Renting without insurance can be an issueSometimes, mistaking a myth for a fact can be extremely costly.

Take, for example, the myth that the only people who need to insure themselves against fires, floods or other disasters are homeowners.

Everyone realizes that a property owner needs an insurance policy, but many renters overlook the fact that they, too, need coverage.

"Some think that because the landlord has an umbrella policy, they don't need additional coverage," explains Susan Voss, president of the National Association of Insurance Commissioners, the organization of insurance regulators. "Then there are college students who believe their parents' homeowners insurance covers their apartment."

"People somehow don't think about renters insurance because their home is not a house that they own," she says. They forget that while they may not own the building, they own the contents, and replacing them could be a major expense. Misconceptions about renters insurance can prove expensive when the unexpected happens. "A lot of the people in the recent tornadoes didn't have renters insurance," says Voss.

The number of renters is growing nationwide -- it's up more than 10% between 2004 and 2009, according to Traveler's Insurance -- and in today's economy, many of them might not be on the lookout for one more bill to add to their budgets. But this is one they can't afford to ignore, so forget the myths and go for the facts.

Not Buying Insurance for All the Wrong Reasons

In a recent survey by MetLife (MET) of people who didn't have renters insurance, 33% of respondents said they thought renters insurance was too expensive. Not sure where they were looking, or if they were just guessing. But, at $125 to $200 a year for a policy covering up to $25,000 of contents and $300,000 in liability protection, there's no need to crack your piggy bank, says to Jeffrey Zander, an independent insurance agent with Zander Insurance Group, You could spend that much on a couple of nights out on the town.

Nearly one-fourth of folks surveyed said they thought they were covered by the landlord's policy. Wrong again. The building is protected, but not your stuff. Furthermore, don't assume that if your roommate has a policy, that you're covered too.

Some 20% thought their personal property wasn't valuable enough to warrant insurance. Do the math. If you had to replace your entire wardrobe, furniture and more -- not to mention the cost temporarily moving somewhere else -- could you afford to? The costs add up. In fact, insurers say that the average person has $20,000 in possessions.

What's Covered, What's Not


What's important, is to know is what's covered by your policy and what isn't. Generally, a basic policy will cover clothing, furniture, computers, electronics and such. You can also get liability protection to protect you if someone is injured in your home.
For items like antiques, expensive jewelry, firearms or special equipment, a separate rider might be necessary. Furthermore, some insurers such as Traveler's offer renters policies that cover you for a range of other issues: losses from credit card and check forgery; additional living expenses if you need to stay in a hotel after an incident, and the meals you have to eat out since you can't cook, among others.

While the circumstances under which you're covered varies, some examples include fire, lightning, windstorm or hail, freezing of plumbing system, ice, snow or sleet damage, and theft.

Be clear about what's not covered. For example, jewelry damaged in a fire would likely be covered, but if you simply lost your jewelry, it wouldn't, says Lisa Karpienski, renters insurance product manager for USAA.

Again, policies vary, but generally, causes of loss that are not covered are intentional loss, pollution, lead exposure, flood,
earthquake, and neglect, explains Mario Morales, manager of corporate underwriting for MetLife Auto & Home.

"USAA is unique in that our standard renters policy provides coverage for floods and earthquakes," points out Karpienski.

By the Numbers


As with any product or service, shop around for the best deals. Keep in mind that the higher the deductible you suck up, the lower your premium will be. You'll benefit too, if you bundle your policy with the same insurer that covers your car, for example. Having safety devices like a smoke detector can lower premiums.

You want to be sure your policy offers replacement value, meaning you'll get enough money to buy new stuff at today's prices, not yesteryear's.

Know what the property limits are of your policy, and whether items in your garage or a separate storage unit in your complex would be covered, adds Voss.

Lastly, don't leave your coverage level to guesswork. Valuables should be appraised so you have a basis for assessing their replacement costs. Also, keep receipts for big-ticket items.

Still wondering about renters insurance? There's really nothing to debate. You may not have purchased a home, but for a mere pittance, you can purchase peace of mind.

