Every year, more millennials become first-time renters after graduating from college or moving out on their own. Unfortunately, the vast majority of them also join the ranks of the nearly 70 percent of U.S. renters that don’t have renter’s insurance.
Young people often don’t know that they’re not covered, and don’t understand that they could lose everything they own in the case of a fire or burglary. What’s more, a shocking 52 percent of renters surveyed by InsuranceQuotes.com said they thought they couldn’t afford renter’s insurance, with more than a fifth estimating that it would cost them more than $1,000 a year.
The good news is that insurance agents and brokers are perfectly positioned to help correct the misconceptions of many millennial renters. Agents are your best source of information about what renter’s insurance covers, and how much renter’s insurance will cost you.
If you are in the market for renter’s insurance for the first time, keep these four things in mind:
1. Your Landlord’s insurance policy does not cover your (the tenant’s) possessions.
Everyone in the insurance industry knows this, but a surprising number of millennials don’t. Many young renters assume that their landlord’s insurance policy covers their personal property inside the apartment, and they don’t need insurance like homeowners do.
The fact is, the landlord’s insurance policy covers only the building and things they furnish to the tenant, not the tenant’s possessions. A tenant must purchase a separate renter’s insurance policy in order for their furniture, clothing, technology, etc to be covered in the event of a loss.
2. It’s not as expensive as you think.
The fact that so many renters overestimate the cost of renter’s insurance is a big problem, but it’s also easily solved.
Most renter’s insurance policies cost significantly less than you think: the National Association of Insurance Commissioners (NAIC) estimates that a policy costs $185 per year on average. And given that the typical burglary causes about $2,100 in losses, renter’s insurance is actually quite a good deal.
3. “I don’t own enough stuff” is no reason to go without.
Many first-time renters underestimate the value of the property in their apartment, but their possessions are usually more valuable than they think. Millennials will often bring furniture with them from their parents’ homes, and don’t realize how high the replacement value of these items can be. Household items like couches and mattresses cost several hundreds of dollars each to replace.
In addition, many renter’s insurance policies either include, or have the option to include, identity theft coverage. Since most millennials own either a laptop, smartphone or both, they must understand that their renter’s policy can cover not only the loss of their device, but also any misuse of the financial data that’s stored on it. Financial fraud from identity theft can do serious damage to a young person’s finances. Renter’s insurance can protect you.
4. Renters insurance covers more than your property.
Beyond covering personal property, most renter’s insurance policies also cover liability and additional living expenses (ALE). If someone gets hurt while visiting your apartment, your renter’s insurance policy can help cover any liability costs. Additionally, if your apartment should be destroyed or become temporarily uninhabitable, most renter’s insurance policies will cover the costs of hotel rooms and other living expenses. These issues are not typically the first thing on the mind of 20-somethings getting their first apartment, but they are very important.
Another benefit to having renter’s insurance?
Getting the multiple-policy discount if you insure your auto with the same company as your renter’s insurance. Many people miss out on the savings they could receive by bundling their auto and renter’s insurance together through the same company.
Make sure you are not wasting your money and talk to your agent today. If you don’t have an agent yet, call the Reno Agency at 269.792.2232 or toll free at 877.774.7366.
To read the original article, “4 Lessons to School Millennials on Renters’ Insurance,” posted by Property Casualty 360, click here.