has found that the uneven distribution of insurance coverage tends to leave low-income households lacking policies, especially in states that have experienced the greatest losses due to climate disaster.
Asked why they choose not to purchase renters insurance, more than one in three polled said the cost was “too expensive” and they felt they had “no need for it,” States with higher-than-average annual losses include California, Florida, Louisiana, Texas, and Washington, according to the Financial Health Network. The losses are incurred by flooding, hurricanes, landslides, and wildfires, among other unusual weather events, such as tornadoes.
Following a disaster, renters are not responsible for financing repairs to the building where they live, but still need to replace or repair belongings that are damaged or destroyed. As renters typically have lower incomes, less wealth, and lower financial health than homeowners, the difficulties have a compounding effect.
Insurance companies make this distinction between the kinds of compensation a policyholder receives after losses. Essentially: Would you prefer to receive the dollar value of what you own , or the cost of replacing it ? If you opt for the “replacement cost,” you’ll pay a higher monthly premium.— Personal property protection. If your belongings are stolen or destroyed, the insurance company pays .