Risky Business: 66% of Renters Don’t Have Insurance

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Two-thirds of American renters are taking a major risk when it comes to their  belongings.

A new survey from  InsuranceQuotes.com finds only 34% of American who rent their homes or  apartments have renters insurance, meaning many renters are taking a big gamble  with their personal items if their place is broken into or damaged.

Cost was cited as a main reason stopping people from getting coverage: the  survey found that many people assume a plan is expensive. Sixty percent of  respondents believe the annual cost was $250 or more and 21% said they thought  it cost $1,000 a year or more. However, according to the National association of  Insurance Commissioners, a plan costs around $185 a year.

Another misconception is what comes with renters insurance, says Laura Adams,  senior insurance analyst for InsuranceQuotes.com. “People think it’s for theft  protection, but that is just a small component of what you get with insurance,” she says. “There is a big disconnect here. The coverage is very inexpensive for  what you get.”

According to the survey, the most common reasons for not having insurance  were “my apartment or rental home has good security” (57%), “renters insurance  is too expensive” (52%) and “my landlord has insurance” (48%).

Typical renters insurance covers belongings, liability and or additional  living expenses(ALE), in the wake of an emergency or damage to a rental  property, Adams says.

“Many people found this out during Hurricane Sandy,” she says. “It will cover  your hotel room, and also things like meals if you don’t have a kitchen to cook  in.”

Most landlords have a clause in their lease  that says tenants must have renters insurance, but just don’t enforce it, says  Adam Leitman Bailey, founder of New York City-based real estate  investment boutique Adam Leitman Bailey.

He says renter’s insurance doesn’t help landlords, so they’re less likely to  enforce the policy. “Because landlords don’t follow up, the tenants don’t have  incentive to get the insurance. Tenants don’t realize how inexpensive it  is.”

Leitman Bailey says ALE coverage is overlooked by renters left homeless after  a fire or flood.

Adams adds most policies have either a dollar limit or a cap on the time  limit to spend outside of the insured space.

“Any insurance company with a halfway decent policy will give you a stipend  or put you up in a hotel,” he says. “But it’s shocking how many people don’t  have it.”

The survey was conducted by Princeton Survey Research Associations  International via phone with 1,004 adults living in the U.S.

Read more:  http://www.foxbusiness.com/personal-finance/2013/03/11/renters-insurance-why-americans-dont-have-it/#ixzz2NGYEoN3x