If you rent a house or an apartment, there’s a good chance you’ve been misinformed about renters insurance.

Just look at the statistics – while 95 percent of homeowners have homeowners insurance, just 37 percent of renters have renters insurance, according to a 2014 poll by the Insurance Information Institute. However, renters insurance can be just as important for protecting your assets. So why are so few Americans making the investment? The answer may lie in these four common myths:

  1. My landlord already has insurance, so I’m covered. Your landlord’s insurance will only cover the structure of the building, not your personal property. Renters insurance will cover your possessions from losses due to fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage, according to the I.I.I. However, it will not cover damage caused by floods. Renters insurance also provides liability coverage in case somebody is injured in your home or elsewhere by you, a family member or your pets.
  1. It’s too expensive. Renters insurance is actually much more affordable than homeowners insurance, costing an average of $12 per month for about $30,000 of property coverage and $100,000 of liability coverage, according to the Independent Insurance Agents & Brokers of America.

There are two types of renters insurance policies to choose from – Actual Cash Value, which pays to replace your possessions minus a deduction for depreciation up to the limit of your policy, and Replacement Cost, which pays for the cost of replacing your possessions with no deduction for depreciation, up to the limit of your policy – according to the I.I.I.

  1. I don’t have enough stuff worth insuring. Most people tend to underestimate the value of their possessions. If a fire destroyed your apartment, would you be able to afford to replace your television, laptop, electronics, appliances, furniture, clothing, jewelry and more out-of-pocket? The cost would likely add up to tens of thousands of dollars. Allstate’s online calculator, “What’s Your Stuff Worth?,” is a helpful tool for estimating the total value of the items in your home.
  1. I live in a safe location, so I don’t need renters insurance. You never know when an accident or theft could happen, so it’s smart to be prepared. According to the FBI, there were 2,199,125 burglaries in 2009, and nearly 73 percent of those took place on residential property. The average loss per burglary was $2,096. Renters insurance will also pay for your living expenses if your home is damaged by a fire or other disaster covered under your policy.

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