Illinois Residents Face More Property Loss Risk

As the number of Illinois residents renting homes dramatically increases with the current housing foreclosure crisis, a new survey released by Allstate finds most Illinois renters are inadequately prepared to protect homes and belongings.

While homeowners coverage is required as a part of most mortgages, the approximate 1.2 million Illinois residents who rent their homes face no such insurance requirement. Without that requirement, just over half of Illinois renters (51 percent) acknowledged they have renters insurance to cover their property in case of loss, compared to just 40 percent of national survey respondents.

The share of rental households in the U.S. jumped by about 1 million in 2007 and this group is likely to expand further if foreclosure trends continue, according to Harvard University’s Joint Center for Housing Studies. With no relief in sight for the housing market, it is critical for renters to be prepared to protect their homes and possessions in case of a loss.

Allstate’s survey also found that about seven out of 10 (71 percent) Illinois renters say they have not done a home inventory check list, or tried to estimate the cost of replacing everything in their home in the past year or two. Without home inventory check lists, renters in Illinois may face challenges when filing a claim to replace stolen or damaged property, possibly delaying payment from their insurance provider. Just one in five Illinois renters say they have taken photographs or videotaped their possessions during the past two years to help document what they own.

The survey found most renters in Illinois underestimate the threat theft poses to their belongings. More than half (58 percent) of the renters surveyed estimated the number of burglaries and other property crimes in Illinois at less than 100,000, while the actual number of burglaries alone was more than half that. According to the FBI’s most recent Uniform Crime Report, there were about 77,000 burglaries in Illinois in 2006. Only 15 percent of renters guessed the number was roughly in this range.

According to the survey, and similar to the national findings, the biggest reasons renters in Illinois don’t purchase renters insurance are: 1) they haven’t made the time to look into it (41 percent) or 2) they believe the coverage is too expensive (35 percent).

Misperceptions about the price of renters insurance were particularly telling. About one in five (17 percent) of Illinois respondents thought renters insurance cost at least three times as much as its actual price tag of an average of $17 per month, and another 16 percent had no idea how much it cost. However, even at $17 per month, 66 percent thought the coverage was very worthwhile. In reality, if a renter were to lose all of their belongings such as furniture, clothing, electronics, a flat screen TV or an iPhone, this minimal investment could mean tens of thousands of dollars in savings to replace the entire contents of the individual’s home.

Additional Survey Stats

• Other reasons Illinois residents do not purchase renters insurance include not owning enough valuables to justify having the insurance (25 percent) and believing landlords are responsible for insuring renter’s personal property (11 percent).
• About half (49 percent) of Illinois renters say that if they could protect only one of several types of possessions from burglary or fire, they would choose personal items such as photographs or letters. Sixty-four percent of women say they would save photos and letters compared to 49 percent of men.