Study: SoCal Fires Strike Those Who Often Reject Insurance

Mobile home owners and renters often choose to go without property insurance, potentially exposing them to catastrophic losses such as those suffered in Southern California’s weekend firestorms, according to the Insurance Information Network of California.

Nearly 500 manufactured homes and more than 80 apartments were destroyed in the fires. While it’s unclear how many were uninsured, about 82,000 — or 25 percent — of the state’s mobile homes don’t carry insurance, according to a Sacramento Bee analysis of 2007 census data. Another 200,000 houses are uninsured, according to the report.

Nationwide, a 2006 poll by the Insurance Research Council found that 96 percent of homeowners had insurance while 43 percent of renters purchased insurance.

Most homeowners are required by their mortgage lenders to purchase property insurance, but those who either own their residence outright or rent may choose to go without insurance. In the event of this week’s firestorms, the decision can have tragic consequences, IINC said.

“Going without property insurance is like gambling on your future – you could lose everything,” said Candysse Miller, IINC executive director. Renters should not mistake their landlord’s insurance policy on the apartment structure for insurance that will replace their belongings. Renter’s insurance policies will cover the destruction or theft of property, as well as additional living expenses if you are displaced by a covered peril. It also provides liability coverage up to the limit of the policy.

IINC offers a number of tools to help consumers track and evaluate their insurance and finances. For more information, visit the IINC Web site at www.iinc.org.

Source: IINC