Top 5 Reasons Tenants Don’t Buy Renters Insurance – And They’re all False
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A 2014 poll from the Insurance Information Institute found that 37% of renters don’t get a renters insurance policy. Are you surprised by this? We were surprised, so we did our own investigation to find out why nearly half of renters don’t protect their belongings. What we found surprised us again, because the reasons tenants cited for not purchasing renters insurance were mostly all myths and misconceptions.
If you’re a renter and you are reading this article, you may ask why we care whether renters get insurance. After all, aren’t we a service geared mostly towards landlords? Well, yes, sort of. We certainly help landlords. But we were renters once too and so were most landlords. We also deeply care about our renters, which is why we designed many of our services around renters specifically. You’ve got belongings, and most of them are likely worth a decent amount of money. Don’t you want to protect those belongings from events that are outside of your control?
So we wrote this blog to help renters, like yourself hopefully, clear the fog of misunderstanding so that you can re-evaluate whether its time to purchase renters insurance. Here are the top five reasons cited for not buying renters insurance.
- I’m covered by my landlord’s insurance
- Renters insurance is just too expensive
- My stuff isn’t worth insuring
- It’s just stuff. My stuff.
- It takes too long
Let’s talk about each one:
I’M COVERED BY MY LANDLORD’S INSURANCE
Nope. That’s just not true. Most policies for landlords cover just two things: 1) the physical structure of the building, and 2) liability should someone be injured on the property (not inside your rental unit). There’s not much in his/her policy to cover your personal belongings or liability within your space. The exception to this is when damage is done to your personal property as a result of the landlord’s negligence (he knew about a leaking pipe, took too long to fix it, and now it ruined all of your clothes). In that case, you could seek reimbursement through the landlord’s policy. However, you would be left uncovered should the property flood due to an otherwise sudden pipe bursting, or should there be a fire, vandalism or theft.
There’s also the fact that a landlord doesn’t own any of your belongings. So even if he wanted to help you out and have a claim be filed for your stuff, the insurance company would most likely determine the landlord doesn’t have an “insurable interest” in the lost/damaged/stolen property. He would then subsequently be denied, which means you would be denied.
It’s also important to note that landlords are not required by law to have a landlord insurance policy. So many tenants may think coverage exists in general where none does at all. Still, if the landlord does have a policy, it wouldn’t cover your personal belongings anyway.
RENTERS INSURANCE IS JUST TOO EXPENSIVE
Is it? Did you know you can get renters insurance for as little as 50 cents per day? The national average for renters insurance premiums is actually $12 per month. That’s only $144 per year, less than a leather jacket (and that’s just one jacket, not your entire collection of clothes if you needed to replace them all). The average policy provides for $30,000 of property coverage as well as $100,000 of liability coverage.
There are also levers you can pull that adjust the total expense. You can adjust the deductible (when you make a claim, the amount you pay before the insurance carrier pays anything) – the higher your deductible, the lower your annual or monthly premium payments. You can also increase or decrease the total coverage you want/need. A lower property and liability coverage also means a lower annual or monthly premium.
Rather than thinking that the cost of insurance is too expense, I’d flip that thinking and consider replacing all of your stuff out-of-pocket at one time is too expensive.
MY STUFF ISN’T WORTH INSURING
Please rethink this. You’ve got a couch you’re sitting on, a TV across from you, and probably a laptop or tablet that you’re reading this blog from. There’s a good chance, you’ve also got some nice clothing hanging in your closet, dozens of shoes, and nice jewelry or a watch. You may be thinking that those were all “hand-me-downs” and aren’t worth anything. It’s tempting to think in terms of what you paid, but in reality, you should be thinking in terms of what it would cost to replace those things.
So even if your TV was a hand-me down when your parents upgraded their TV, if it was stolen, you’d still want to replace it wouldn’t you? And that replacement cost is what you should consider. Estimates by State Farm show that the average single renter in a one bedroom rental has over $35,000 in personal property, determined based on the replacement cost of those items.
It’s Just Stuff. My Stuff.
Unfortunately, this isn’t true either. Well, yes, you would be insuring your stuff. But it’s more than that. Let’s say you’ve got a rug you love. It’s one of those rugs with a lion’s head attached to one side. Your friend comes over, trips on your lion head rug, and breaks a leg. It’s not just stuff anymore when you receive the $30,000 in medical bills. You have to consider that you’ll have guests over who could hurt themselves because of a weird piece of furniture or unusual furniture placement, or even because they had too much wine.
It Takes Too Long
Okay. We have to give credit where credit is due. This certainly is true. In today’s world, something that takes a full 5-10 minutes may just be too long. But, knowing what you know now from the above, don’t you think its worth the five minutes to feel and actually be more protected?
Have we changed your mind? You can learn more about renters insurance from State Farm here, including what your options are, how much it costs, and where you can go to get it.
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Rentalutions has received compensation for the State Farm product placement in this blog.