If you currently rent the place you live in, you are in increasingly good company. More and more individuals are responding to today's uncertain economic climate by renting rather than owning real estate.

The same future uncertainty is a prime reason to purchase renter's insurance, a step that a surprisingly small number of renters choose to take. A 2012 poll by the Insurance Information Institute found that only 31 percent of renters insured their rental units, while 96 percent of those who own homes choose to cover their property with a homeowner's policy.  The difference in coverage isn't justified by a decrease in risk. For example, statistics from the Insurance Information Institute reveal that renters are 50% more likely to be victims of burglaries than homeowners.

Many renters assume that their landlord's insurance policy protects the contents of their condo or apartment. They often learn the truth only after it's too late to save their lost belongings, none of which are protected by typical landlord policies that cover damage to the building alone.

Today's marketplace is making insurance coverage a necessity rather than an option for an increasingly large number of renters. In many tight rental markets, good apartments are getting harder to find. As a result, more landlords are requiring renter's insurance as a condition of signing a lease. A nationwide survey by the National Multi Housing Council revealed that 66% of landlords surveyed required a policy before moving in, a big increase over 44% in 2009 and only 24% in 2008.

Coverage can cost as little as $100 per year and rarely tops $300 annually, which is a fraction of the price of an average homeowner's policy. Coverage can be inexpensively configured to cover most of the major risks a renter may experience.

  • Loss of personal property:  A typical apartment commonly contains $10,000-$30,000 in personal possessions. Renters may also have invested money to paint apartment walls, add cabinets or improve lighting fixtures. For as little as $1 per day, renters can have their personal belongings and liability covered. Additionally, family heirlooms, expensive jewelry or collectibles can also be protected by an additional rider at a modest extra cost.
  • Personal liability:  Slips, falls and unforeseen accidents can lead to surprisingly large out-of-pocket costs or damaging lawsuits. A good rental policy covers the costs of emergency care and long term liability.
  • Emergency living expenses:  If a fire or storm makes a living space uninhabitable, many renters' policies will pay for hotel and restaurant bills until repairs are made.

Some landlords make things easier by adding a rental insurance option to their leasing packages.  When calling for quotes, ask about lower rates for units with security systems, smoke detectors, deadbolt locks and other safety devices. Multi-policy discounts may also be available if you insure your car and home with the same company. Senior savings could be a possibility for renters age 55+. If you are sharing a rental with a roommate, ask whether the insurer will allow you to split the cost of the premium.

The best way to further explore the options in renter's insurance is a call or visit to your local HUB broker. Their knowledge can help you sift through the options to find a policy that maximizes your peace of mind, while making the most of the freedom and flexibility a renter's lifestyle can bring.