The U.S. renter population includes people from all income levels, but the most recent data from the U.S. Census Bureau shows that the annual increase in the number of high-income renter-occupied 
households (defined as those earning $150,000 or more) has been faster than owner-occupied households. From 2007 to 2017, the number of those rich enough to own, but rather rent grew by 175 percent. Yet, the number of insurance policies for renters has not kept up.
Despite favorable conditions, the percentage of those holding a renter’s insurance policy was around 46 percent in the third quarter of 2018, while homeowners policies were at 64.4 percent—the average homeowners insurance premium rose by 1.6 percent in 2016, following a 3.6 percent increase in 2015, while the average renter’s insurance premium fell 1.6 percent in 2016 after dropping 1.1 percent in 2015.
If you or someone you know rents without having renter’s insurance, but wish to invest in protecting your belongings, consider the following:
- Pick the right coverage amount—list all your belongings and determine their material value. Add to that the fact that renter’s insurance also provides liability coverage (your protection in case someone gets injured or their property is damaged at your home. Renters insurance limits range from $100,000 to $500,000, so make sure you choose the right amount for you.
- Save money by bundling insurance policies—insurance companies usually offer (big) discounts when you purchase several insurance policies from them, so this is something you shouldn’t overlook. If you own a car, for instance, you certainly have a car insurance policy. Ask your car insurance company whether they also offer renters insurance and what rates they have. The typical discounts range from 10 to 20 percent.
- Research what is covered and what isn’t—when purchasing a renter’s insurance policy, ask yourself which the biggest risks in your case are: fire, flood, theft, earthquake or something else. Know that many insurance policies to not offer coverage in case of earthquakes or floods. Therefore, if you live in an area prone to these risks, consider buying an additional insurance to keep yourself protected. In other words, before you pay for a policy, ask for a detailed explanation of what is covered and what is not.
- Think twice about your deductible—this is the amount of money you need to pay out of your pockets when you file a claim to receive money from insurance. depending on your policy and your insurance company, it can be anywhere between $200 and $1,000. Going for the higher deductible could prove beneficial on the long run as the higher your deductible, the lower your monthly premiums will be. However, if you opt for this strategy, make sure you have that money ready in an emergency fund in case you need it.
- Think thrice about coverage types—there are two types of policies that you need to choose from: replacement value policy and cash value policy. The first one pays the claim based on what your belongings would cost if they were bought at the time of the accident. Thus, premiums for this policy will be higher. The cash value policy accounts the depreciation in the value of your belongings when determining value, thus your premiums for this case will be lower.
