Research is indicating that many tenants feel that coverage is less affordable than it actually is.
Though the number of tenants is on the rise, according to national American statistics, over half are not protecting their possessions and their place to live through renters insurance.
The primary reason that tenants have identified as a barrier to coverage is an inability to afford it.
Recent research performed in Atlanta and other major American cities have shown that a misunderstanding of the cost of renters insurance is leading many tenants to refrain from purchasing coverage that could potentially benefit them. These individuals – who typically have tighter budgets than their homeowner counterparts, think that they are unable to afford the coverage.
However, research has shown that there is a widespread misunderstanding of the cost of renters insurance.
This same study has indicated that renters insurance coverage is actually considerably less expensive than many people believe. A recent survey showed that most people feel that they spend approximately $20 per week on coffee. When that is compared to statistics from insurers, the average cost of a policy is $15 per month – which would be the equivalent of about $3.75 per week. That’s only a fraction of the cost of coffee every day.
The next barrier to purchasing renters insurance is the belief that many tenants hold that says that their landlord’s coverage would protect them in the case of a fire or other similar peril. However, the landlord’s policy is meant to cover only the building. The damage to the structure, walls, ceilings, flooring, windows, etc, would be covered, but a tenant’s possessions – such as electronics, furniture, clothing, jewelry, etc – would not.
Finally, tenants feel that their possessions may not be worth the coverage and therefore they do not purchase renters insurance. However, what they don’t realize is that a policy does not just cover the loss of the contents in a unit, but it also covers the cost of alternative housing that the policyholder would require during the time that the apartment is unlivable.
The industry is suggesting that tenants have a second look at renters insurance, its costs, and what it covers, as this research is indicating that many are basing their decisions on a misunderstanding of the policy.