Every day there’s another new revelation about millennials and renting. Some say millennials are more prone to rental properties instead of purchasing their property because of crippling debt. And some say rent in cities that Millennials love, like Chicago for example, is so expensive that they can’t save any money. Others believe their need for frivolous items takes precedence over a down payment on a house. No matter what the case is, the reality is that over half of that age demographic is renting. More shockingly, a survey by Princeton Survey Research Associates International reported that 66% of millennials rent their homes and of that subset, 70% don’t have renters insurance. Of that 70% with no insurance, 41% admitted to not knowing how it works!
It’s evident that insurance companies are not doing a good enough job targeting millennials as buyers, and explaining the importance of renters insurance. So if you’re a part of that 41%, read on – this is our millennials guide to picking the right renters insurance.
Renters Insurance 101
Renters insurance will cover lost or stolen property and will give you personal liability coverage, which protects you if you’re responsible for an accident or damage another person’s property. However, it does not cover accidental damage or breakage. So, if your water pipes break and ruin your Casper bed, you’re covered. It also protects you from liability if you start a fire while making avocado toast that spreads into another apartment. But if you spill your small batch IPA ruining your friend’s smartphone, you’re out of luck. Renters insurance will save you from crippling debt if the unexpected happens.
Renters insurance also comes in handy if you find yourself without a place to live due to fire or a storm. They will pay for you to live in a hotel, or find other accommodations during the time it takes to repair your space.
How Much Renters Insurance Should You Have?
In the United States, renters insurance is usually split into four sections: personal property damage coverage, personal liability coverage, medical payment coverage and loss of use coverage. When choosing insurance, you will have to decide on coverage amounts for three of these areas.
For personal property, the easiest way to do this is to create an itemized list of your belongings and the amount it would cost if you needed to replace it. You’ll be surprised at how much your stuff is worth!
For personal liability coverage, research estimates of legal counsel in your area and consider the costs of liability claims if one were ever to happen.
Similarly, medical payment coverage should be averaged in the same way.
Choose The Insurance That Covers Your Needs
Don’t be fooled by the name “rental insurance,” there are a lot of plans that will cover you and your belongings even when you’re on vacation. Be vocal about asking about the added benefits and perks of the plan, and choose the best renters insurance company that is the most beneficial for your lifestyle.
For items that are more valuable like jewelry, art pieces or collectables, there may be a value limit within basic insurance plans. Additional coverage called riders may be needed for individual items to cover any damages that may occur. When shopping for insurance policies, don’t simply assume all is included. Bring in a list of valuables and situations you would ideally want to be covered for, and confirm that they will be or find out what additional insurance you’ll need.
Tax Deductible Renters Insurance
Another thing to keep in mind is that if you’re working from home, part of your insurance costs may be tax deductible. While many millennials are embracing the remote work movement, this can come in very handy. If you’re using a part of your home to operate a business exclusively – you can deduct a portion of your insurance based on the size of the area.
Simply put, you don’t want to overestimate your coverage level and pay for what you don’t need. However, you don’t want to underestimate and end up in a dangerous place if you have a significant loss. Companies like Clearsurance empower consumers by giving them a transparent, unbiased look at insurance providers through crowd-sourced reviews. Services like this are perfect for millennials who are looking to purchase renters insurance for the first time as they are not just listing the best price, they’re providing consumers with real life ‘trust-scores’ and experiences with the insurance providers.