Unfortunately, most apartment dwellers don’t believe they need insurance because they don’t own the property. However, besides protecting the structure, a renter is still exposed to the same risks as a homeowner and coverage is needed for those risks. So the following five points explain why you need renters’ insurance.
1. Personal Property Coverage.
Personal property is probably the most important coverage you will need as a renter. A renters' policy will cover personal property wherever it may be located, anywhere in the world. So for example, if you have your laptop in your car and someone steals that laptop while you are out and about, it is covered even though you are not using the laptop in your apartment. Your renters’ policy will generally cover to have the laptop replaced new. That is not a risk covered by your auto insurance. Same with cash or jewelry or other valuable items. The policy will cover the replacement value up to the policy limits for a covered loss and that coverage extends beyond the four walls of your apartment.
You should also make sure to schedule any valuable items that may be worth more than the policy limits to make sure you can replace those things if there is a loss. Items such as valuable art, collectible items, heirlooms, china, silver, fire arms, wedding rings and wedding gifts. Anything that has unusual value, should be listed on your policy. And, if you don’t know the value, you need to get those items appraised. Your agent should be able to direct you on how to get that done.
2. Personal Liability
As we walk around this world, we are all exposed to personal liability and it doesn’t matter whether you intend for something to happen. In fact, we generally don't intend for bad things to happen. If you make a mistake, that could be deemed as negligence, which could make you financially responsible for the harm, injury or damage experienced by another.
The mere status as a renter, could make you liable if someone was injured in your home.
We live in a litigious society and don’t think it can’t happen to you. Claims adjusters have file cabinets full of cases involving events or circumstances that no one could conceive of prior to buying renters' insurance.
Even if you know your not at fault, you can be named as a defendant in a lawsuit, and it could cost you everything you have just to hire an attorney and defend on that lawsuit. A judgement against you would remain on your credit for 10 years, and would certainly delay or eliminate the dreams of ever owning your own home.
3. Renters’ Insurance Is Very Affordable.
Because your policy does not cover the structure where you live, renters’ insurance costs only a fraction of what homeowner's insurance would cost. For less than $20 a month you generally can get $100,000 in personal liability coverage and $25,000 in personal property coverage. That would also include $1000 for guest medical insurance if someone was to get hurt on your property.
Of course circumstances may vary, and rates depend on the area and the property in which you live, but for the most part, renters' insurance is very affordable for the amount of coverage you can get. You also will get a discount on other policies such as auto if you are with the same insured. In fact, the discount on auto insurance can many times offset the cost of the renters' insurance.
4. You Can’t Rely On Your Landlord.
Many have the misconception that they don’t need renter’s insurance because their landlord has insurance, but that only covers the landlord and does not cover the risks to which you are exposed. If the apartment building burns to the ground, the landlord’s insurance is not going to cover your losses or replace your valuable property. And, if you are blamed for the catastrophe and get sued, your landlord’s insurance policy will not pay to defend you on that. You need to look after yourself and have adequate coverage, which again does not require a big expenditure, but should be a priority that is in your household budget just like any necessity.
5. Loss of Use
If a catastrophic event occurs and you are displaced from your home, renters’ insurance can provide the funds to help you find alternative housing until you can return to your rented space or move somewhere else. It’s good to have $10,000 or $15,000 to do that for a year or so as you sort out your living arrangements. The last thing you want on top of any catastrophic event is to be left without a place to live, or feel like you are a burden to your family and friends as they extend a helping hand in your time of need. You don’t know how long that safety net will last and a renter’s policy will give you peace of mind regarding such a loss.
You can also add earthquake and flood to most renters policy. This again is very affordable as you are not covering the structure as that is handled by your landlord. These are two risks that always come by way of endorsement on any homeowners or renters policies. Earthquake will cost around $5 to $8 a month for renters and will cover personal property and loss of use in the event of an earthquake.
In Southern California, earthquake coverage is very important. Its been a while since we have had a major shaker. In 1994 many were displaced in the Los Angeles area due to the Northridge earthquake. (See blog post on California Earthquake Authority “CEA.”) The City and the County “red tagged” properties that suffered damage, thereby displacing those renting the properties, and leaving the tenants without homes until the structures were fixed. Many had renters' policies and had $10,000 or so in Loss of Use coverage to help them out.
These are only five reasons to get renters insurance and there are more. Make sure you contact a reputable insurance agent and discuss your living arrangements and your specific needs for coverage. You will find renters’ insurance is very affordable, and you can bundle a renters’ policy with other insurance like Auto and Life and get further discounts. And, like any insurance make sure you calendar your expiration date to make sure your policy stays in force, and again a good insurance agent will help you with that.
Author:
California Licensed Insurance Producer LIC #0K13538
27004 Ventura Blvd. Ste 260
Calabasas, CA 91302
(818) 699-1789
Cell (818) 451-3878
Kevin Boyle is a licensed insurance agent in
Calabasas, CA. He has an MBA and practiced law for many years prior to starting
his agency. He can be reached at (818)
699-1789 or by email at kboyle@farmersagent.com.
You can reach him any time and he can help you get your insurance policy
in place.
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