Millions of Renters Lack Insurance, Says Agents’ Survey

May 24, 2006

Almost 25 million U.S. families renting their homes are going bare on insurance coverage, leaving themselves vulnerable to serious property and liability losses. Many renters without coverage own valuable, high-tech equipment and face higher risk related to pets, a new national survey conducted by Trusted Choice finds.

The new survey uncovers a persistent lack of awareness or understanding about property and liability risks faced by renters, says Trusted Choice spokesperson Madelyn Flannagan. Two-thirds (67 percent) of U.S. families that rent lack coverage.

Some 35 million homes were rented in 2005, or about 31 percent of all American households, according to the National Multi Housing Council (www.nmhc.org). Renters insurance replaces furnishings and property in an apartment, condominium or other rental home should those items be stolen, destroyed or damaged. The policy also includes liability coverage, a safety net against a lawsuit or claim that potentially could result in a large financial hit on renters.

Among those respondents who said they don’t have renters’ insurance, 26 percent feel that the coverage is too expensive and another 17 percent said they didn’t know they needed it. Moreover, another 8 percent have never heard of renters’ insurance.

“Insurance protection isn’t a ‘nice-to-have’ for renters,” Flannagan said. “It’s an essential backup for property losses – such as water and fire damage – as well as today’s liability risks faced by Americans: slips and falls, accidents at parties, pet attacks, and lawsuits by landlords, for example.”

Coverage for renters is widely available and affordable in most parts of the country, with the average annual premium about $20 per month for about $20,000 of property coverage and $500,000 of liability coverage, Flannagan said.

Renters sometimes mistakenly believe they’re covered under their landlord’s insurance policy following a loss or claim, Flannagan noted. “You’re really on your own. Landlords are interested only in insuring the buildings and the infrastructure for those buildings, such as elevators and heating/cooling systems. They’re not covering the contents or liability of individual tenants.”

Moreover, the actions by another tenant – such as negligence causing fires and water damage, for instance – have obvious implications for the property and safety of other tenants in a building, Flannagan said.

Among the Trusted Choice survey results:

Property Concerns: An overwhelming majority (89 percent) of all renters own one or more valuable electronic devices, such as digital recorder devices, desktop and laptop computers, digital and video cameras and home theater systems. More than half (53 percent) of renters own exercise and/or sports equipment such as a bicycle, exercise equipment or skis. Both groups of owners – electronic devices and exercise equipment—are slightly more likely to own renter’s insurance than non-owners.

Pet Owners: Half of all renters own pets, and these tenants face increased liability exposure, especially with dogs or exotic pets. But surprisingly, renters with pets are less likely to be insured, Flannagan said. The likelihood of owning renters insurance is much lower (26 percent) among pet owners overall than it is among those who don’t own any pets (32 percent).

Business: For entrepreneurs operating a business out of a rented home, renters’ insurance isn’t the only protection they need. They probably should have a separate business policy, Flannagan said. But the likelihood of owning renters insurance is not much higher (31 percent) among those who own and operate a firm out of their condo, apartment or other rental property than among those who do not (29 percent), the survey found. (Only 5 percent of renters surveyed said they own an at-home business.)

College Implications: College students heading to school this fall could be putting their families at risk, the survey suggests. While homeowners’ coverage typically extends to students living in campus dormitories, coverage applications for off-campus housing are vague and should be discussed with an agent before moving day, Flannagan said. “Often, a separate renters’ insurance policy is the best bet for the risks students and their families assume with an off-campus rental.”

Source: Trusted Choice

Latest Comments

  • May 25, 2006 at 1:55 am
    CT Agent says:
    If you explain to someone that you actually don\'t have to have assets to be sued...and introduce the terms \"Garnished Wages\" & \"Lien\" you can open a whole new set of eyes... read more
  • May 25, 2006 at 9:31 am
    OH girl says:
    I\'ll bet these same people that \"can\'t afford\" renters insurance buy at least $5 of lottery tickets every week. Their chances of having a fire or liability claim are a lo... read more
  • May 25, 2006 at 8:47 am
    Dilbert says:
    Around this neck of the woods, the only people that rent are those that can\'t afford to buy a house. Most of these people are struggling paycheck to paycheck and renters insu... read more
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