Many renters not as insured as they think, agents say

By Josh Kastrinsky | jkastrin@reportert.com
Saturday July 22, 2006

MARTINSVILLE

Tenants of houses and apartments may think their landlords insurance covers their possessions, but they may not have any of their items insured, and could lose them all to damage or theft.

Renters insurance, which covers tenants personal property from damage or theft, is an overlooked necessity for renters, Eric Kersey of Avery Insurance said.

In the United States, 35 million homes are rented, or about 31 percent of all American households, according to the National Multi Housing Council. Results from a May study by research company International Communications Research found that, while 89 percent of respondents own one or more valuable electronic items, two-thirds of families that rent lack renters coverage.

In some larger cities and college towns, many landlords prefer tenants have personal coverage, he said. A landlords insurance covers the building in case of damage, but items inside are not covered.

Renters insurance isnt just important for covering property, he said. Liability is the most important aspect of renters insurance. Liability insurance pays damages if someone else is hurt while visiting your apartment.

If college students have a fire in their dorm rooms, they are sometimes covered under an extension of their parents homeowners insurance, Kersey said. When young people move from under their parents coverage, they are often unaware that they need separate renters insurance.

Homeowners have a broad canopy of coverage under homeowners insurance plans but renters dont face a similar situation, he said. Many renters arent concerned because they dont own much property, but renters insurance covers both furnished apartments and personal property.

Say you buy a $3,500 entertainment center, Kersey said. You have some buddies over for a Super Bowl party, and you come back a week later, and its gone; your buddy stole it. Good buddy.

If renters are uninsured, landlords will pay for damage done to a rental property up front, but the landlords insurance company can then charge the tenant for the insurance claim. If the landlord is responsible for the damage, however, such as with faulty wiring, the tenant faces no charges.

People just dont think about it, Kersey said. Some think the landlord is responsible (for property), when it couldnt be further from the truth.

Lena Moscrip from State Farm Insurance in Martinsville said she estimates 30 percent, at most, of renters are covered by renters insurance. For renters who move often, State Farm adjusts renters insurance policies depending on the age and condition of the rental property, a process Moscrip said is not complicated.

Recently, she said, a renters property was destroyed in a house fire. The property was insured by the landlord, but the renters could not recover their items because they lacked renters insurance, she said.

With younger renters especially, she said, its important to have a policy early on to develop time-enforced credit, which helps the transition from insuring a rental property to a first home.