YOUR POLICY QUESTIONS ANSWERED
About a year ago I moved into my Aunt’s place—a place, that does not require a renters policy. I had the same thoughts about coverage that most first time renters probably share (whether or not they’re true): I’m not much of a partier, I don’t/won’t have animals, my partner/friends are not a danger to my belongings, and I generally don’t do stupid things. Why do I need coverage? But a month later, after finding out how renters insurance could save my bacon, I promptly purchased it.
The reality is, most people only seek insurance if they need it. Maybe that’s why you’re reading this. But even if a required policy doesn’t apply to your situation, take a note from someone who’s walked in your shoes: It’s worth it.
SO WHAT DOES RENTERS COVER?
BREAK-INS
Whether some jerk is breaking into your car, gym locker, or house, you’re covered. Yes, that includes everything from your favorite stretchy pants, to your vintage handmade artisan coffee mugs. Just be sure to consult your agent to decide on how much coverage you need for your property. They can discuss finer details with you such as if your loss will be reimbursed based the current value of the stolen item, or the replacement value.
FIRE AND SMOKE DAMAGE
Any property damage beyond your deductible will be taken care of by your policy. Let’s say you have a party and your friend Craig leaves a cig burning on one of your deck chairs. It smolders and catches fire in the middle of the night. The fire damages the building AND your interior. You would be liable for the damage to the building, but fortunately the liability from your renters would cover damage to the interior walls. Your property would pay for any damaged belongings.
SCHEDULED ITEMS
Certain items such as jewelry and guns are limited in value for theft coverage. In order to collect more than $1,500 (amount varies slightly per company) on stolen jewelry for example, the item must be scheduled.
Put simply, this means it’s added to the policy by description and value. EX: 14k yg diamond ring .5 ct tw $9,000. Once it’s added it’s covered for all risk, so an increase in peril and the limitation for theft is deleted. Items that are scheduled have much broader peril coverage and are not subject to the deductible.
PROPERTY DAMAGE
Most people realize that their own property is covered as long as it’s unintentionally damaged: books, clothing, furniture, belongings, etc. What most people don’t know, is that renters policies also cover any damage you accidentally cause to the property of others. Case in point, our Owner, CPCU, AAI, takes us back to the 80’s with a classic tale in which her friend melts an ottoman with a hot pan. Her Bestie’s policy covered the replacement costs, and on that fateful day, she discovered the value of trivets and the dual usage of hot pads.
INJURY IN YOUR APARTMENT
So your friend’s friend Denise trips, knocking your favorite 1960’s glass lamp off of your circa 2004 Ikea dresser (hope she has renters) and now needs physical therapy. Oops. Good thing injury is covered by renters too.
In some situations you may not be at fault. If Denise tripped over your rug, and she can prove that you are negligent, you are responsible. Her treatment would be handled under the medical portion of your renter’s policy. If Denise tripped on a broken floor board that your landlord failed to repair, the landlord is at fault.
ANIMAL BITES
In some cases, policies will even cover animal bites. It’s important to know that most insurance companies will drop you if they find out your have a particular breed of dog. Although bred to be great family pets, Pitbulls currently make insurance carriers’ ‘no list’. Be aware that if a carrier finds out about your pitbull from a broker, or sees them while conducting an inspection, the chances of retaining your coverage are slim to none. We’re not sure about turtles, lizards, cats, or mini pigs, but they are safer subjects to approach your agent about.
WHAT SHOULD I KNOW WHEN PURCHASING A POLICY?
EACH RESIDENT NEEDS TO HAVE COVERAGE
When living with others, each person must have their own policy, or both people need to be added to a single policy (this often happens in the case the two are partners). Let’s say you decide to be on the same policy, if one of you makes a claim, it follows the other person around.
Carefully consider whether or not you’re willing to take on your partner’s mishaps. These can affect your future insurance rates and carrier options.
USE AN INDEPENDENT INSURANCE BROKERAGE
Contrary to the myth that clients pay independent agents, using a brokerage costs no more than going directly to a carrier. Brokerages just do the nitty gritty work for you, and it’s the insurance carriers who pay us.
An agent from an independent brokerage can give you policy options from different carriers to help you compare coverage. They’ll also help explain deductibles, walk you through adding scheduled items, and honestly advise you about how much coverage you need.
When claims come along, and they will, your brokerage will also advocate for you. They contest the underwriter to make sure you’re covered to the extent they owe you, and they fight for the price of your policy.
If you go straight to a carrier company you’re stuck with one option: their option. You’ll also speak with a different representative every time time. Their incentive is to pay out as little as possible for your claims. And we can’t speak enough about how awful their phone mazes are, particularly when you’re already upset by a bump in the road from hell.
IT’S INEXPENSIVE, BUT STILL OF GREAT VALUE
My policy only costs about $144 a year. At $12 a month, that’s very inexpensive, and it’s an amazing value considering I have $130,000 of coverage. This investment pays off the second I accidentally break something, whether it’s at my place, or my friend’s place. Yes, it follows you. Remember the ottoman accident?
The most heavily weighted factors that drive the cost of insurance are credit scores and the coverage amount desired. If you do want to have a policy with your partner, this is another issue you should consider in making that call.
HAPPY RENTING!
Kenzi is our communications wizard and a first time renters policy holder. But would she file a claim if some of her partner’s chachki happened to break? It’s a solid “No.”