Renters Insurance Remains A Tough Sell

Insurance agents appear to have made no progress in getting more renters to purchase personal property insurance to protect their valuables according to a survey.

The poll was conducted by Trusted Choice, the independent agent branding initiative of the Independent Insurance Agents & Brokers of America.

According to their survey, 67 percent of U.S. families lack rental insurance to provide property and liability coverage for themselves and their families. The results were similar to a 2003 survey released by the IIABA where 64 percent of those surveyed said they had no insurance (See NU, Sept. 19, 2003).

According to the National Multi Housing Council, which Trusted Choice cites, there were 35 million households renting homes in 2005, about 31 percent of all Americans. That translates into 25 million households in the U.S. who are going without rental insurance, Trusted Choice said.

The telephone survey was done by Media, Pa.-based ICR, an independent research company. ICR contacted 2,030 adults from May 5 to 18. The survey has an error rate of plus or minus 2.2 percentage points.

Among those respondents who said they don't have rental insurance, 26 percent said the coverage was too expensive, and 17 percent said they didn't know they needed it. An additional 8 percent said they had never heard of it.

Madelyn Flannagan, spokeswoman for Trusted Choice, said in a statement that coverage for renters is widely available and affordable in most parts of the country, with the average annual premium about $20 per month for about $20,000 of property coverage and $500,000 of liability coverage.

The Trusted Choice survey found that 89 percent of all renters own one or more valuable electronic devices, such as digital recorder devices, desktop and laptop computers, digital and video cameras and home theater systems. More than half of renters, 53 percent, said they own exercise and/or sports equipment such as a bicycle, exercise equipment or skis.

Both groups of owners–electronic devices and exercise equipment–are slightly more likely to own renter's insurance than non-owners.

Half of all renters own pets, Trusted Choice said, and these tenants face increased liability exposure, especially with dogs or exotic pets. However, renters with pets are less likely to be insured. Only 26 percent of pet owners purchased renters insurance as opposed to 32 percent of non-pet owners.

For entrepreneurs operating a business out of a rented home, the percentage of insured is not much higher. Only 31 percent of those operating a business out of their condo, apartment or other rental property had rental insurance. Only 5 percent of renters surveyed said they own an at-home business.

For the college student heading to school in the fall, not obtaining rental insurance could put the student's family at risk, Trusted Choice said. While homeowners' coverage typically extends to students living in campus dormitories, coverage applications for off-campus housing are vague and could mean unforeseen liability issues that would be best addressed with a student's own rental coverage.