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24 Comments

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JohnC

Ref :: saraliz0408 .. You should have sued your (Insurance Co ) back to the stone age..If it's not your fault they should have paid all of your replacement costs.and Attorney's fee's..You got shafted ...

May 18 2011 at 6:38 AM Report abuse rate up rate down Reply
JohnC

They're right ..Was a college student in Maryland years ago...Fire started in Apt. below me and destroyed the whole building, although my apt and two others only had extensive water damage..Thought I was covered by the Apt. complex..---wrong .. Unless you can prove that it was aprtments fault, faulty wiring, broken water pipe, etc. the apt owners are NOT liable... Apt. insurance then (middle 1980s ) was only $ 100 per year for $ 15 K coverage..From my stereo equip., Tv, bed, sheets and clothes I had to eat about $ 9,000 dollars..Also got looted ..Get the insurance--it's worth every penny ...

May 18 2011 at 6:22 AM Report abuse rate up rate down Reply
monarchbutterfly

Renters Insurance is an "absolute absolute must"! My Mother and Father recently lost everything (and I mean EVERYTHING) in a fire that was caused by someone else's careless late night smoking. They lived in an apartment building and the whole building will be destroyed now as a result of this goofball's careless smoking. Fortunately my parents had insurance - however, 70% of the residents did not and when it comes to starting all over again, it is truly a blessing to have insurance that covers it!
However, DO YOUR HOMEWORK before you sign on the line for ANY insurance - home, car, cottage, life - and make sure that you understand what exactly the insurance company is offering, how much your policy will pay out on, what exactly is covered, what your amount of living expenses will be covered in the event of a total loss event, and any other thing that comes to mind. ASK Questions to make sure you understand the policy. Even have someone else look over the policy before you sign as a "just in case". It is unfortunately too true that too many people have been screwed by insurance companies - but find a good company and get yourself covered!!!

May 18 2011 at 12:34 AM Report abuse rate up rate down Reply
Franco

Aflax

May 17 2011 at 12:34 AM Report abuse rate up rate down Reply
greentrdr

Renters insurance is a must if you have any sense we had a fire 3 years ago lost every thing and had insurance it paid what we had contents valued at wasnt enough but it sure helped .

May 16 2011 at 11:02 PM Report abuse rate up rate down Reply
Bill Gunderman

While liability insurance might be an issue I see little if any value in property replacement insurance. The most important things such as photo albums and such are irreplacable and there is no way insurance can compensate for such losses.

May 16 2011 at 7:25 PM Report abuse rate up rate down Reply
Donald G

Ha. I own crap so no need for insurance. Man. its so bad we don't even lock our doors at night. The last time someone came in uninvited they left 20 dollars on the table with a apology note.

May 16 2011 at 7:20 PM Report abuse rate up rate down Reply
1 reply to Donald G's comment
evd10

You don't own things, things own you. Freedom's just another word for nothing left to lose.

May 17 2011 at 10:31 AM Report abuse rate up rate down Reply
madddddddddddddd

only an idiottttttttttttttttttttttttttttttttttttt ,does not have onsurance on the car, home ,life,,,,

a very biggggggggggggg idiot...................................................................

May 16 2011 at 4:05 PM Report abuse -1 rate up rate down Reply
UUUUUUUUUUUUUUUUUUUU

BS!

May 16 2011 at 1:45 PM Report abuse rate up rate down Reply
saraliz0408

this article is bullshit most insurance company that are out there will take advanage of you if they can... I had insurance and my home had a fire.. insurance didnt cover anything that was worth anything but they did want me to keep my policy and they are trying to sue me because i dropped them after the fire.why would i pay for fire insurance if there not going to pay after the fire... i will never have fire insurance again its just a waist of my money .....your better off to buy cheap stuff to fill your house then buy the exspensive stuff because the insurance company will only pay for cheap stuff anyways......

May 16 2011 at 1:14 PM Report abuse rate up rate down Reply