Renters insurance is a critical coverage for anyone who leases a home. Yet studies show that well over half of young adults who rent a home or apartment do not have this type of insurance coverage. Not having renters insurance coverage could be financially devastating in the event of theft, fire, burglary or an on-site accident. Why do so few people in their 20s and 30s purchase this important coverage?
They think it’s too expensive. This is a huge misconception about the cost of renters insurance. It’s actually affordable! The average renters insurance policy is less than $200-$300 annually. Per month, that’s less than the cost of dinner and a movie or several trips to Starbucks.
They don’t think they need it. More than 40 percent of young adults without renters insurance don’t think they need it. Yet nearly 70 percent of renters in the survey said it would cost more than $5,000 to replace their belongings in the event of theft, fire or other disaster. Landlords typically purchase policies that protect their investment — their property. Protecting your belongings is up to you.
Many college students and others starting out in life don’t think they need renters insurance, but in reality, they probably do. Add up the value of your clothes, jewelry, luggage, computers, furniture, electronics and other personal possessions. Could you afford to replace everything yourself, without insurance coverage, in the event of fire or other disaster? Renters policies cover a wide range of perils, with earthquakes, floods and hurricanes being the main exceptions.
A number of different surveys show renters of all ages — but especially young adults — believe that their landlord has some type of insurance that will cover them and their belongings in the event of a loss. That’s simply not the case. Your landlord is not likely to replace your belongings in the event they are destroyed or stolen.
They don’t realize renters insurance includes liability coverage. In one survey, 40 percent of renters said they didn’t know that renters insurance would cover their stolen property. Renters policies definitely cover personal belongings! But liability is an important issue too. About 30 percent of renters didn’t know that renters insurance provides liability coverage as well in the event that a visitor is injured in their apartment or rental home or if they accidentally injure someone. That’s important because if someone is injured while visiting you in your home or apartment, you could be on the hook financially.
Renters insurance also can provide coverage when you travel or if your rental becomes uninhabitable. Some renters policies provide additional coverage beyond providing personal property and liability coverage in your leased home. Ask about all of the ways your renters insurance coverage can protect you and inquire about any add-on options that could benefit you as well.
