NEW YORK, September 22, 2014 — The number of renters has growndramatically in some of the most populous—and disaster-prone—U.S.cities, yet few renters actually purchase insurance, according tothe Insurance InformationInstitute (I.I.I.)

Indeed, only 37 percent of renters have renters insurancewhereas 95 percent of homeowners have a homeowners insurancepolicy, according to a 2014 I.I.I. poll conducted by ORCInternational.

“Renters insurance provides a very important financial safetynet when there is a disaster,” points out Jeanne M. Salvatore,senior vice president and chief communications officer for theI.I.I. “And, renters insurance is relatively inexpensive—theaverage cost of a renter's policy is only $187 per year, or lessthan four dollars per week.”

Homeownership has fallen for over the past decade, according toPew Research. And, in major cities such as New York, LosAngeles, Chicago and Houston, renters outnumber homeowners, theU.S. Census Bureau reports. These cities are also at risk fromnatural disasters such as hurricanes, flooding, earthquakes andsevere winter weather, as well as fire, theft and vandalism.

“Many renters are under the misperception that their landlord'sinsurance policy will reimburse them if their personal property isdamaged or destroyed, but that's just not the case,” saysSalvatore. “Fortunately, renters have a range of insurance optionsto choose from.”

The following types of policies are available to renters:

• Renters/Tenants Insurance

Renters insurance provides financial protection against damageto or loss of personal possessions due to hurricanes, fire,lightning, theft, explosion and other disasters listed in thepolicy. There is even coverage for water damage caused by burstpipes or a neighbor who forgets to shut off the water in the tub.Coverage is available on either an actual cash value basis(depreciated value) or for its replacement cost (no deduction fordepreciation). Renters insurance does NOT cover flooding andearthquake, but separate policies can be purchased for theseevents.

Renters insurance also provides coverage for additional livingexpenses, in the event you are unable to live in your home due to afire or other insured disaster. It also includes liabilityinsurance if you, a family member (or even your pet) accidentlyinjure someone and they sue you. For more information: What You Need to Know about Renters Insurance; RentersInsurance Checklist.

• Flood Insurance

Flood insurance is available from the National Flood InsuranceProgram (NFIP) and a few private insurance companies. It providescoverage for personal possessions on an actual cash value basis,generally up to about $100,000. More information is available atwww.floodsmart.gov. TheI.I.I. also has a video: Understanding Water Damage and Flooding.

Excess Flood Insurance is also available if a renter would likemore coverage than is in the NFIP policy or if federal floodinsurance is not available in their community.

• Earthquake Coverage

Renters can purchase insurance for damage to their personalpossessions due to earthquakes from private insurance companies orin California from the CaliforniaEarthquake Authority. Coverage is available either in the formof an endorsement or as a separate policy. Earthquake insuranceprovides protection from the shaking and cracking that can destroybuildings and personal possessions. Coverage for other kinds ofdamage that may result from earthquakes, such as fire and waterdamage due to burst gas and water pipes, is provided by a standardrenters insurance policy.

• Umbrella Liability

An umbrella liability policy can be a cost-effective option forincreasing your level of liability protection. The policy kicks inwhen the limit on your renters insurance has been reached. It willalso provide coverage for libel and slander. Umbrella policiesgenerally cost about $150 to $300 per year and will also provideadditional liability protection if you own a car, boat and even asnowmobile. Because the personal umbrella policy goes into effectafter the underlying coverage is exhausted, most insurers willrequire specific underlying limits on your policies. For instance,you may be required to have $300,000 of liability insurance on yourrenters insurance policy and at least $250,000 on an auto insurancepolicy.

• Floater or Endorsement for Expensiveitems

If you own expensive jewelry, collectibles, musical instrumentsor even high-end sports equipment, you may want to add a floater orendorsement to your renters policy. This would provide broadercoverage for risks such as “mysterious disappearance.” So even ifyou lose the item, you would be covered. For more information:Floaters and Endorsements: Special Coverage for Valuables.