Renters insurance is a critical coverage for anyone who doesn’t own a home. Yet a new survey shows that well over half of young adults 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? In the survey, renters reveal why:
They think it’s too expensive. This is a huge misconception about renters insurance. It’s actually affordable! The average renters insurance policy is less than $200 annually. That works out to less than $20 per month — less than the cost of dinner and a movie!
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. 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?
Some young adults mistakenly believe that their landlord has insurance that will cover them and their belongings. But know that your landlord’s insurance covers your landlord’s property, not their tenants’ property. Your landlord will not pay to replace your belongings in the event they are destroyed or stolen.
They don’t understand how it could protect them AND their belongings. In the survey, 40 percent of renters said they didn’t know that renters insurance would cover their stolen property. About 30 percent didn’t know that renters insurance provides liability coverage in the event that a visitor is injured in their apartment or rental home. That’s important because if someone is injured while visiting you in your home or apartment, you could be on the hook financially.