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Your Guide to Renters Insurance - How to Survive Your Trial by Fire

Christy Perry

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Michelle was cooking dinner when the phone rang. She left the chicken in the pan for only a couple of minutes, but that was long enough for it to begin to burn. The flames quickly spread to the grease that had spattered on the edge of the stove and the counter. She splashed water on the fire, but that only spread it around. By the time she remembered that she should pour flour over a grease fire, it had already spread out of control.

The fire department arrived within a few minutes. They extinguished the fire, but there was already over $10,000 in damage to the apartment. Michelle had lost everything in her kitchen and had smoke and water damage to her furniture.

Then Michelle got her next shock: The owner of the apartment building repaired the damage to the apartment, but then he sent the $10,000 bill to Michelle for reimbursement.

This story has a happy ending. Michelle's mother had been pushing her to get renters insurance, but she put it off, telling herself that she did not have enough stuff to be worth the cost. Then her mother got a quote from her own insurance agent and gave it to Michelle. She could get a renters insurance policy for only about $100 per year.

When she learned how affordable it was, she purchased the policy, only one month before the fire. Everything was covered. As Michelle learned, her policy paid to replace her possessions that were lost in the fire, and it repaid the landlord for the fire damage. It even paid her extra expenses to live somewhere else while her apartment was repaired. Michelle was free and clear, with new dishes and furniture.

What Does a Typical Renters Policy Cover?

First, it covers your personal property. This includes furniture, clothes, electronics, computer equipment, and other property that belongs to you. You choose the amount of coverage that you need.

You also choose whether you want replacement cost or actual cash value. If you choose actual cash value, the payment will be reduced for depreciation, since an old television is not worth as much as a new television. Usually it only costs a few dollars more to get replacement cost coverage, and you will be much happier if you have a claim.

In addition to fire, it also covers against theft, vandalism, some types of water damage, and several other causes of loss. According to national statistics, people who rent are at a higher risk of theft and vandalism than people who own their homes.

Second, it covers additional living expenses. This is the extra cost to live somewhere else while your apartment is being repaired.

Third, it covers liability. If someone falls at your home and is injured, and they sue you for their medical costs, your renters insurance will pay those costs. It will also pay the legal costs to defend you in court. Also, as was shown in the example above, it reimburses the landlord for damage to the building if you start a fire in your apartment.

That is a lot of coverage for only about $100 a year. To make it even better, you can probably get a discount on your car insurance if you have your renters insurance with the same company, and sometimes that discount is enough to pay for the renters insurance. Who can argue with two policies for the price of one? Apparently, the only question is not whether to get renters insurance, but how much coverage to purchase.

Contact Your Agent!

Policies vary widely from company to company and from state to state. Contact your agent for more information on what your renters policy covers.

Your personal property is one of your biggest assets, so you need to protect it properly. More importantly, these are your dreams! If you can't get the coverage you need from your insurance company, consider shopping for a different company. And if your agent can't answer your questions, consider shopping for a different agent. This type of consultation is the agent's job. It is why you pay him! Don't you deserve to have your things protected properly?

Ms. Perry had about 15 years of product management experience before she opened her agency just outside Columbus, Ohio. Because of her background, she focuses on annual protection reviews with her customers, helping them to find what their policies cover and what is excluded. For more information about the types of things you should discuss with your agent in your next annual protection review, please visit her web site at .


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