CHICAGO 2011: RENTERS INSURANCE ON THE RISE; AS RENTAL MARKET SURGES

The Chicago Tribune published an excellent article on the recent increase in renters insurance policies.  During the last few years many homeowners have opted to rent housing versus buying, for multiple reasons.

In the past, many renters had minimal furnishings and a limited amount of electronics, so they had less risk without insurance.  But in today’s market many renters have more expensive items and a higher level of equipment, including iPad’s, iPhone’s, Plasma TV’s, and computers.  As they move from single-family homes to condos or from owning a house to renting one, this creates more demand for renter’s insurance.

The spokesman for Allstate Insurance, Raliegh Floyd, confirmed what most now know to be true in this market.  During an interview he stated; “Multiple trends are probably fueling this.  Apartment vacancy rates are trending downward, more apartment complexes are requiring insurance, and homeowners forced out of their homes have more stuff to insure.  Former homeowners also skew older, so there is more appreciation for the need to insure their things.”

As the rental market continues to heat up, and many more people are in search for the perfect rental, we can expect to see continued growth in renters insurance policies.  If you currently do not have one, it is a practical thing to consider, especially since costs are reasonable.  But like with anything else…will supply and demand cause insurance policy costs to rise?  Only time will tell.

While we know the rents are continuing to climb, it may be time to consider buying a home.