Wednesday, July 23, 2008

As the number of Americans renting homes dramatically increases with the current housing foreclosure crisis, a new survey released today by Allstate finds most Georgia renters are inadequately prepared to protect homes and belongings. 

While homeowners coverage is required as a part of most mortgages, the approximate one million Georgia residents who rent their homes face no such insurance requirement. Without that requirement, 52 percent of Georgia renters acknowledged they have renters insurance to cover their property in case of loss, compared to just 40 percent of national survey respondents.

The share of rental households in the U.S. jumped by about 1 million in 2007 and this group is likely to expand further if foreclosure trends continue, according to Harvard University’s Joint Center for Housing Studies. With no relief in sight for the housing market, it is critical for renters to be prepared to protect their homes and possessions in case of a loss.

Allstate’s survey also found that about sixty-one percent of Georgia renters say they have not done a home inventory check list, or tried to estimate the cost of replacing everything in their home in the past year or two. Without home inventory check lists, renters in Georgia may face challenges when filing a claim to replace stolen or damaged property, possibly delaying payment from their insurance provider. Fewer than one in four Georgia renters (21 percent) say they have taken photographs or videotaped their possessions during the past two years to help document what they own.

The survey found most renters in Georgia underestimate the threat theft poses to their belongings. More than half (53 percent) of the renters surveyed estimated the number of burglaries and other property crimes in Georgia at less than 100,000, while the actual number of burglaries alone was over half that. According to the FBI’s most recent Uniform Crime Report, there were about 85,000 burglaries in Georgia in 2006. Only 11 percent of renters guessed the number was roughly in this range.

“According to the survey, and similar to the national findings, the biggest reasons renters in Georgia don’t purchase renters insurance are: 1) they haven’t made the time to look into it (53 percent) or 2) they believe the coverage is too expensive (33 percent).

Misperceptions about the price of renters insurance were particularly telling. One in five of Georgia respondents thought renters insurance cost at least three times as much as its actual price tag of an average of $15 per month, and another 12 percent had no idea how much it cost. However, even at $21 per month, the average cost of renters insurance in Georgia, 63 percent thought the coverage was very worthwhile. In reality, if a renter were to lose all of their belongings such as furniture, clothing, electronics, a flat screen TV or an iPhone, this minimal investment could mean tens of thousands of dollars in savings to replace the entire contents of the individual’s home.

Additional Survey Stats

·       Other reasons Georgia residents do not purchase renters insurance include not owning enough valuables to justify having the insurance (14 percent) and believing landlords are responsible for insuring renter’s personal property (7 percent).

·       Fifty-three percent of Georgia renters say that if they could protect only one of several types of possessions from burglary or fire, they would choose personal items such as photographs or letters. Sixty percent of women say they would save photos and letters compared to 46 percent of men.

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