Even for a the cheapest of cheapskates, any kind of home contents insurance is cheap in comparison to most insurance policies. It will run you between $15-$30 per month (NAIC.)

There are good reasons for the difference in price. But what, exactly, is the difference between an uber-cheap home contents insurance policy and a just plain cheap one?

• The way insurance companies figure out the value of the stuff you've lost
• The amount of coverage you get
• The different types of coverage included

Things like your credit rating and where you live will also be factored in when insurance companies are figuring out your rate.

Cash Value Payout Policies Are Cheaper Than Replacement Cost Policies

A cash value policy will pay you whatever the lost item is currently worth in the market. A replacement cost policy will pay you the cost of replacing the item, regardless of depreciation.

Whether one is better than the other depends on whether this makes a difference to you and how much you're willing to pay.

Looking at Limits

When it comes to amounts of coverage, if a standard policy's limits match or exceed the amount you've determined your stuff is worth based on a thorough home inventory, then you're probably good.

However, if you're going for the lowest bidder without first determining what you need to avoid being uninsured, then you're making a costly mistake.

Cheap Home Contents Insurance: Saving vs. Skimping

I know scoring the cheapest rate may be your priority, but make sure that when you're comparing, you don't do so solely by price. You need to also look at what's covered and to what extent.

When you're shopping around for insurance quotes at a trusted site like insurancerates.com, be sure to keep an eye on limits and types of coverage in addition to the price of the premium.

A little research and multiple quotes will soon put you in control. You'll protect your stuff from disaster and your wallet from over-paying.