Hispanic Americans Vastly Underserved On Renters Insurance, Study Claims

Renters insurance may seem like a no-brainer to people who were born here and brought up in the culture. After all, living in an apartment usually means living around other people, and where there are other people, there is room for theft and dishonesty. One cannot be guaranteed that the neighbors next door are trustworthy and dependable, especially when most leases run six months to a year, and one might always be in the situation where they are having to get used to someone new.

But a new study shows that not everyone is so comfortable and familiar with renters insurance. In fact, the Hispanic population is greatly underserved in this regard. According to State Farm Insurance, only 29 percent of Hispanics who rent their homes report having renters insurance. Furthermore, among respondents without renters insurance more than one third (34 percent) said they had never heard of it. What’s worse, most assumed the costs for carrying renters insurance would be higher than it actually is, and believed that their property was worth much less than it was. As the study’s authors note, not having renters insurance could leave Hispanic families vulnerable to a financial catastrophe especially during this time of year.

The study consisted of more than 500 renters, and it was designed to gauge awareness and understanding of renters insurance within the Hispanic community. Results indicated that almost half (43 percent) of survey respondents without renters insurance thought they could not afford it. However, 88 percent overestimated what a typical policy for renters insurance costs in monthly premiums, “with over half thinking it costs $50 or more a month, when in many cases renters insurance can cost as little as $12 a month,” the report states.

“There seem to be some misconceptions when it comes to renters insurance,” said Stephanie Colegrove, Operations Vice President – Underwriting. “We want everyone to know that if their possessions are stolen during a break-in, or damaged by a fire or another covered loss, a renters insurance policy can help them replace their valuables.”

More than 50 percent of respondents also believed their belongings were worth less than $10,000, unaware of the fact that with personal belongings — including clothes, furniture and electronics — they would have to pay much more than that to replace. They appear to be thinking about their valuables in a sense of depreciation. In so doing, they’re undervaluing and under-protecting their possessions.

State Farm references a 2013 State of Hispanic Homeownership report that shows the number of Hispanic households has grown from 9.2 million in 2000 to 14.7 million in 2013, representing a growth rate of 60 percent with Hispanic households representing over half of all renters. With the Hispanic population in such a state of growth, these continued misconceptions regarding renters insurance will leave a lot of American renters vulnerable to catastrophe.

If your clients fall into the Hispanic population, you could be well-served in sitting down and having a discussion with them over the realities of renters insurance. Throughout much of the U.S., there may still be a communication barrier that is keeping the above information from sinking in. If you’re not well-versed in the Spanish language and/or you’re unsure of how to reach out to this important demographic, you may want to consider bringing someone on staff to help you make strides in your area.


In Summary

While there is a larger deficiency in the Hispanic population than there is throughout other demographics when it comes to renters insurance, it’s still not as widely adopted among renters as it should be. With the cost of a policy so small and the country so underserved, this is a product that presents a great opportunity for the enterprising agent.

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