The majority of tenants don’t carry renters insurance, this according to a new survey by InsuranceQuotes.com.
Young renters — millennials — are the most likely of all age groups to report that they don’t know how renters insurance works and don’t know how to secure a policy, according to the survey. Millennials comprise one of the fastest growing renter demographics.
Only about 37% of renters carry insurance, which covers their personal belongings from loss due to catastrophes like apartment fires, and can be expanded to cover liability for tenant negligence or that of their guests.
One of the main reasons cited for failure to obtain renters insurance is the perceived cost. While the average cost typically is under $200 a year, many survey participants pegged it at as high as $1,000 per year or more.
A whopping 43% of tenants surveyed believe, incorrectly, that the landlord’s insurance will cover their losses.
Other common reasons tenants cited for failing to be insured include a strong majority of renters who believe that they won’t need it, that their belongings aren’t worth the cost of insurance, or a lack of knowledge of how insurance works and where to get it.
Landlords benefit when renters have insurance because it is unlikely that the landlord’s policy will cover any loss of personal items, like the tenant’s clothing and furniture. Renters insurance provides a way for tenants to recover quickly from an unexpected loss, and to keep paying rent. Otherwise, the tenant’s financial loss could soon become the landlord’s.
Also, where tenants’ losses are insured, they are less likely to consider legal action against the landlord.
While many landlords and property managers stop short of demanding all tenants carry renters insurance, given the findings in the survey, it may be a wise to at least offer tenants the correct information, including average costs and the value of renters insurance so a tenant can make an informed decision. Insurance professionals encourage tenants to take a few minutes to inventory their belongings. This exercise is a good way to make tenants realize just how much they have to lose by being uninsured.
The survey can be seen in its entirety here.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.