Nationwide Insurance Study Shows Startling Lack of Renter’s Insurance

renters insurance

Less than half of renters purchase renter’s insurance, even though it is much cheaper than homeowner’s insurance, according to a new study aimed at the millennial generation.

The greatest concerns over loss of property for those studied came from the risks of fire and theft, both of which are common reasons for renters to suffer a loss.

Related: 10 Ways to Lower Your Homeowners Insurance Premiums

Fire at Duke University Highlights Need for Renter’s Insurance

Renter’s insurance is not something to go without. A Feb. 20, 2014 electrical fire at a Duke University dorm resulted in destruction of all the property in the dorm room where the fire occurred and smoke damage to three other rooms.

Students, upon learning that the university does not cover damage to their personal property, were shocked. They simply assumed that damage to their property, if not their own fault, would be covered by the university.

Some dorm residents will automatically be covered by the homeowner’s insurance policy of their parents, but even when coverage is available, it is limited. Deductibles and actual cash-value provisions reduce the collectible amount under those policies. And, since just one claim can cause an insurer to not renew a policy, it’s an option that does not appeal to parents.

For Students and Non-Student Renters

Renter’s insurance offers more comprehensive coverage for less than homeowners insurance rates. For just about $20 a month, according to Nationwide, renters can buy coverage for their personal property, and since 2008 Nationwide has paid over $184 million in renters insurance claims. The average renter’s insurance claim paid by the company is $4,000.

Given that those in the study said they owned more than $5,000 worth of personal property, it’s hard to financially reconcile failing to carry the coverage. Renters need to consider whether they could afford to absorb that cost themselves or if renter’s insurance is worth the cost.

Photo credit: Milestone Management