Goodcover Weekly Recap | Week of August 4, 2024

Happy Friday, renters. We’re back this week to bring you the latest housing and insurance news to keep you informed and help you navigate the ever-changing landscape as a renter.

Let’s dive into this week’s headlines:

Housing Affordability and the Growing Renter Class

The affordability crisis continues to dominate the conversation in the housing market. In Texas, a recent poll by the University of Houston and Texas Southern University reveals that 90% of Texans believe housing affordability is a significant issue in their communities. Both renters and homeowners are feeling the strain, with more than half of the state's residents experiencing financial pressure due to housing costs. The situation is similar across the country, with Bloomberg reporting that Manhattan renters are downsizing to smaller apartments to cope with high rent prices. According to Redfin, the number of renter households in the U.S. is growing three times faster than the number of homeowner households. This trend is driven by the rising costs of homeownership, with rent payments up 23% since the pandemic began. Despite a construction boom in multifamily housing helping to temper rent increases, many renters still struggle to find affordable housing. 

Underinsurance and Climate Change

A $1 trillion time bomb is ticking in the U.S. housing market due to the underinsurance of homes against climate-fueled catastrophes like wildfires and floods. According to Bloomberg, U.S. homeowners' wildfire and flood risks are underinsured by $28.7 billion annually, putting more than 17 million homes at significant risk. This growing gap highlights the need for better insurance coverage to reflect the actual risks posed by climate change. Climate-driven disasters like hurricanes and wildfires disproportionately impact renters, who are more likely to be displaced and face longer recovery periods than homeowners. According to Inside Climate News, over 18 million rental units in the U.S. are in high-risk areas. Renters often struggle with inadequate insurance and lack of federal disaster aid, exacerbating the challenges of post-disaster recovery. Advocates are pushing for more renter-specific protections and policies to address these vulnerabilities, including ensuring access to air conditioning during extreme heat waves.

These issues are underscored by recent events such as Tropical Storm Debby, which has caused significant flooding and power outages across the Carolinas and Virginia, and the 93 active wildfires currently being managed nationwide.

Renters: consider creating a home inventory to avoid being underinsured. It’s the most important step to ensuring adequate coverage.

Landlord Accountability and Renter Protections

In New York City, landlord Daniel Ohebshalom has been ordered to serve another jail term for failing to address severe housing violations in his buildings, highlighting the ongoing struggle to hold landlords accountable. Meanwhile, Los Angeles is making strides in renter protections. LAist’s David Wagner reports that L.A. City Council is advancing a proposal to provide free attorneys for renters facing eviction (aka “right to counsel”), reinforcing tenants' rights to legal representation. This move aims to ensure renters can effectively defend themselves in court and stay housed, leveling the playing field in eviction proceedings. Goodcover supports the right to counsel for all tenants.

A Note on Earthquakes

Recent earthquakes, including a 5.2 magnitude quake in Kern County, and over 60 subsequent aftershocks across Southern California, remind us to let you know that renters insurance typically does not cover earthquake damage. For more details on what Goodcover renters insurance doesn't cover, see our exclusions guide. However, in California, earthquake coverage is available through our partner, Palomar Specialty.

Thanks for reading our weekly recap! We hope you found these stories insightful. Follow us on Instagram (please!) and tell us what news stories are on your mind.

Stay safe and informed,
Team Goodcover

Note: This post is for informational purposes; insurance regulation and coverage specifics vary by location and person. Check your policy for exact coverage information.

For additional questions, reach out to us – we’re happy to help.