5 knocks on renters insurance -- all bogus

Highlights

• Some 43 million American renters carry no insurance on their homes.
• "Actual cash value" and "replacement cost" mean very different things.
• Renter insurance can cover you for liability away from home.

Half the 87 million Americans living in rental housing have no insurance on the contents of their home and stand to face a total loss in the even of theft or fire -- an increasing concern as we head into the holiday season.

When it comes to whether to purchase renters insurance, the answer should be a resounding yes, says Janet Portman, a lawyer and managing editor of the Nolo legal series, which publishes her book, "Every Tenant's Legal Guide."

But for a product that Portman calls, "absolutely a good thing to have," surprisingly few renters are actually on board. A recent Allstate survey shows some 43 million renters would be left hanging with the total value of their lost or damaged possessions, something most renters simply can't afford to do.

While there are a lot of reasons why people put off buying renters insurance, Jeff Moree, a product director for Allstate, says the root cause of the problem appears to be a fundamental misunderstanding of the nature of renters insurance. So, with that in mind, we'll start with some common misconceptions. After that, we'll look at what you need to know as an informed buyer.