As Californians Are Forced to Rent, Rental Insurance Could See and Uptick

LOS ANGELES August 11 (BestWire) -

California Insurance Commissioner Steve Poizner recently noted an interesting statistic about the state's population. As many Californians lose their homes to foreclosure, they are forced to rent. In fact, about 40% of the state's residents rent - about one-third more than the national average, he said.

California has one of the highest rates of foreclosure, with filings reported on 202,599 California properties during the second quarter, according RealtyTrac, an online marketplace for foreclosure properties. The filings are the highest total among the states and a rate of one in every 65 households.

JoAnn Tigue, vice president of California Insurance Specialists, said there could be some spike in renters insurance now that more people are renting because many apartment buildings and condominium associations are requiring renters to take out the insurance.

"It would stand to reason that we would see some increase," Tigue said.

"People are also renting homes and they are more likely to get insurance in that case as well. Those who have lost their homes typically have more things and a better reason to insure them."

Rental insurance rates in California have declined as much as 10%, said Steve Brooks, owner of Steve Brooks Insurance Services in Westlake Village, Calif.

"Because there are more renters, there is more demand and California is a very competitive market," he said.

Tully Lehman, spokesman for the Insurance Information Network of California said that despite the fact that renters insurance is inexpensive, many people unfortunately "think of it as a superfluous expense." An Insurance Research Council poll found that 43% of renters had insurance.

Member companies Lehman spoke to said they are "open for business" to write renters insurance to protect residents against the risks that surround them. Other than the damage to one's property that can be caused by disasters in neighboring units, rented households are burglarized at a rate of about 50% higher than owned households, according to U.S. Bureau of Justice Statistics.

Darrel Ng, spokesman for the California Department of Insurance, said the department "would anticipate insurers will see some increase" in renters insurance but said it's too early to see specific trends.