According to Fox Business, only 35 percent of people have renter's insurance, while 96 percent of homeowners have a policy for their home. However, renter's insurance is more essential, and luckily, more affordable than you think.

So, what exactly is renter's insurance and what does it cover? 

Loretta Worters, a spokeswoman for Insurance Information Institute, speaking with Fox Business, explains: "Many people think their landlord's insurance protects them, but you need renter's insurance for your personal possessions," says Loretta Worters.

Under a standard renter's insurance plan, personal belongings are protected from events such as fire, lightning, harsh winds, theft, vehicles, building collapse, theft and falling objects. Damage incurred from floods and earthquakes is not usually included, explains Lisa Kapienski, a director of property product management. In addition, renter's insurance can cover personal items that are stolen from your car. 

Renter's insurance also covers more than you think. For example, it covers expenses, in the form of reimbursement, for additional living costs when a catastrophe forces you out of your house. It also shields you from liability if someone happens to trip or fall in your house and sues you. 

Whenever you are considering purchasing an insurance policy, it is critical to get the right amount of coverage. We suggest that you compile a home inventory list which includes most of your personal items and their approximate value. If you can afford it, you may also want to look into purchasing a replacement cost policy instead of a cash policy. While more expensive upfront, it will end up paying for itself in today's market. 

For more information on renter's or home insurance, be sure to follow our blog and, as always, contact Fundy Mutual. An individual insurance agent can guide you through the process.