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A For Rent sign in the window of a residence

Renters Insurance:
Yes, You Need It!

Over the weekend I saw a colleague and she informed me that her mother’s apartment building burned down. After ensuring her mother was okay, I asked if she had renters insurance. Unfortunately she did not.  I’m quite aggressive in ensuring homeowners have adequate insurance but I realized after hearing my colleague’s story that I’ve completely dropped the ball when it comes to promoting renters insurance. Well, the buck stops here.

In 2009, U.S. fire departments responded to 362,500 home structure fires. These fires caused $7.6 billion in direct damage. – National Fire Protection Association


According to the latest Census data the number of renter-occupied housing units is up ten percent yet over half of renters don’t have insurance. Your landlord may have insurance that covers damage to the building’s infrastructure, but who’s covering your Rolex, iPad and flat screen? I’ll bet money most landlords aren’t covering insurance on their tenants personal property; hence the need for renters insurance.

Renters insurance covers your personal property from theft and damages. Your possessions are typically covered even if the loss or damage occurs outside of your home. Let’s say you leave your camera at a friend’s apartment and the camera is stolen or you’re on vacation and there’s a small ceiling leak that damages your camera; you’re covered. A basic policy will cover electronics, clothes, furniture, sports equipment, and appliances. The extent to which these items are covered will vary from policy to policy. You will have the option of coverage that replaces the actual value of your items or the replacement value. Please, note you should always select replacement value as this coverage will cover the cost of a brand new item at its current cost verses what the value of the item was at the time it was lost. For example, if your 5-year-old iPod is destroyed, a replacement cost policy would easily cover the cost of a brand-new iPod. An actual cash value plan would only give you what the iPod was worth at the time it was destroyed. As we all know there have been a million and one versions of the iPod released over the past five years. I would hate to see you stuck with the old Nano when there’s a new iPod Touch available. Generally policies will provide coverage from the following:

  • Fire or lightning
  • Windstorm or hail
  • Explosion
  • Riot or civil commotion
  • Aircraft
  • Vehicles
  • Smoke
  • Vandalism or malicious mischief
  • Theft
  • Damage by glass or safety-glazing material that is part of a building
  • Volcanic eruption 
  • Falling objects
  • Weight of ice, snow or sleet
  • Water-related damage from home utilities
  • Electrical surge damage

Victims of burglary offenses suffered an estimated $4.6 billion in lost property in 2009. – FBI 2009 Crime in the US Report

Take note that flood and earthquake damage are not listed. These can be added at an additional cost. All policies are not created equal so in addition to making sure the basics are covered, look for these additional benefits.

Temporary Shelter – If you’re unable to return as a result of the damages, it would stink if you had to foot the entire bill on hotel expenses. A good policy will cover some of the out of pocket expenses you may have while displaced.

Possessions in Transit – Having coverage on your items while in transit is important. In most cases you are already stressed so avoid having to worry about the safety of your possessions while being moved from one place to another.

Liability Coverage – Mistakes happen and as cool as you and your best friend maybe it would be nice if you were able to pay for spilling red wine on his or her carpet. Having liability coverage in your policy is a plus. Not only will it cover you from accidents like the one mentioned above but it will also protect you if someone is injured in your place and decides to sue.

Identity Theft Coverage – The average out-of-pocket lost from identity theft is $1,870, according to the Bureau of Justice. Some policies may cover the expenses you will face when clearing your name such as lost wages, postage expenses and reasonable attorney fees.

How Much Will it Cost You? You’ll pay $18-$25 per month on a basic renter’s policy. If you add additional coverage on expensive jewelry or protection against flood damage your premiums will naturally be more expensive. Most companies give additional discounts if you have installed smoke alarms, fire extinguishers, burglar alarms or deadbolts. In addition, if you already have life or car insurance with a provider it’s smart to discuss coverage through them first. They will often have multi-policy discounts.

Research has shown that the average renter owns about $20,000 in personal property and statistics aside I’m sure if you take an inventory of one or two rooms in your apartment you’ll pass that average. Don’t risk being caught out there, take an inventory of your possessions at http://www.knowyourstuff.org/ and contact an insurance agent to discuss renters insurance.


Before selecting an insurance provider, make sure you check their ratings at Standard and Poor’s and Moody’s.

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One Comment so far:
  1. Dorethia says:

    You are definitely on point with this article. Renters Insurance is important to have and its sooo affordable! Thanks for sharing!

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