Although data from the U.S. Census Bureau shows that more adults ages 24 to 34 are renting than ever before, increasing by more than a million from 2006 to 2011, most millennials do not have renters’ insurance.
A survey by Nationwide Insurance revealed that despite renting in unprecedented numbers, 56% of millennials do not have renters’ insurance, and 75% are unaware that they can get monthly coverage at a relatively low cost.
“It’s clear that there’s a misconception among millennials about the importance of renters insurance and how much it really costs,” said Matt Jauchius, Nationwide’s chief marketing officer. “For the $20 renters spend on items such as coffee and streaming video, they can get excellent coverage to help protect their belongings. Considering renters share many of the same risks as homeowners, it’s not only important; it’s a no-brainer.”
Survey respondents–more than 1,000 renters ages 23 to 35–said it would cost an estimated $5,000 to replace their belongings in the event of a catastrophe, but 40% do not see renters’ insurance as a necessity. With millennials being the largest demographic in America at 86 million (7% larger than the baby boomer generation), a large population of renters have a significant amount to lose from being uninsured.
The 52% of renters who do have renters’ insurance said they purchased policies to feel more protected. According to the survey, renters’ biggest fears are fire and theft, at 41% and 31% respectively.
Although 24% of renters said they would save their laptop computer before anything else, 40% did not know that renters’ insurance may cover stolen property. One in three renters did not believe that party mishaps could be covered by renters insurance, which can cover accidents such as an injured party guest or a damaged laptop.
Because of the many misconceptions about renters’ insurance, agents have an opportunity to educate clients about its benefits. Insurance professionals have provided the following tips for talking about the benefits of renters’ insurance with clients:
- A secondary risk of not having renters’ insurance is not knowing how much your belongings are worth. Tenants without renter’s insurance were significantly more likely to not know the value of all their possessions. Renters should consider creating a home inventory to track valuable possessions. Not only will this help renters realize the value of their possessions, but creating an inventory is also helpful in determining how much coverage they may need.
- According to Nationwide’s survey, many renters do not know what’s covered with renters’ insurance. In fact, 40% of renters surveyed don’t know that renters insurance may cover their stolen property. Explain what perils are covered and not covered by a renters’ insurance policy.
- The survey revealed that renters who currently have insurance purchased coverage because they want to feel protected. Explain other benefits a policy provides, such as paying for living expenses should a disaster prevents a renter from living in their apartment.
- There are misconceptions about how much renters’ insurance costs, and what it actually covers. Work with renters to determine if they are eligible for any policy discounts.
- According to the Nationwide survey, 68% of all young adult renters said it would cost most more than an estimated $5,000 to replace their belongings should an unfortunate event occur. Provide options for additional coverage that a customer may need, including an umbrella liability policy or an additional endorsement to cover items like jewelry, sporting equipment or collectables that are not covered by a traditional renters’ insurance policy.