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Gradually, renters insurance gains ground

Gradually, renters insurance gains ground

The Insurance Information Institute released a new report—PulsePoints: Home and Auto Insurance— that reflects the knowledge homeowners, renters, and drivers have about insurance versus what they should know about insurance policies.

Even though the most prized investment for the majority of Americans is their home, few of them understand how to protect it. From earthquakes to flooding to telematics and driverless autos, the report covers key insights to consumer views in a clear and engaging format.

“Our mission is to help people understand what insurance is and how it works,” said Robert Hartwig, president & economist at the Insurance Information Institute. “We hope that sharing our survey results will help enhance consumer understanding of the crucial role that insurance plays in financially protecting them against a wide range of disasters.”

On the renter’s side, the report shows that the percentage of Americans with renters insurance has been on the rise since the first time Pulse Survey conducted the questionnaire in 2011 when only 29 percent reported having the coverage. Now two out of five renters has renters insurance. The highest percentage was in the Midwest and the South, where 47 percent had renters insurance. Age-wise, it seems that older renters were more likely to have renters insurance: senior renters of 65 and older, 52 percent had renters insurance, while for younger renters the percentage fluctuated around 40 percent.

In what natural disasters are concerned, only one in five Americans said they take the necessary steps to protect their home from a natural disaster. From those who gave a negative answer to this type of improvement, fewer than half find the measure too expensive, while about a third didn’t know what steps they needed to take.

Every year, prior to the start of the hurricane season on June 1, scientists at the National Oceanic and Atmospheric Administration (NOAA), Colorado State University and other research organizations release forecasts for the upcoming hurricane season. 67 percent of residents in hurricane-prone areas who had listen to the forecasts would not make additional preparations if a worse-than-normal hurricane season were forecast and only one third said they would prepare accordingly.

Home inventories had a better year in 2015—52 percent of homeowners said they had an inventory of their possessions to help document losses in case of a disaster, this representing a 4 percent increase from a year ago. In the South (57 percent) and the Northeast (56 percent—up from 45 percent in 2014) home inventories were more popular than in the rest of the country.

The conclusions of the report suggest that even though there is progress in the level of education consumers have on the role of insurance and in mitigating risk, there is still plenty of work to be done.