Question: I rent an apartment. Do I really need renter’s insurance?
Answer: YES!!! I cannot be more emphatic. YES!!!! Okay, so I was a little more emphatic. There are two reasons why. The first is less common, but just as important.
Renters insurance contains liability coverage. What does that mean? Lets say you have a dog in your apartment. Your dog bites someone. Liability coverage pays for that person’s injuries, medical bills, wage loss and pain and suffering. This means you will not be personally liable if you are sued. But it is not just dog bites. If someone trips and falls, it would also cover you. Basically, if you are negligent in some way, in other words you do something that causes someone else an injury, your renters coverage will pay. In all of my years as an adjuster and an attorney, I have not seen too many liabiltiy claims on renters policies, but they are out there.
The other coverage, personal property, is the main reason people get renters insurance. What is personal property coverage? This provides you with coverage if your items are damaged or destroyed due to a “covered peril.” What does that mean in English? If your property is stolen, damaged by a fire, or any one of a number of other things, then your insurance policy will pay you. The typical situations are a theft or a fire.
But what about the landlord’s insurance? The landlord’s insurance only covers the landlord’s property. Your personal property is not covered.
So let me give you some real world examples. The typical call I get is that someone broke into the house and stole property. I ask if the tenant has insurance. The answer is “No, but its the landlord’s responsibility.” When I ask why, I am told that the landlord owns the house. Or, I get a call that a house burned down and the personal property is destroyed. I ask if they have renter’s insurance and I am told “No, but its the landlord’s fault.” When I ask why, I am again told the landlord owns the house. Solely owning the property does not make the landlord responsible. You have to prove that the landlord did something wrong or failed to do something, like maintain the property. Renters insurance would remove this worry and allow you to get paid for your property.
But, beware. Not all renters insurance is the same. I had a call yesterday from a woman with $5,000 in jewelery and several thousand dollars in guns. She had a $50,000 policy and her loss, according to her, was $100,000 or so. Her insurance company is only going to pay $1,000 for jewelry, $1,000 for guns and $50,000 total. Her solution was to have scheduled the jewelry and guns, paying an additional premium to make sure these were covered.
Yes, you do need renters insurance. And you need to read the policy carefully. Shop it around with a good broker!