Renters Insurance Is Simply A Good Policy

If you rent a home or apartment, what's your feeling about renters insurance?

Convinced you don't really need coverage? You're not alone. The Independent Insurance Agents and Brokers of America (IIABA) commissioned a national phone survey of 1,000 renters. Their results, said IIABA CEO Robert A. Rusbuldt, “were mind-boggling to us.”

When the survey agency, International Communications Research, asked participants living in rental properties whether they had renters insurance, 64.4 percent said no and 2.2 percent said they didn't know.

“When you think about this, there are 81 million Americans who rent homes or apartments,” Rusbuldt said. “Take 64 percent of that, and you're over the 50 million mark of Americans who don't have renters insurance and need it.”

As big as that number is, it may be understated, said Bob Bader, president of Bob Bader Co., a point-of-lease personal property and renter's insurance provider. He points to surveys by the Insurance Information Institute over the past 10 to 15 years that peg the figure closer to 75 percent.

Renters who make up this group fail to realize that for an affordable monthly cost, they can insure all of the possessions in their apartments or rented homes. Such coverage is essential, given the fact that fire, flood, theft, act of vandalism, lightning, tornado, hurricane or other catastrophe could leave them on the hook for replacement of possessions worth tens of thousands of dollars, say industry experts.

“It's an incredible gap in exposure, especially with the threats coming from mold,” said Susan Weston of the National Apartment Association. “We're seeing people being forced to move out of apartments due to mold. If you have mold in your apartment, you have mold in your belongings.”

Renters insurance is called a “package policy” within the insurance industry, Bader said. The package is the combination of personal property insurance and personal liability insurance. The liability aspect of a policy covers renters if guests are injured in their apartments or if they accidentally start a fire. In the case of a fire, the landlord's insurance company could sue the renter who caused the fire, and his or her insurance company would pay the bills.

Ultimately, the biggest reason to have renters insurance isn't what you might do to your apartment. It's what renters living next door might do that could damage your apartment and the possessions within it, Bader said.

Renters offer many reasons for failing to obtain insurance. The most prevalent is the erroneous belief landlords are responsible for contents in apartments. “But if the home or apartment complex burns down, it's the renter's responsibility for any possessions within the apartment or rented home,” Rusbuldt said. “It's their responsibility, not the responsibility of the owner of that property.”

If you or one of your family members is currently renting a home, apartment or condominium, please consider the security of renters insurance. Our agency would be happy to discuss this inexpensive, yet vital, coverage with you.