"Multiple trends are probably fueling this," said Raleigh Floyd, a spokesman for Allstate Insurance Co. "Apartment vacancy rates are trending downward, more apartment complexes are requiring insurance, and homeowners forced out of their homes have more stuff to insure. Former homeowners also skew older, so there is more appreciation for the need to insure their things."
"Renter's insurance is becoming increasingly more relevant to today's renter," added Sedrik Newbern, an insurance agent in Libertyville.
Although relatively inexpensive, a basic renters policy may begin at $8 to $9 a month or about $100 a year — only 43 percent of renters had insurance in 2006, according to a study by the Insurance Research Council. An Allstate study of California in 2008 found less than 40 percent were insured.
The usual explanation for such a low figure — compared with 96 percent of homeowners with personal property and liability protection — is that most renters are budget-strapped young people willing to take a risk and often misinformed about who pays when a problem arises.
"Often the traditional worker doesn't wonder what it will cost to replace their clothes so they can go to work or school if there is a fire or theft in their apartment, or the at-home designer whose laptop is stolen by a roommate," said Margolis, MK Asset Management owner.
But with the collapse of the housing market, the traditional renter demographic is changing. Today's renter is as likely to be an affluent young professional or a mature wage earner as a struggling college graduate.
But with the collapse of the housing market, the traditional renter demographic is changing. Today's renter is as likely to be an affluent young professional or a mature wage earner as a struggling college graduate.
Additionally, renters are living longer in apartments and aren't sure about purchasing/buying homes. They typically often have more stuff, and more expensive stuff at that, so insuring it is all the more important. At the same time, property owners and landlords are wising up and do not want to get caught in the middle of an expensive claims issue, and are offering or requiring renters insurance from their tenants.
A survey last year for The National Multi Housing Council, a national association representing the interests of larger apartment companies, indicated that 66 percent of the 45 participating companies required residents to have renters insurance in 2010. That was up from 44 percent in 2009 and was a big leap from 24 percent in 2008. The companies represented a total of 750,000 apartments.
A survey last year for The National Multi Housing Council, a national association representing the interests of larger apartment companies, indicated that 66 percent of the 45 participating companies required residents to have renters insurance in 2010. That was up from 44 percent in 2009 and was a big leap from 24 percent in 2008. The companies represented a total of 750,000 apartments.
Typically, insurance bought by an apartment landlord covers only the repairs of a building should a fire occur or if there is damage caused by a thunder storm. Property insurance, however, doesn't cover the costs of belongings damaged in those instances, even if the fire or water damaged those belongings. Those belongings are strictly the renter's responsibility, and renters insurance is the answer. Particularly, making renters insurance mandatory when signing a lease is a way for landlords to minimize their responsibility and protect themselves should there be a dispute about who is responsible for damaged or lost belongings.
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