February 5th, 2009 by Penny Hagerman
With the housing market in a major slump and the foreclosure crisis still hovering, more and more Americans are opting to rent in lieu of buying a home.
In fact, as of about about six months ago, the Insurance Journal reports that the number of rental households in the U.S. jumped by about 1 million in 2007—before the foreclosure crisis hit its peak, forcing thousands of Americans out of their homes and into rental situations.
But as the number of renters in our country increases, the number of people purchasing renters insurance to protect their belongings is decreasing disproportionately—leaving many vulnerable to loss from theft or disaster.
The findings of a recent survey by Allstate magnifies the issue’s significance:
- Over 50 million of the approximately 87 million people living in rental housing (nearly two-thirds) do not have renters insurance.
- More than two-thirds of renters say they have not performed a home inventory checklist—and have no idea what it would cost to replace everything they own.
- 49 percent (almost half) of renters estimate that the U.S. experiences about 100,000 burglaries a year. According to experts, the actual statistic is more than 2 million—twenty times that estimate.
- Three out of ten survey respondents thought renters insurance cost at least three times as much as the actual price tag (an average of $15 per month). Another 20 percent had no idea how much it cost.
It’s obvious many renters don’t have a true handle on the facts—which might explain why they often bypass such important coverage altogether.
According to the Allstate survey, most renters cite common reasons like these for neglecting to protect themselves with such vital coverage:
- Lack of time
- Think the coverage is too expensive
- Say they don’t own enough valuables to justify the coverage
- Believe landlords are responsible for insuring personal possessions
The truth is, renters are responsible for insuring their own possessions. And, at a typical cost of less than $200 a year, most people can’t afford not to buy insurance for renters if they’re leasing a home.
Whether rental property contains a million dollars in valuable art or $500 worth of furniture, it’s now more important than ever that renters learn to think like homeowners—and protect what they still have left.