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Nearly all homeowners (95%) have homeowners insurance, but renters insurance isn’t nearly as popular, according to a 2014 poll from the Insurance Information Institute. In that survey, only 37% of renters said they had such policies, though that’s an increase from 29% in 2011, when the survey first asked about it.

What consumers may not realize, whether they have renters insurance or not, is how handy these policies can be. They’re generally pretty cheap — the national average for a renters insurance policy is about $15 a month, according to the National Association of Insurance Commissioners (NAIC)— and they can save you from being financially liable for pricey property damage.

The homeownership rate at is at a nearly 50-year low in the U.S., meaning there are more renters out there. Whether you’re among the majority without renters insurance or unfamiliar with the benefits of your policy, there are a few things you may want to know about this type of insurance.

How Much It Costs

As previously stated, renters insurance is pretty affordable, especially when you compare it to average homeowners insurance premiums. The annual premium for homeowners insurance was $1,034 in 2012, the most recent data provided by the NAIC, while renters insurance premiums averaged $187 a year. That’s $86 a month versus $15.60.

Your premium will depend on a variety of things, like your deductible, level of coverage and location, but you can get tens of thousands of dollars in coverage for about $15 a month.

“Consumers often don’t realize how much their stuff adds up to,” said Stacey Vogler, a spokeswoman for Protect Your Bubble insurance. “The average person has about $12,000 worth of things if you’re just looking at maybe four things per room.”

What It Covers

Renters insurance covers the sort of things you’d expect, like anything damaged by a fire, for example, but it pretty much covers anything that happens to your stuff while it’s in your place. Of course, you need to go over the specifics with your insurer to know exactly what’s covered and what’s not. Vogler listed some of the possibilities:

“You could be protected if there’s injury or damage to someone else’s property while in your apartment, if some of your items are stolen while you’re traveling, if your apartment or your home is damaged from someone else’s fire or someone else’s water leak,” she said.

Personal property increasingly includes expensive items like smartphones, home theaters, laptops and tablets, not to mention what it might cost you if your entire wardrobe is damaged when a pipe bursts in your upstairs neighbor’s apartment. The potential cost of replacing your belongings is one of the biggest arguments for getting renters insurance, but it’s also something more and more property managers are requiring of their tenants. Vogler said that’s an emerging trend.

Deciding what insurance you need is always a tricky exercise in budgeting, because we all hope we never have to use things like renters, pet or life insurance, and if we don’t use it, why would we want to pay for it? Of course, if an emergency happens, it can save you thousands of dollars and help you avoid going into debt, so you need to weigh the risk of going without insurance for the sake of making room in your monthly budget.

Getting insurance is a conversation that goes hand in hand with having an emergency fund, because both can help you avoid a financial disaster in the event of unexpected expenses. Emergencies often put people into debt, sometimes hurting their credit in the process and damaging their finances in the long term. Good credit can save you a lot of money over the course of your lifetime — we explain what a good credit score is here — which is why it can help to have protections in place in case of emergencies.

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