Michael Estrin. Yahoo! Finance. 2008/12/8.
Almost half of the 87 million Americans living in rental housing have no insurance on the contents of their home and stand to face a total loss in the even of theft or fire — an increasing concern as we head into the holiday season. When it comes to whether or not to purchase renters insurance, the answer should be a resounding yes, says Janet Portman, a lawyer and managing editor of the Nolo legal series, which publishes her book, “Every Tenant’s Legal Guide.” But for a product that Portman calls, “absolutely a good thing to have,” surprisingly few renters are actually on board. A recent Allstate survey shows some 43 million renters would be left hanging with the total value of their lost or damaged possessions, something most renters simply can’t afford to do. While there are a lot of reasons why people put off buying renters insurance, Jeff Moree, a product director for Allstate, says the root cause of the problem appears to be a fundamental misunderstanding of the nature of renters insurance. So, with that in mind, we’ll start with some common misconceptions. After that, we’ll look at what you need to know as an informed buyer. 5 bad reasons for not buying renters insurance:
- My landlord’s insurance covers me
Wrong. Your landlord’s insurance covers his building, but will likely never include your personal possessions, says Portman, who points out that your property is always your responsibility to insure. - Buying renters insurance is too expensive
To be fair, prices vary when it comes to renters insurance. But it’s a relatively cheap product as far as insurance goes. Moree estimates that a renter could obtain coverage for as little as 50 cents per day, depending on the total value of his or her household items. But for most renters, coverage should run about $250 per year, according to Kelly Lyttle, a manager of personal insurance lines for William Gammon Insurance. That figure works out to about 68 cents per day — far less than your daily cup of coffee at Starbucks. - My stuff isn’t worth enough to insure
If you’re living in your first apartment, sitting on a couch you bought at a garage sale or watching a television that was a hand-me-down from your parents, it’s easy to say your possessions are essentially worthless. But that would be a big mistake, says Moree, who adds renters should think in terms of the total cost they would incur tomorrow should a catastrophe happen today. “It adds up very quickly, and it can be expensive to replace everything in your apartment, from clothes to furniture,” Moree says. To get an idea of how quickly costs add up, representatives from Allstate went to stores like Wal-Mart, IKEA and Bed, Bath & Beyond to determine a rough cost of outfitting an entire apartment all at once. Factoring in high-end items such as home electronics and things that people often forget about, like toothbrushes and socks, Allstate found that it would cost a single renter living in a one bedroom apartment more than $13,000 to replace everything he or she owns. - It’s only my stuff
While most people think of renters insurance as a mechanism for replacing lost or damaged possessions, a standard policy also includes liability coverage. In the classic example, a renter’s liability coverage will kick in when a guest in their home slips and falls. That policy will not only provide money in the event that the renter is held liable for their guest’s injuries, it also will provide for the renter’s legal defense. Likewise, a renter’s liability coverage will kick in when his or her negligence results in property loss for other tenants in the building. For example, a renter who lets his bathtub overflow and causes water damage to a downstairs neighbor should be able to mitigate his out-of-pocket expenses by filing a claim on his own policy rather than having to pick up the tab for replacing his neighbor’s damaged property. But Portman says some policies may protect a renter even further, covering, for example, a negligent act committed off premises. A classic example is a renter being sued because his or her dog bit a pedestrian while walking through the neighborhood. While the example is obviously applicable to renters with dogs, Portman points out that good off-premises coverage could help protect the renter against a number of legal assaults in much the same way that homeowners are protected by their policies. And that’s not a bad bit of protection to have in an increasingly litigious world. - It takes too long
Shopping is what you make of it, and while all the experts recommend you price policies online and then work with an insurance agent who can tailor a policy to your specific needs, the truth of the matter is that buying renters insurance could be done in about 30 minutes. “Buying renters insurance is far easier than purchasing auto insurance,” says Moree. “It should take a fraction of the time and there will be far fewer questions to answer. The primary factor driving price will likely be the amount of coverage you’re buying, where you live and any applicable discounts you may be entitled to, based on your age or the fact that you have other policies with the same company. 6 tips for buying your renters policy to read the entire article, go here: http://ca.biz.yahoo.com/brn/081208/26889.html?.v=1
Renters Insurance protects your stuff!
