Why you should have renters insurance – Part 2

First Apartment? Think: Renter’s Insurance

Maybe you spent your college days (or college haze) in a dorm or a frat house. Perhaps you did rent an apartment with ten of your closest friends. But now you have your first “real” apartment. You may be renting alone or with a room mate or two, and getting up each day for your first nine-to-five job. If you are renting, the apartment or house is all your landlords concern, right?

Well, mostly. The actual physical apartment or house is your landlord’s responsibility to repair and insure against damage. But your land lord is under no obligation to protect your possessions. Until you moved in, you may not have owned much minimal furniture, a few consumer electronics, nothing major. Forget for now your computer, cell, MP3 player, and Wii. Take a minute and ask yourself, “If I had to replace every piece of clothing I own, how much would it cost?” If the answer is more than I can afford, consider what the replacement cost would be if you add all your gadgets back into the equations.

In 2007, there were 414,000 residential structure fires in the United States according to the National Fire Protection Association. Of those, 98,500 were apartment building fires. Basically that boils down to 270 fires daily. Not every one is a total loss, but smoke and water damage from even a small fire can leave your stuff a wreck. That does not take into account the many damaged properties in the past year due to flood, hurricane and tornado. With global climate change a daily reality, extreme weather is adding to the risk for losing personal property. A renter’s insurance policy also protects against theft.

Placed against the risk, renter’s insurance is a fairly small investment for the piece of mind it buys. Most renters’ insurance policies fall into a category of “named peril” policies. Your renter’s policy will specifically state what types of loss it will protect. Some common included perils are:

~ Fire

~ Lightning

~ Smoke

~ Windstorm

~ Theft

~ Vandalism

~ Accidental water discharge (sprinkler or broken pipes)

One nice side benefit is that the renter’s insurance policy also offers some umbrella liability protection. Believe it or not, if a burglar breaks into your apartment, trips and falls over you shoes and breaks his neck, in some states he can successfully sue you for personal injury. Most will also act as a personal liability umbrella policy if the lawsuit you face comes from some other source, like a motor vehicle accident or other personal injury suit from actions off the premises. The renter’s insurance policy will, in some instances, even cover your legal bills in that sort of case.

Another decent aspect of renter’s insurance is the price. Generally, a good policy costs less than $15.00 a month. If you use the same company as you use for your car insurance, you often can get an even better rate. With some car insurance companies, you can add on a renter’s policy for $1-$2 per month. Given the slight cost, cover yourself. You never know when life might catch you unaware.