Survey: Renters Ill Equipped to Protect Belongings

August 19, 2008

As the number of Americans renting homes increases with the current housing foreclosure crisis, a survey by Allstate finds most renters are inadequately prepared to protect their belongings.

While homeowners coverage is required as a part of most mortgages, renters face no such insurance requirement. As a result, just 40 percent of survey respondents said they have renters insurance, meaning that over 50 million of the approximately 87 million Americans living in rental housing do not have insurance to cover their belongings in case of loss.

The share of rental households jumped by about 1 million in 2007 and this group is likely to expand further if foreclosure trends continue, according to Harvard University’s Joint Center for Housing Studies. Now more than ever, it is critical for renters to be prepared to protect their possessions in case of a loss.

Allstate’s survey also found more than two-thirds of renters say they have not done a home inventory check list, or tried to estimate the cost of replacing everything in their home in the past year or two. Fewer than one in five renters say they have taken photographs or videotaped their possessions during the past two years to help document what they own.

The survey found most renters underestimate the threat theft poses to their belongings. Nearly half (49 percent) of renters surveyed estimated the number of annual burglaries and other property crimes in the United States, at less than 100,000, while the actual number of burglaries alone is 20 times that. According to the FBI’s most recent Uniform Crime Report, there were more than 2 million burglaries in the U.S. in 2006. Only one in 20 renters guessed the number was in this range.

“This survey highlights the importance of educating American families who rent about the risks facing their possessions,” said Jeff Deigl, assistant vice president of specialty product lines for Allstate. “It’s a wake-up call to increase awareness of the available options to manage these risks.”

The survey found that the biggest reasons renters don’t purchase renters insurance are: 1) they haven’t made the time to look into it (43 percent) or 2) they believe the coverage is too expensive (33 percent). Various other reasons such as not owning enough valuables to justify having the insurance and believing landlords are responsible for insuring renter’s personal property were given by 23 percent and 10 percent of respondents, respectively.

Misperceptions about the price of renters insurance were particularly telling. Three out of ten respondents thought renters insurance cost at least three times as much as its actual price tag, an average of $15 per month. Another 20 percent had no idea how much it cost. When polled, six out of ten renters thought renters insurance was worthwhile, even at an average of $20 per month.

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