When it comes to owning a home, most millennials are opting to rent versus buy. While putting off a home purchase is mostly a result of tight credit conditions, high levels of student debt and a competitive housing market, most renters also aren't taking steps to protect their finances.
According to a recent report by Nationwide, most renters are underprepared when it comes to protecting their belongings with a renters insurance policy.. The data found that 56 percent of renters did not have a policy. Furthermore, 75 percent of those uninsured were unaware of how affordable a policy can be.
"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, chief marketing officer at Nationwide. "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."
Why you need renters insurance
There are many reasons all renters need an insurance policy to help cover the cost of their belongings if they were to become lost, damaged or destroyed. In the Nationwide survey, 40 percent of young renters between the ages of 23 and 25 said they didn't need coverage. However, most said it would cost them more than $5,000 to replace their belongings. Without coverage, most young renters would be left on their own to pay this expense. In the survey, those that said they did have coverage said they felt they were better protected.
Where to start
If you're new to renters insurance, the first place to start is by determining a value to all your possessions. This helps you make sure you get enough coverage in a policy to replace your belongings if they were to suddenly be lost. Once you have established the value of what you need to cover, you should spend time comparison shopping between policy providers. You will need a policy that can provide liability coverage in addition to personal property coverage. Your landlord most likely has a policy to cover the building if someone were to get injured on the property. However, this coverage typically doesn't extend into your apartment or rental home, and you could be liable without your own policy.
Most renters can find coverage for as little as $30 a month. To compare renters insurance quotes, visit CoverHound today.