Rental Market Looks to Continue to Expand in the Coming Years

  

  

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Homeowners Buy Insurance, Renters Don't Bother, What Gives?

The robust rental housing market is expected to remain strong for the next 4-5 years, while homeownership rates will remain low. With unemployment levels remaining stubbornly high combined with other economic factors, consumers will continue to forgo purchasing a home and turn to renting instead. Changing demographics such as population trends and marital rates are expected to contribute to lower demand for homeownership as well. However, while homeowners with mortgages are forced by lenders into purchasing home insurance, with renters, there is no such “force factor.” Consequently, many renters don’t bother to get insurance.

There is a general lack of understanding of the features, benefits and costs of renters insurance. For example, the “additional living expenses” endorsement would come into play if an insured is forced out of their home because of a covered peril, and would cover the expenses incurred while temporarily living away from the home. It covers hotel bills, temporary rentals, restaurant meals and other living expenses incurred during the time the rental home is being rebuilt. Most renters don’t know this.

There are 5 misconceptions about renters insurance that could contribute to the general lack of knowledge about this type of insurance policy. (1) People think they are too expensive, when in reality they can be quite cheap, especially if the insured already has an auto insurance policy. (2) They think they are already covered under their landlord’s insurance policy, which isn’t true. If someone slips and falls in your apartment, you are the one liable for the damages, not the landlord. (3) People tend to think that the chances of a loss are so unlikely that insurance wouldn’t be worth the cost. (4) People don’t feel like investing the time, when in reality once you get in contact with an agent, getting a quote and starting a renters policy is relatively painless experience.  

The bottom line is that, for a number of reasons, people who rent typically forgo purchasing renters insurance, but in reality it is easy to acquire and very inexpensive. Please feel free to contact us if you would like more general information corning the costs and benefits of renters insurance.

Contact SIA - 781-893-3200