Renter’s Insurance: Do You Need It, and What Does It Cover?

One good thing about growing up with a dad in the insurance business and working with him as a teenager is you understand how critical insurance is when you’re an adult and have adult responsibilities.

When I moved to Atlanta, Ga., in 1990 and rented my first apartment, I went to the independent agent in the neighborhood and told him I needed renter’s insurance. I was quite proud of myself. I took photos of my apartment and saved all my receipts for major purchases so that in the event of a claim, I would have evidence of my belongings.

If I hadn’t grown up in my family, where insurance was discussed every day around the dinner table, I might have never known that there was such as thing as renter’s insurance.

Recently, a client was renting an apartment with his family. A fire destroyed half the apartment building and shut down the entire building for repairs for almost a year because a tenant fell asleep while smoking in the adjacent unit.

Our clients came to our office the day of the fire with deer-in-headlights looks. They were in such a state of shock they didn’t even know what kind of insurance they had. We were thrilled (despite the circumstances) to tell them they had renter’s insurance. Their immense relief should be a reminder to pay your premium every month and reminds us why we enjoy what we do.

Unfortunately, clients don’t have the insurance experience agents have. In the case of my clients who were victims of an apartment fire, we had had to convince them that renter’s insurance was essential to their insurance portfolio. They didn’t see the need when the building owner’s insurance would cover repairs.

Lucky for them, and their wallets, they took our advice about renter’s insurance. Here are the four reasons we gave them to get renter’s insurance, and why you should be talking to your insurance agent about renter’s insurance today.

1. Your stuff. Renter’s insurance provides coverage to protect the contents of your home. It can cost a lot of money to replace your clothes, books, electronics, furniture, and all the little things in your closets and cabinets. Remember buying a cartful of cleaning supplies, basic necessities, and home goods when you moved into your apartment? You’ll have to go through the same process if everything perishes in a fire.

2. Your liability. You are responsible if someone is injured while visiting you in your home. If your friend expects her medical expenses to be paid for, or worse, sues you, your renter’s insurance (or homeowners’) policy would respond with a lawyer and a checkbook to settle the suit.

3. Loss of use. If a covered claim (an incident covered by insurance) causes you to move out and seek alternative living arrangements, there is coverage for that in most standard renter’s insurance policies.

4. Account discount. If you combine your auto insurance and renter’s insurance policies, you could save as much as 10 percent on both.

If you’ve never researched renter’s insurance, you may be surprised to see how inexpensive it is compared to the benefits in the event of a catastrophe.

Renter’s insurance, unlike other forms of insurance, isn’t required by law. You have a choice: you can look at insurance as an expense or you can look at it as leverage and a way to minimize financial hardship for you and your family.

Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.

Follow Linda on Twitter.