With household incomes stagnating and banks remaining stingy with loans, the renter’s market is growing. Apartment living can provide a quality lifestyle and many amenities. While homeowners are protected by homeowner’s insurance policies, it is important for renters to protect their personal belongings with renter’s insurance.
The Red Cross encourages all renters to have renter’s insurance and to be prepared for disasters that can and do happen when they are least expected.
Procrastination can be costly
According to a recent survey by Apartments.com, approximately 60 percent of renters said they do not have renter’s insurance. Despite not having it, more than 70 percent of those without coverage said that renter’s insurance is important protection and would provide peace of mind.
A fire on February 17, 2014 at the Chapel Ridge Apartment Complex in West Little Rock, Arkansas left five children and eleven adults without housing. No one was injured in the fire, but residents had to evacuate their apartments quickly and their personal belongings were destroyed or damaged.
Red Cross helps
Brigette Williams is Communications Officer for the Arkansas American Red Cross. Brigette said, “When appropriate we’ll ask people, do you have renter’s insurance. We’ll hear everything, from you know, I was going to get it, I was going to get it in April, I thought about getting it but I was waiting until I moved.”
Many of the disasters that the Red Cross responds to are residential fires. Money Tips provides information and plans to prepare for and prevent these emergencies. The Red Cross believes people are in a much better position if they plan ahead with insurance.
Why people do not have insurance
One of the main reasons that renters put off or do not protect themselves with renter’s insurance is because they undervalue their belongings and feel they are not worth insuring. Renter’s insurance can cover more than just furniture, clothing, electronics, jewelry and other items. It can also provide for living expenses and lodging if your apartment is damaged or destroyed.
Another misconception many renters have is that they are not able to afford renter’s insurance. Brigette Williams of the Red Cross says, “I tell people, if you go to the movies on Friday night and buy popcorn, then you can invest in renter’s insurance.” Prices vary based on coverage type and company, but annual premiums for renters is typically less than they spend annually buying coffee at their favorite coffee house.
Others are confused about which type of insurance is best for them. There are different types available and renters can choose actual cash value or replacement value policies. Actual cash value policies cost less and take into consideration the age of items and wear and tear. Replacement cost policies will pay the entire cost to replace belongings and does not depreciate items for age.
Another consideration is the amount of deductible. A higher deductible can save as much as 25 percent. Credit history and loss history, as well as choosing the same company for renter’s insurance and auto insurance factor into the price individuals will pay for their insurance. It is best to consult with an insurance agent about the value of items to determine which policy will work best.