Renting? – Insure Your Property

In 2006, an Insurance Research Council poll found that less than half of renters have a renter’s insurance policy; over 95 percent of homeowners had homeowners insurance.  The percentage of renters carrying renter’s insurance may have declined since then; a new survey commissioned by an online service found only 34 percent of American renters have renter’s insurance

Perhaps the recession has made some people more willing to accept the risk of loss rather than the certainty of a premium.  This may not be a good choice these days.  Independently, surveys by several insurance companies have shown that renter’s, on average, have a substantial exposure.    A study by USAA insurance suggests the average renter has more than $20,000 in possessions and a similar study by Allstate puts the total higher – at around $30,000. 

There may be several reasons why people don’t buy Washington renters insurance.  One reason may be the mistaken belief that their landlord’s insurance policy will cover their belongings in the event of a fire or theft.  Typically, that is not the case – a landlord is not generally responsible for the renter’s belongings and landlords are now increasingly even requiring tenants to buy their own renters insurance policy.  Another reason is the presumption that renter’s coverage is expensive.  This is born out through survey data that found 60 percent of respondents believed renter’s insurance would cost $250 a year or more; 21 percent guessed it would cost over $1,000.  In fact, renter’s insurance is very affordable and while it varies by state and by company, the Independent Insurance Agents & Brokers of America (IIAB), estimate the average cost for renter’s insurance is about $12 per month for $30,000 worth of property coverage and $100,000 of liability coverage. 

There are really good reasons to consider renter’s insurance.  The most important could be liability coverage – a visitor is injured in your home or their property is damaged or stolen.  Your renter’s insurance can help protect you in the event of a claim or suit.  If you have a theft, fire or other damage (excepting flood or earthquake damage), damage to your possessions should be covered.  It can also help in catastrophic situations like fire by providing support for an alternative living situation.  Renter’s insurance may even cover losses outside your home – like someone stealing your laptop while you’re out and about.  

Before purchasing a Washington renter’s insurance policy, do a careful home inventory. Go room to room and photograph and document the value of each item in the room. This will allow you to see exactly how much coverage you will need, and don’t be surprised if the value of what you own is higher than your gross estimate.  Finally, if you have high end items – fine art, antiques, jewelry or computers – make sure you can get adequate coverage.  If you are insuring through Homer Smith Insurance, we can help you with this.

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