By David Colmans

With more and more families losing their homes to sub-prime mortgage rate hikes and the number of job losses in this weak economy, there are more and more renters.

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.

Some years ago, my wife and I sold our home and had to move quickly for the new owners. We couldn’t find a house to purchase in time for the move, so we rented an apartment and placed some items in storage. It was 13 months before we moved into our new home.

During the time we were renters we converted our homeowners insurance to a renters’ policy. In an apartment complex, or any rental unit for that matter, the owner of the property has insurance to rebuild in case of a fire or other disaster, but the renters have no coverage for their belongings unless they obtain a renters’ policy from their insurer.

The renters’ insurance policy we obtained covered not only our belongings in the apartment, but our things in the storage facility as well. It also provided liability insurance, as does homeowners, so if someone was injured in our apartment, or if we had a pet and our pet bit someone, the liability coverage would protect us financially from a lawsuit.

A recent survey by Allstate found that although Georgia renters are above the national average in purchasing renters insurance, almost half have inadequate coverage for their belongings.

Of the approximate one million Georgia residents who rent their homes, 52 percent acknowledged they have renters insurance to cover their property in case of loss, compared to just 40 percent of national survey respondents.

According to the survey, and similar to the national findings, renters in Georgia don’t purchase renters insurance because:

— they haven’t made the time to look into it (53 percent)

— they believe the coverage is too expensive (33 percent)

— they don’t think they own enough valuables to justify having the insurance (14 percent)

— they believe landlords are responsible for insuring renter’s personal property (7 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.

Renters’ insurance is much less expensive than homeowners because there is no building at risk, only the personal contents of the family and the liability coverage limits.

There are other financial benefits that include the possibility of a multi-policy discount from your insurer if you have other policies with the company such as auto coverage.

See more about renters insurance on the Georgia Insurance Information Service Web site home page: http://www.giis.org.

David Colmans is executive director of the Georgia Insurance Information Service. Contact him at 770-565-3806 or by e-mail at dcolmans@giis.org.

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