As a rule of thumb, it is mostly true that the young rent and the old own. Nearly 79% of Americans 65 and older own their homes, according to the Census Bureau, and ownership climbs with age.
However, inside the renter pool, the numbers flip. More than half of renters, 53%, are now over 40, according to a recent TransUnion report. The median renter is 40 years old, has a household income of about $56,000 a year, and stays put for more than three years at a stretch.
Priced out of buying, a lot of people are renting well into middle age and beyond, and they are bringing a lifetime of belongings, cars, and liability to a policy that was designed for someone with significantly less wealth.
What do renters policies cover?
Many renters policies cap contents coverage at a level set for someone with much less to lose. Patrick Foy, senior director of strategic planning for TransUnion’s insurance business, notes that many contents policies insure only $50,000 to $100,000 of belongings. For a temporary studio apartment, that is adequate. For a household that has been accumulating for 30 years, it may fall well short.
The average renters policy runs about $171 a year, roughly $14 a month, according to the Insurance Information Institute.
Data from the National Association of Insurance Commissioners shows a typical low-cost policy covers around $35,000 in property, while raising the limit toward $100,000 pushes the premium closer to $432 a year. Cheap, relative to what it protects, but only if you have done the math on what you own.
One more line to check is whether your policy pays replacement cost or actual cash value. Replacement cost buys you a new couch. Actual cash value pays the depreciated worth of a 12-year-old couch, which is close to nothing.
Your landlord’s insurance rebuilds the walls — everything inside is on you. Insurify makes it easy to compare policies and find the best one for your circumstances.
Renters compile more assets
Older renters accumulate the way owners do. Foy points to what stacks up: a second car, a boat, an ATV, kids old enough to drive. Each is a policy, a risk, and a potential lawsuit, whether you own the walls around you or not.
The old assumption was that renting meant little worth insuring. That is what has changed. A long-term renter can be sitting on the same pile of vehicles, valuables, and liability exposure as a homeowner, and assuming coverage is optional because there is no mortgage attached is how people end up underprotected.
Insurers count on you being too busy to shop around for car insurance, too. But it takes minutes and costs you nothing to check.
Never too old to buy
Renting later does not always mean renting forever. The numbers from the National Association of Realtors describe buyers who are older, not absent: The typical first-time buyer is now 40, a record high.
The jump from tenant to owner rewrites your coverage overnight. The landlord’s policy that covered the structure becomes your problem. Contents coverage becomes dwelling coverage. The premium multiplies.
That is the moment to prepare for before it arrives, not the week you close. Anyone weighing a purchase in the next year or two can price homeowners coverage early, so the number is known rather than a closing-day surprise.
If you are already a homeowner, take 10 minutes today to reduce your home insurance. Regular comparison shopping is one of the easiest ways to slash your bills.
Live long and prosper
People are living longer, working later, and moving through the old milestones out of order or not at all. Owning by 35, settled by 50, done by 65, may be a thing of the past. The older renter is just one of the places the gap shows. It will not be the last.
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