If you rent an apartment, townhouse, condo, or even a house, you may be wondering if you need insurance. After all, you may be thinking, isn't it the landlord's responsibility to insure the building? You're right about that. But think about this. What if your clothing and furniture were destroyed in a fire? Your laptop and jewelry were stolen? The destruction or loss of your possessions would almost certainly not be covered by your landlord's insurance.
Fortunately, there's renters insurance. For a nominal fee - often under $200 a year - less than the cost of a daily cup of coffee at your favorite drive-through - you can purchase renters insurance - a.k.a. tenant or apartment insurance. And if you purchase this policy from the company that provides your auto insurance, you may be eligible for a multi-policy discount.
Yet, according to a 2010 survey by Apartments.com, 70 percent of apartment dwellers do not carry renters insurance. This prompted me to think about the reasons why so few have this protection. I hope I've already debunked a couple of them: first, that the landlord's policy covers the renter's personal property; and second, that renters insurance is expensive.
There's another reason why people don't insure their apartments. Many people feel the don't have enough property to make such a policy worthwhile. If you're in this group, I invite you to take a pen and notebook - or a camera - and record what you see in a tour around your apartment. Then estimate what it would cost to replace your furniture, dishes, clothing, jewelry, TV, computer and electronics, musical instruments, bicycle, sports equipment, and everything else.
Once you start to add up the cost of replacing all these items, you may want to consider a replacement cost policy - one that pays the actual cost of replacing your possessions - up to your policy limits.Â This is a great alternative to getting a check for the depreciated value.
You'll also want to protect yourself against liability. If someone should slip and fall in your apartment, renters insurance will cover his or her medical expenses, and if you should be taken to court, it will also pay your legal defense costs. Also, if a fire or another covered disaster makes your apartment uninhabitable, most policies will help you pay the additional living expenses resulting from this temporary displacement.
If this message doesn't apply to you, I hope you'll pass it along to the young adult professionals in your family - or to parents or friends who in this challenging real estate market are finding that apartment living is a financially feasible option to home ownership. And if they - or you - have questions about renters insurance, we invite you to be in touch with one of our Mid-State Insurance advisors who will help them explore their options.