Renters Insurance Trends and Choices for 2024

While there are advantages to being a homeowner, the permanence and cost can be a negative for many. Renters can move more freely and more often than those who own their homes. This year’s economic and rental trends may also see more benefits for renters than in years past.

We highlight some of these trends below, including where to find the best renters insurance in 2024 to meet your unique needs.

Rental demand is down, creating a renter’s market

The rental market in 2023 has stabilized following a surge in post-pandemic costs and a rental shortage in many states, according to real estate experts ALM/GlobalSt. The market in 2024 could be even better for renters, as further softening in the market could force landlords to drop prices enough to attract tenants.

While that bodes well for renters, the Census Bureau’s most recent American Community Survey shows that more than 40 percent of renters spend at least 30 percent of their income on rent and utilities, a significant portion that can caused financial strain. A widely accepted rule of thumb is that 30% of household income is the most you should spend on rent, although new research shows that number is unrealistic for many Americans, especially those on lower incomes.

Fortunately, renters insurance is an affordable way to protect yourself and your belongings, costing an average of just $20 per month. Allstate is an excellent choice for renters insurance. It offers the cheapest policies in our analysis of rental car insurance companies and provides coverage in all 50 states at an average rate of less than $13 per month.

High mortgage rates and housing prices have made rent more affordable

The housing bust of 2007 was the last time it was cheaper to rent than to buy, according to CBRE data. The housing market has returned to this rarefied territory. A Redfin study earlier this year found that it’s cheaper to rent than to buy in all but four major metropolitan areas: Cleveland, Detroit, Houston and Philadelphia.

If you live in the West or Midwest and plan to own a home when it makes more financial sense, consider American Family for your renters insurance needs. It has earned an excellent rating for its homeowners insurance policies and makes it easy to transition from renters to home insurance when the time comes. It’s also affordable, averaging less than $17 per month for renters insurance coverage.

Hybrid and remote work options are becoming the norm

Nearly half (42%) of workers in America have jobs that allow them to telecommute to some degree, according to online housing firm Apartment List. Data from WFH Research from Q3 2023 shows that for those able to work from home, nearly 20% were fully remote, while more than 45% were hybrid (remote and in-person).

However, working from home increases the risk of identity theft and cyber attacks. Phishing scams accounted for the most significant breaches in the third quarter of 2022, according to the Identity Theft Resource Center’s 2022 Data Breach Report.

There were over 1.1 million identity thefts and 2.4 million fraud complaints in 2022, according to the Insurance Information Institute. It makes sense, then, that “the biggest trend in renters insurance right now is identity theft endorsements,” said John Scully, owner of Nationwide Insurance Agency in Millersville, Maryland. That same year, Nationwide was the second largest insurer in the identity theft insurance market. Nationwide also had the third lowest rates in our renters insurance survey and had excellent customer service scores, making them a great choice if you’re concerned about identity theft and protecting your property while renting.

Increase in renters in Sun Belt states

The Sun Belt (the bottom 15 states) has seen the biggest influx of renters recently, with Florida and Texas seeing large population increases that have flooded the market with renters.

While some areas have benefited from rising rents, many have responded by building new apartments to meet demand, according to the apartment listings. Florida, Texas and Utah are among the leaders in multifamily building permits per capita. As a result, rents in these areas are in decline.

While there may be a housing boom, coastal states are also seeing insurers pull back as the potential for natural disasters and climate-related severe weather poses too much risk. When an insurance company no longer offers home insurance policies in a state, the insurer may also stop writing renters insurance policies.

If you currently live in or plan to move to a Sun Belt state and are concerned about your renters insurance company options, consider Chubb. Chubb is available in all 50 states, uses local agents, and has an excellent customer service track record.

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