Renting Without an Umbrella

While leaving your home without an umbrella on a cloudy day may not seem like a big deal, renting an apartment without having renter’s insurance is. In an apartment blaze just two weeks ago, 12 families lost their homes. Only four of them had renter’s insurance. “No big deal”...”the landlord’s insurance will pay for their possessions, right?” Imagine an umbrella frame without any fabric over it – that’s how much they were covered.

In fact, the landlord’s insurance policy does not usually cover the tenant’s possessions at all. For example, if a leak develops in the roof of an apartment building, the resulting damage to the building caused by the leak would be covered by the landlord’s policy. However, any furniture, electronic equipment, clothing or other personal effects owned by the tenant would not be covered. The same is true if a pipe in the wall freezes and bursts, a fire spreads from another apartment, or a neighbor decides to draw a bath and then leaves the apartment for a few groceries. The landlord’s policy will only cover the damage to the building and his property, NOT the tenant’s property.

Unfortunately, by most estimates, only 3 out of 10 renters nationwide have renter’s insurance. Many tenants fail to get renter’s insurance because they mistakenly believe it is the landlord’s responsibility, they feel it is an unnecessary and burdensome expense, or they just do not want to be bothered with shopping around for it. In actuality, renter’s insurance costs around about $10-$15/month and can insure against water leaks, fire, theft, and other perils. Shopping for renter’s insurance has never been easier. Many insurance companies now provide an immediate quote online after asking a few simple questions.

Most policies also offer liability insurance. For example, let us say a tenant is babysitting her nephew over the weekend. Her nephew imagines he is ice skating with his socks across her shiny floors. Fun? Yes...until he slides into a window sill and breaks his arm. Who paid for the hospital bills? The babysitter. True story. Thankfully, she had liability insurance that covered the bills.

Of course, situations like that do not happen every day. More often then not, a tenant causes water to leak or a fire to spread into a neighboring apartment. Again, with renter’s insurance, not only would the tenant’s possessions be covered, but so would his neighbor’s. Let us not forget about the damage to the landlord’s building. That liability would also be covered. So when purchasing liability insurance, think about how much it would cost to cover your neighbor’s possessions and to repair your part of the building in case you were held responsible for the loss, and opt for that amount of coverage.

A special sector of the rental industry that has been plagued with such problems have been college dorms. With so much brotherhood and sisterhood going around, many students have been caught off guard and robbed. Of course, with renter’s insurance, possessions like a laptop computer can always be replaced. (We can’t say the same for that month of work on the psychology thesis.)

In conclusion, if you are renting an apartment, there is no reason not to have renter’s insurance. It is affordable, easy to buy, and will give you piece of mind the next time your neighbor’s tub overflows. Grab your umbrella while you’re at it.