance plan. You can pay annually, semi-monthly, or monthly, so choose the payment plan that works best for you.

Whatever you do, don’t risk going without insurance. My parents’ friends decided they could do without coverage for three months, but the husband had a major heart attack one month after their coverage lapsed. Fortunately, he was a valuable enough employee that his new employer paid for his car, but don’t count on your new employer doing the same. Unlike renter’s insurance or auto insurance, everyone eventually needs to use their health insurance.

Most of my friends who rent don’t have renter’s insurance, for one of three mistaken reasons:

  • They think it’s too expensive
  • They think their landlord’s policy covers them
  • They think their stuff isn’t worth much.

If you rent, then you do need a renter’s policy. It’s actually very affordable – it’s usually less than $20 a month. $12 a month is the national average. I pay $20 where I live in California, and that buys me $20,000 in coverage with a $500 deductible.

What Renter’s Insurance Covers
Rather than the structure, renter’s insurance covers your possessions. Your landlord’s policy will only cover the structural damage. If your stuff is ruined due to a leaking pipe or collapsed ceiling, you might be able to sue your landlord, but a renter’s policy will cover you with less hassle.

In most cases, insurance policies protect your personal property from loss due to fire, theft, vandalism, water, and other similar damage. Most policies also cover a limited amount of liability if you injure someone or if they’re injured in your rental property.

Some policies will also cover theft of your property when you’re away from home. For example, if you’re traveling and your suitcase is stolen, your renter’s policy may cover the loss of your clothes.

What Renter’s Insurance Doesn’t Cover
Renter’s insurance, like homeowners insurance, doesn’t cover everything. If you live in a flood zone or earthquake country, you may need a supplemental policy. My insurance agent recommends against earthquake insurance for renters because the deductibles are high and the coverage is low. It’s mainly designed for structural damage incurred by owners.

Most policies offer only limited coverage for the following items. If you have any of these, you should ask about a special rider to cover them:

  • Cash
  • Business equipment
  • Jewelry
  • Furs
  • Firearms

How Much Coverage You Need
The level of coverage you need depends on the value of your personal property and the cost of replacing it. The more stuff you have, the more you’ll need to cover. State Farm has a handy estimator as part of their quote tool.

According to their tool, I would need a policy worth $40,000 to cover the entire contents of my 4.5 room apartment in a total loss (that’s two bedrooms, a living room, and a kitchen with dining room.) My policy is only $20,000, but I didn’t factor in replacing all of our books, CDs, and DVDs. I estimate that it would cost right around $20,000 to replace the following items if we shopped carefully:

  • Clothing
  • Bedroom furniture
  • Linens
  • Personal care items
  • Luggage
  • Computers
  • Entertainment center
  • Desks
  • Living room furniture
  • Dining room furniture
  • Cookware
  • Dinnerware
  • Flatware
  • Glassware.

To determine how much you need, write an inventory of your home or apartment, along with the current value or replacement cost of the items you could/would replace. As I said, I wouldn’t replace all of my books or CDs, just some of them. I’d look at this as a chance to get only what I really needed, rather than to replace the odd collection of kitchen utensils I’ve amassed over the years.

After you’ve completed your inventory, put the list and photos or a video of your belongings in a safe place off the property. I don’t have a safe deposit box (it’s been on my “to do” list for a year now), so I gave them to my parents and they gave me theirs.

How to Buy a Policy
If you have auto insurance, contact your insurance company to see if they offer renter’s insurance. If you can combine your policies, you’ll probably get a discount on both. If your insurer doesn’t offer it, then go online to find it at a site like NetQuote, which offers competitive renter’s insurance quotes. You may need to contact an insurance agent. When I bought my policy, State Farm was the only company offering it, but there are now numerous companies offering policies.

Compare quotes from a few different companies and check them out with the state insurance commission. You should also compare the levels of coverage they each offer. Most will offer actual value coverage, but spend a little extra to get replacement value coverage if it’s available.

Unlike my auto policy, I’ve never had to tap my renter’s insurance policy, but I’m glad I have it every time I turn on the news and see an apartment building engulfed in flames. Don’t be so cheap that you avoid insurance to save $20 a month. Anything can happen. If you’re not insured, Murphy’s Law guarantees it will.

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