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Did you know that if there’s a fire in your apartment or building, your landlord’s insurance likely won’t pay for your property losses? Same goes if someone swipes your stuff. So how can you protect yourself financially? Easy. Renters insurance.

This coverage usually compensates you if your belongings in your apartment or rental home are unexpectedly damaged, stolen or ruined. Plans can also cover costs incurred if someone gets injured in your apartment and then sues you.

You might think such gloom-and-doom scenarios are so unlikely that you don’t need renters insurance. But chances are, it’s worth it. The average policy costs about $16 a month and will cover most everything in your apartment—your clothes, electronics, furniture and more.

The best way to figure out how much coverage you need it is to do a little math. Make a list of all your belongings—clothing, artwork, instruments, sporting equipment, devices, etc. Then tally up how much you’d have to pay to replace them all; that’s the level of coverage you need.

Keep in mind, however, that it’s not always wise to file a claim. Most plans will make you pay a deductible, or a pre-arranged amount of the bill. Think about how much the cost of your insurance might increase if you file a claim. Does it outweigh the cost of just replacing the item on your own?

Many renters insurance plans will also help cover the cost of living expenses—such as hotel bills and food expenses—if long-term repairs need to be done.

But every insurance policy is different. There are events that most renters insurance policies don’t cover, including floods, earthquakes and other “acts of God.” (That’s actually the term insurance companies use.)

These things can be covered, but companies typically charge an extra premium for them. Make sure you check your policy for specific details.

A 2014 study showed more than half of young renters don’t have renters insurance. Don’t be one of them. Paying a little bit each month can save you thousands of dollars in the event of a major catastrophe.

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