There are currently around 43 million renter households in the U.S., as noted in the Census Bureau’s Housing Vacancy Survey. Surprisingly, recent research has revealed that nearly 50% of American adults ages 23 to 29 carry no renters insurance. More specifically, 46% of the respondents deemed it unnecessary, 33% thought it was too expensive, and 25% said they just hadn’t made an effort to purchase it.
Another recent survey by Forbes found that 8 out of 10 renters in the U.S. stand to lose at least $5,000 in the event of a break-in or a fire. About 40% of the survey’s participants were unaware that renters insurance could cover property loss related to break-ins and burglary. Put differently- the aforementioned Forbes survey identified a lack of awareness as one of the main factors for the low update of renters insurance.
6 common renters insurance questions:
1. What Is Renters Insurance, and What Does It Cover?
Put simply, renters insurance is a type of insurance coverage that covers your personal possessions against named perils such as break-ins, fire, and water damage. This means it covers things such as electronics, furniture, and clothes, among other personal possessions.
Additionally, most renters insurance policies contain a medical coverage feature covering accidental third-party property damage or bodily injuries that occur in your rental property.
2. Is Renters Insurance the Same As Homeowners Insurance?
While both renters insurance and homeowners’ insurance protect property, the latter only covers the actual building, not your personal possessions. In simple terms, homeowners insurance caters to property owners, whereas renters insurance caters to the renters. This means that, in the event of a disaster, your landlord cannot file a renters’ insurance claim, and similarly, you, as a renter, cannot file a homeowners’ insurance claim.
3. Who Should Carry Renters Insurance?
In essence, if you are a renter with possessions and are incapable of replacing or repairing the damages in a relatively short period, then you should consider purchasing renters insurance. Hence, if you own expensive or valuable possessions that cost way more than the annual cost of renters insurance, you should carry renters insurance coverage.
4. How Much Does Renters Insurance Cost?
As per recent industry research, renters insurance coverage is relatively inexpensive, with the average cost amounting to about $20 per month , which is around the same amount you’d spend on, say, a video streaming service or a latte.
More specifically, recent data from the National Association of Insurance Commissioners (NAIC) shows that depending on where you live; you can expect to pay $184 annually on average for coverage ranging from $30,000 to 50,000, which works out to around $15 per month, with a deductible running anywhere between $500 to $1,000.
In general, the higher the value of your personal belongings, the higher your costs will be, and vice versa. Additionally, the the actual cost varies from one insurance carrier to another, so you must shop around before settling on a policy.
5. Does Renters Insurance Cover Collectibles?
Most renters insurance policies cover collectibles and other high-value items such as expensive art and jewelry, but typically with category limits. For example, say your renters insurance policy covers up to $2,000 in collectibles loss. In such a case, if you want to file a $3,500 claim on your collectibles, the payout will be much lower than your claim, based on the category limit. However, you can purchase supplemental policies, such as collectibles insurance or jewelry insurance, to increase your coverage limits.
6. Does Renters Insurance Cover Pet-Related Damage?
Most policies cover certain pet-related damages. For this reason, you should go through your policy to learn about exclusions. Additionally, it is worth noting that adding certain breeds of dogs in your policy may cause your premiums to rise or, even worse, lose your coverage entirely.
To understand the renters insurance policy, go through this renters insurance FAQs. If you have additional questions regarding renters insurance, you can contact the experts at The Reardon Agency. We are ready to assist you with all your insurance needs today.
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