Nearly seven of ten renters choose to go without renters insurance, the Insurance Information Institute ( I.I.I.) revealed in a recent report.
According to a survey conducted in May 2012, just 31 percent of renters have renters insurance. The majority of homeowners in the U.S. have home insurance, the I.I.I. said, but the same cannot be said for renters.
“Renters insurance provides financial protection against the loss or destruction of your possessions when you rent a house or apartment,” Jeanne M. Salvatore, the I.I.I.’s consumer spokesperson and senior vice president for Public Affairs, said in a statement.
Renters outnumber homeowners in some of the largest U.S. cities, the report noted, led by New York City (69 percent of households rented), Chicago (55.1 percent rented) and Houston (54.6 percent rented).
“While your landlord may be sympathetic if you experience a burglary or a fire, your possessions are not covered by your landlord’s insurance,” Salvatore said. “The good news is that renters insurance premiums are relatively inexpensive.”
According to data from to the National Association of Insurance Commissioners, average yearly costs for a renters insurance policy were $184 in 2009.
Renters insurance can help to protect possessions against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage, the I.I.I. pointed out.
Flood protection is typically not covered and often requires a separate policy (much like home insurance).
Renters insurance policies come in two main types: Actual cash value policies and replacement cost polices. A replacement cost policy covers the true cost of replacing possessions, while an actual cash value policy factors in depreciation when paying to replace possessions.