Although the majority of homeowners purchase insurance for their home, when it comes to renters, only 65 percent have renters insurance, according to a poll conducted for the Insurance Information Institute (I.I.I.).
The number of renters is steadily increasing. According to an April 2013 U.S. Census Report, the share of housing occupied by renters rose to 35.4 percent in 2013—up from 34.1 percent in 2009. And in some of the country’s largest cities, renters significantly outnumber homeowners. In New York City, 69 percent of households rent their homes, followed by Los Angeles (61.8 percent), Chicago (55.1 percent) and Houston (54.6 percent).
“One of the biggest insurance problems after Sandy was the large number of renters who did not have coverage for their homes,” pointed out Jeanne M. Salvatore, the I.I.I.’s consumer spokesperson and senior vice president. “It can be extremely expensive to have to re-buy the entire contents of your home, so a renters insurance policy provides very important financial protection when there is a hurricane or other covered disaster.”
Renters insurance is relatively inexpensive. In fact, the average renters insurance policy costs only $185 per year in 2010 (the latest year this data is available) according to the National Association of Insurance Commissioners.
With renters insurance, personal belongings are covered against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage. However, renters insurance does not cover damage from flooding. Flood insurance is available for renters from FEMA’s National Flood Insurance Program.
Renters insurance includes additional living expenses (ALE) coverage. ALE pays for hotel bills, temporary rentals, restaurant meals and other expenses while a home is being repaired or rebuilt.
Like a standard homeowners insurance policy, renters insurance includes liability protection.
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