Renters' Insurance: Over Half of Millennials Don't Realize They Need It
NEW YORK ( MainStreet) There is no way to predict when natural disasters like Hurricane Sandy will sweep across New York City neighborhoods or when another Hurricane Katrina will destroy your cozy nest, but even if the same nightmare happened again, it wouldn't be the end of the world if your property is insured.
For most 20-somethings who rent tiny prewar-walkups and find homeownership increasingly out of reach , the maneuver that can reduce the pain of losing their personal properties is known as renters' insurance . Unfortunately, a recent Nationwide Mutual Insurance Company study conducted by Harris Interactive found that more than half of Millennials don't have renters' insurance and, in turn, leave their belongings and wallets at risk.
The online survey, which interviewed more than 1,280 renters across the United States aged from 23 to 35 years old, showed that 56% of Millennials are not covered by renters' insurance.
Unlike the more widespread awareness for homeowner's insurance or auto insurance , renters' insurance is unrecognized by Millennials who often overlook the value of their home items and personal belongings until incidents like theft happen.
"A lot of people don't know that if they don't own a house, they don't [automatically] get insured," says Joshua Duvall, an independent insurance specialist at Capital Financial Services, LLC., based in New York.
Fan Wu, a recent master's graduate whose apartment in Queens, N.Y. got hit with a break-in during the summer of 2013 , found out the hard way about the perils of being an uninsured renter.
"The police came and asked me if I had renters' insurance, but I didn't," she told MainStreet. That was the first time she heard about such a thing as renters' insurance. Similar to Wu, many Millennials not only lack of the awareness of renters' insurance, but also have little knowledge about the cost of the renters' insurance. Nationwide's study released data showing that 75% of uninsured Millennials don't realize how much coverage they can get for a monthly pittance.
According to National Association Insurance Committee, monthly coverage rates of renters' insurance average is between $15 and $30 depending on the location and size of the rental unit and the policyholder's possessions.
"Renters' insurance is so inexpensive -- every single person should have [a policy]," says Duvall.
Wu could have minimized her loss for the minimal cost of a pair of movie tickets per month, yet the 26-year-old wasn't insured for her items worth approximately $5,000, including a laptop, several luxury brand handbags, a digital camera and jewelry (with a ring from Tiffany's).
"If she was covered by a policy that has a deductible of $500 [per year], she would be able to replace up to $4,500 from her claim with the insurance company," Duvall estimated.