Many renters live in apartments, townhomes and condominiums and don’t carry renters insurance. For some, they feel the risk is small enough that they are willing to take it rather than to pay the premium for renters insurance. Others are under the mistaken belief that the building insurance will cover their losses in the event of a fire or theft. This is never true.
But how small is the risk? If you had to replace all the contents of your apartment, how much would it cost you; your entire wardrobe, all your furniture, your music collection, everything in your kitchen, your computer, camera and other electronic items? $7,000.00? $15,000.00? Probably much more than you think.
What could a renters insurance policy provide for you?
- Content Replacement. If every single item in your apartment was destroyed by fire, it is unlikely that you would have enough money in your savings to replace it all. With renters insurance you have both of the same options that homeowner’s do. You can insure for current value or replacement value. The first one will pay you the current value of your 5 year old television, in other words, what you could sell it for. The replacement value policy would pay for a brand new television of similar quality. Make sure you know which type of renters policy you have.
- Liabilities. If one of your visitors slips and gets hurt in the lobby of your apartment building, they can sue the owner for damages, but you have no liability for their damages. If they slip and get hurt in the bathroom of your apartment, then, you are the person liable, and you are the one they could sue for damages. If you have renters insurance, you’ll have protection against these types of suits.
- Living expenses. If your apartment is damaged by water, smoke or fire, you will likely need to find another place to live, at least temporarily. Do you have money to setup house in another location, or to stay in a motel? This is another instance where you would be very thankful to have an insurance policy in place that would cover these expenses for you.
- Medical expenses. This item fits in with the liability section. If a person does get injured in your rental space, even in a small way, you may be liable for their medical bills. Rental insurance would pay for the stitches in his head when he tripped and cut in open on your coffee table.
- Fire and smoke. If there is a fire in the building, the damage to your personal property can be immense, even if it is quickly extinguished. Smoke and water damage can expand far beyond the area of the fire itself. The building insurance will replace or clean your ruined carpet but everything else will be your responsibility.
- Theft. Rental units are becoming targets for theft, much more often than they used to be. Even in a ‘secure’ building, this type of loss remains a possibility.
- Water damage. If there is a water issue in the apartment above you and it comes through your ceiling and ruins your computer, the landlord has to pay for it right? Wrong! Even it was due to his negligence, the only way you might get him to pay for it would be to take him to court. Court takes time and has no guarantees of a decision in your favor.
- Vandalism. Renters insurance won’t alleviate your anger at having your possessions destroyed for no good reason, but at least it would help you with replacement costs and cleanup of the mess.
- Flood. If you live in an area where flood water damage is a possibility, you’ll want to have renter’s insurance that specifically covers that type of damage. Water can destroy just as totally as fire.
- Joint tenants. If you’re sharing your apartment with another tenant, you might want to get joint tenant coverage with your rental insurance. You may be buddies to start with, but sharing close quarters for a length of time, sometimes turns friends into enemies. A little preventative protection, can’t hurt.
To live without renters insurance is a big gamble. If you lose the gamble, the costs could put you in the poor house; either that or your mother’s house. Avoid both by contacting your insurance agent and getting the coverage you need.