For renters who think they can live without insurance, federal statistics reveal that renters are more likely to get burglarized than home owners.

U.S. Department of Justice's Bureau of Justice Statistics says rented households were burglarized at rates 79 percent higher than owned households.

Rented households experienced 210 property crimes per 1,000 households nationwide, while owned households experienced only 146 property crimes per 1,000 households in 2001, the bureau reported.

The bureau also says households living in rented property had almost twice the rate of motor vehicle theft than those in owned property.

Renters also often overlook the danger of losing their belongings in fires, storms, floods, earthquakes and other disasters, says Manny Rios, vice president of underwriting and marketing at Homesite Insurance. The Boston-based insurer writes policies exclusively for the homeowner and renter insurance market and recently publicized the higher burglary rate.

The effort was obviously a marketing effort, but the numbers are compelling reasons for renters to get insured.

Rios says for policies that cost a few hundred dollars a year, renters can protect tens of thousands of dollars -- and more -- in possessions. Buying an insurance policy is a lot cheaper than buying a home to reduce your risks.

"Renters' insurance can help with the financial impact of losing your TV, furniture, clothing -- everything in your apartment, when due to a covered loss. When you add up the cost of your possessions, you could be looking at having to replace thousands of dollars worth of merchandise if it's destroyed, stolen, or damaged. Most people simply can't afford to replace everything at once," Rios said.

Online insurance news and information portal Insure.com says if you live in an apartment your landlord, owner or other entity should be insured against damage and losses to the building and common areas, but not your belongings, including any approved construction you've added and personally owned appliances you've installed.

Renters' insurance typically comes with a choice of deductibles and covers personal property losses from 17 types of perils -- fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, damage by glass or safety-glazing material that is part of a building, volcanic eruption, falling objects, weight of ice, snow, or sleet, water-related damage from home utilities, and electrical surge damage, according to Insure.com.

How much coverage you select should be based on an accurate and carefully documented inventory of your possessions. Keeping receipts and a photographic or video record of virtually every item you own can come in handy when it's time to file a claim.

Many renters neglect to consider how the cost to replace small items or collections like books, CDs, toothbrushes, light bulbs and the like can add up in a total loss. If you haven't inventoried every item you own, it will be impossible for you to remember every item in the emotionally trying times of loss.

Replacement coverage is either "actual cash value" or "replacement cost value." Actual cash value coverage pays for the property based on what it was worth at the time it was damaged or stolen, minus any deductible. Replacement cost coverage provides a cash benefit for the amount to actually replace the items you lost at today's cost, minus any deductible. Where available, replacement cost coverage is more expensive.

Additional coverage

Insure.com also says renters' polices also typically come with a living expense coverage to help you financially when your home becomes uninhabitable by an insured event. The coverage is limited to a percentage of the total value of your policy, typically 30 to 40 percent. On a $150,000 policy, for example, your additional living expense coverage will be about $45,000 to $60,000. Additional living expense payments may also be limited by a "reasonable length of time" your insurer will pay benefits for living expenses.

The standard liability portion of a renter's policy also protects tenants against medical costs arising from injury to visitors and related suits, again up to the policy's limits.

Along with special coverage and the additional cost of flood and earthquake coverage where necessary, the New York City-based Insurance Information Institute advises renters to also consider identity theft coverage.

It provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports, but not money lost to indentity thieves. Check with your creditor to see how liable you are for any monetary loss due to identity theft. Your liability likely is negligible because creditors are insured for such losses, including credit card theft or loss.

Identity theft insurance coverage, on the other hand, provides reimbursement benefits for phone bills, lost wages, notary and certified mailing costs and sometimes legal fees. The coverage may be included in your regular renters' policy, but standalone or endorsement policies cost $25 to $50 for $15,000 to $25,000 worth of coverage, according to the institute.

The Insurance Information Network of California says expect to pay more for special coverage to protect valuable collections, jewelry and antiques. Home movie theaters, other high-end home electronic systems and expensive computer systems also may require special coverage. If you operate a business from your rented home, special business insurance also may be required to cover your business equipment and liability.

Look for renters' insurance discounts if you have a home security system, are over age 55, are retired or if you have other policies with the same insurer.

Published: February 26, 2003

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.