RedEye, Chicago, Carolyn Bigda RedEye column

Sept. 29--Renters insurance may seem like the last thing you want to spend money on when moving into a new apartment and trying to get settled. But it is a cost you shouldn't skip.

More people are renting homes now, too. A report published recently by the Joint Center for Housing Studies of Harvard University shows that in 2014, the U.S. homeownership rate fell to 64.5 percent, the lowest level in two decades.

Meanwhile, the number of renter households has increased by an average of 770,000 annually from 2004 through 2014, the fastest pace for a 10-year period since the late 1980s.

Young people are especially likely to rent. According to the study, nearly 40 percent of renters in 2014 were 35 and younger.

Already, many households are stretching to afford their monthly rent. And unlike homeowners insurance, which is required for a mortgage, not all landlords or property managers require renters insurance to get an apartment.

As a result, many people forgo it.

According to the Insurance Information Institute, 95 percent of homeowners had homeowners insurance in 2014. By contrast, only 37 percent of renters said they had bought renters insurance.

But by skipping insurance, renters open themselves up to a big financial risk.

"A lot of times people say they don't need coverage because they think they are covered by a landlord's policy," said Jovana Evans, director of property product research at Liberty Mutual Insurance, a Boston-based insurer. "But that's not the case."

If you're not familiar with renters insurance, Evans offers these tips on what you need to know.

What it covers. Renters insurance covers personal belongings, such as your couch, TV, laptop and clothes, if they are damaged or stolen. And the coverage is not limited to the space just inside your apartment. The policy also kicks in if, say, your bicycle gets pinched from a bike rack or items are stolen from your car.

"Generally, renters insurance will cover your belongings wherever you are," Evans said.

In addition, the insurance can protect you from personal liability in case, for example, someone slips and falls in your apartment and you are held liable for the injury, or if you cause damage to another person's property.

"This is an important piece of the coverage that people often overlook," she said.

It's affordable. Many people forgo renters insurance because they think it will be too expensive.

But the average policy costs about $12 per month--the price of one movie ticket in some cities--for $30,000 worth of property coverage and $100,000 of liability coverage, according to the Independent Insurance Agents & Brokers of America.

Bundle the policy with other types of insurance, such as auto coverage, and you may qualify for a discount of as much as 20 percent.

Don't believe your stuff is worth much? Think again.

"Once you consider the cost of your clothes, your computer, your furniture, it all adds up to a lot of money really quickly," Evans said.

To determine how much your belongings are worth and the amount of coverage you need, most insurers provide online calculators to help you make an estimate.

You can also keep an inventory of your belongings online or through a mobile app, which will come in handy if you need to file a claim down the road. Check with your insurer for an inventory tool, or use the Insurance Information Institute's free version, Know Your Stuff (knowyourstuff.org.)

There is a deductible. And speaking of claims, most renters policies will have a deductible, or an amount you have to pay before insurance kicks in.

Usually, the deductible is about $500, Evans said.

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