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Renters Insurance Just Not Catching On

Over the past decade, a dangerous and costly trend has developed among renters: not buying insurance. Because renters insurance is not mandatory, many choose to go without it - predominantly, younger generations.

An Insurance Information Institution poll found that only 37 percent of renters in the U.S. have renters insurance, according to the Insurance Journal. That's a 6 percent decline since 2006, with the number of insured expected to continue falling.

Even though renters insurance is relatively cheap, the problem lies in the fact that millennials generally don't have a good impression of the insurance industry. Millennials have the lowest satisfaction rate with renters insurance out of any age group, according to a J.D. Power survey in MainSt.

"Insurers in one or all of these product categories need to pay very close attention to Millennials and adapt their business model to meet the needs of this large segment, which often involves evaluating the usability of their website and finding new ways to communicate with customers, such as through the use of email, apps and online chat," said Valerie Monet, director at J.D. Power, according to MainSt.

While insurance companies can certainly do more to reach out toward young people, a large part of the hesitance is that millennials are apathetic about the system and don't know just how cheap renters insurance can be. Most renters don't pay more than $20 a month for insurance, with some even paying as little as $10, according to the Insurance Journal.

Why it's needed

Renters insurance isn't just another bill you have to pay. In fact, it's a safety and precaution measure that can save you money.

Just because you have signed a lease and your building is covered by an insurance policy, that doesn't mean that your specific unit is covered as well. A separate plan has to be taken out to insure your personal belongings.

Additionally, renters insurance can help cover the costs of finding a new place if your apartment burns down. This can be a much-needed resource at a time when many people are left stranded and lack the requisite funds to make such a big move.

"A standard renters policy provides coverage for big-ticket personal items - such as furniture, computers and television sets - in the event they are destroyed," said New York Insurance Association President Ellen Melchionni, according to the Insurance Journal. "And, like homeowners insurance, renters insurance protects you from liability."

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