A Frank Talk About Renter’s Insurance

Imagine, if you will, being cozy inside your apartment, and watching the news as an incredibly powerful monsoon storm moves in. Suddenly, a tree crashes down into the building roof and a wall buckles. Without warning, there’s water pouring in from everywhere, as pipes burst and the rain begins pelting down inside your home. You slip on the wet floor, fall and break your arm. Not a pleasant picture. No matter how you look at it, there’s going to be multiple forms of loss involved.

Renter’s insurance is something you definitely need if you’re renting a home or an apartment. Do not make the mistake of going without this coverage. A renter’s insurance policy is designed to protect you from loss of personal property, negligence and any liability that may arise, like medical expenses and/or lawsuits in case someone visiting your home or apartment is injured. The policy can also protect you in case your rental property is damaged and you have to find other living arrangements.

In the hypothetical instance of the flood due to water and/or roof leaks – the apartment is damaged and needs a couple of weeks to be repaired. Similar to a homeowner’s policy, a renter’s insurance policy would cover your living expenses and accommodations while your unit is being repaired, or until you can find a new place to live. Being covered against negligence is also important protection – say you forget to turn off the bathtub tap, and the tub overflows into the apartment below yours. Guess who is responsible for the damages? A good renter’s insurance policy can help protect you (and your assets) from unexpected events.

Still not convinced? Here are some additional insights and tips for getting the right amount of coverage you need to be protected from loss, damages, negligence and other problematic events.

Isn’t Renter’s Insurance Expensive? Actually, renter’s insurance is quite affordable. Most renters could be well covered against loss, liability, and damages for around $200 a year. That breaks down to around $17 a month – the cost of a pizza, takeout or a few coffees. That’s a pretty decent deal for having protection and peace of mind.

My Landlord Has Insurance So I’m Covered. Nope. The landlord or property management company carries insurance that protects the building/s owned against loss and liability. Sure, your personal property may be in the building, but your landlord has no financial interest in it, so it’s up to you to get coverage. While some policies may provide coverage for roommates, don’t count on coverage from your roommate’s policy, either.

My Stuff Isn’t That Valuable – I’ll Risk It. Don’t gamble with your future. In reality, the replacement value of everyday ‘stuff’ adds up to more than you think – and that’s before adding in stuff like computers, game consoles, personal appliances, and other electronics. In the case of a fire, water leak or other disastrous events where everything is lost, damaged or destroyed, you’ll be out of luck without a renter’s insurance policy. Replacing everything gets expensive quickly.

Talk to Your Auto Insurance Company First. Many insurance companies will offer a discount to customers who purchase multiple coverage types through their organization. Remember to consider that certain types of personal property may have coverage limits – if you have expensive jewelry, electronics, art or collections, it’s worth asking about adding special coverage riders. Don’t forget that additional discounts that may be available for customers, having a security system, etc.

Don’t Be Too Frugal in Choosing Coverage Options. Be aware that money-saving variables like choosing higher deductibles and/or choosing ‘cash value’ over ‘replacement value’ coverage for lost or stolen possessions can quickly become an expensive nightmare in case of loss, liability or negligence. Those few dollars saved each month could potentially translate into thousands of dollars out of your pocket.

Bottom line? Get the best coverage you can afford. Take photos of your belongings, especially expensive items like large and small appliances, electronics, computers, jewelry, and art. Keep them safely stored in case of loss. You’d be surprised at the number of things you could forget to include on a claim. In case ‘life happens’, you’ll be able to recover from the financial hit much faster if you’re covered by renter’s insurance.