Renters’ Insurance Needs

Persons who live in apartments or rent a residence are fortunate. Most insurance companies can protect their assets and belongings by using a policy that is designed especially for tenants; a renters policy. Typical policies cover your possessions for common causes of loss, additional living expenses related to making other living arrangements, medical expenses for treating people injured on your premises and, of course, lawsuits. Renters’ policies will also protect the tenant’s investment in improvements to a living space made at his or her expense (such as custom-made, built-in shelves).

Property Coverage

Protection under a standard renters' policy is on an actual cash value basis (the cost to replace with a new, similar item, less depreciation).

Example: Stewart’s kitchen catches fire and his three year old refrigerator is destroyed. A new model of the refrigerator costs $750. His insurance company pays him $362, explaining that it’s the effect of three years of deteriorating value. Most companies offer coverage on a replacement cost basis if you purchase a separate endorsement.

Theft Limitations

Certain types of property are quite vulnerable to being stolen, therefore very limited coverage is available for items such as jewelry, furs, gems, gold, silverware, pewterware, money, securities, guns and accessories. Protection can be increased by adding additional coverage to the tenant policy or by purchasing a personal article floater policy.

Additional Living Expenses

A typical tenant policy provides a limit equal to 20% of your contents insurance limit. If your contents limit is $15,000, then your additional living expenses limit will be $3,000.

Liability Coverage

Liability insurance covers you for injury you cause to others and for damage to property that belongs to others. The policy also provides for the cost of a lawyer (if necessary) and most court costs. Examples of liability claims include: slips and falls; beaning a neighbor’s child with a baseball; hitting a golfer with your errant hook shot; or a friend breaking her hip when she trips on a skateboard your child left on the stairs.

Complete, broad, affordable protection is available to protect Renters. It’s a smart move to purchase it!

Do Renters Need Insurance?

Why Renters Should Buy Insurance

People are renters for different reasons. Regardless whether it is because of financial necessity or a lifestyle preference, renters frequently choose not to insure for reasons such as:

Insurance isn't necessary because there's no home, garage or similar property to worry about

There's coverage automatically provided by my landlord, host or relative with whom I'm living

I can't afford it

I don't have enough possessions to insure

There's little chance that anything will happen to my possessions

Busting Renters Insurance Myths

The only thing true about the above reasons for not getting renters insurance is that they can cause real misery from an uninsured loss. Renters need to consider the following:

Possessions are purchased over time. This fact makes it less obvious that a renter may own tens of thousands of dollars worth of property that needs to be insured

Many belongings are very high-value. Renters should consider what jewelry they own and pay particular attention to their electronics situation (stereos, CDs, CD players, game systems, speakers, computers, etc.) Even modest living areas can hold lots of expensive property.

Renters insurance is affordable, often well under $200 per year.

Insurance policies carried by landlords typically offer little or no coverage for property that is owned by tenants and guests.

The same things that can damage a building can damage the property in the building, particularly natural disasters and fires; so a building's contents are very vulnerable to loss

What about Being Sued?

Renters who don't carry insurance should remember that they also need protection for their legal obligations to others. What if you're on a softball team with your friends and you smash a line drive into the face of another player? Emergency treatment and cosmetic surgery is expensive.

If you rent and you don't have insurance…then you have a very good reason for contacting an insurance professional to get you covered….now!

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