Renters insurance isn't often on radar for millennials

Survey: Less than half have such coverage

5/16/2014

Despite the fact that millennials, the 23 to 35-year-old age group, are renting in unprecedented numbers, 56 percent do not have renters insurance, according to a survey commissioned by Nationwide Insurance.

Renters insurance might be the most underappreciated form of personal property insurance.

“It’s clear that there’s a misconception among millennials about the importance of renters insurance and how much it really costs,” said Mark Hara, vice president of marketing for Nationwide in Columbus.

The average monthly premium for a renters policy with Nationwide runs between $15 and $20 for up to $100,000 in coverage.

Since 2008, Nationwide said it has paid more than $184 million in renters insurance claims, averaging nearly $4,000 per claim.

How much insurance one should carry for personal property comes down largely to what one owns.

With cars, the insurer simply looks up a vehicle’s value and assigns it to the policy. In fact, auto policies typically don’t even state the amount of coverage for a vehicle — just the deductible.

A homeowner, on the other hand, might determine the amount of money it would require to rebuild the home if it were destroyed — and it takes more expertise to get that right.

“Most homeowners pay more attention to auto insurance than home insurance,” said Robert Large, vice president of Pacific Specialty Insurance Co. in Menlo Park, Calif. “It’s understandable because auto insurers bombard consumers with TV advertising.

“Additionally, because most families have two or more cars, most spend more on car insurance compared to the typical home insurance policy.”

“We like to teach our customers to be better risk managers,” he said. “Losing a car will cause some pain, but you wouldn’t be financially ruined as you would if the house was destroyed and wasn’t properly insured.”

Mr. Large said with a homeowners policy, there are several factors to consider when deciding the amount of coverage needed.

“The insurer should compare survey cost estimates with actual claim payments,” he said. “Also important is ‘guaranteed replacement cost,’ which comes standard in better policies. That assures there will be enough money to rebuild the house even if the cost exceeds the home insurance amount.”

A homeowners policy will protect the whole home, including the structure, contents, and the people inside. Renters insurance protects the value of the contents of the dwelling and covers injuries.

Both homeowners and renters policies also protect possessions if they are stolen, although neither extend to losses related to motor vehicles.

Most standard policies have limits for certain valuable possessions — such as jewelry, antiques, silverware, furs, or fine art — which need a so-called personal property insurance endorsement, or floater, to be included in coverage.

The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Tim Grant is a reporter for the Post-Gazette.

Contact him at: tgrant@post-gazette.com or 412-263-1591.