Yesterday while driving to work, I heard a report about some of the people who have lost their homes in the Georgia floods. They are renters and their rented homes are gone, along with their stuff. They went to shelters seeking money, but found only food and a place to sleep. The Red Cross can’t provide vouchers until it gets government money and the state is strapped. If these people had renter’s insurance, it would be a different story.
Why You Need Renter’s Insurance
For the most part, renter’s insurance covers the loss of your belongings due to fire and theft from your rented home or apartment. Your landlord’s homeowner’s insurance does not cover your possessions and typically won’t cover your loss of use if the place is lost if in a fire.
What Renter’s Insurance Includes
Renter’s insurance primarily covers your possessions. Most policies also provide some money for loss of use, which will help you find a new place to live if your apartment is damaged in a fire. Once again, don’t count on your landlord’s insurance.
My renter’s policy included a minimal amount for liability, in case a guest was injured in my apartment. This is included automatically, and you don’t need to worry too much about it because this is one area where your landlord’s insurance typically applies.
As with most insurance policies, you can add riders to your policy if you have expensive computers, jewelry, or collectibles.
Flood and Earthquake Insurance
In California, you’ll be offered the option of buying earthquake insurance in addition to renter’s insurance. Don’t do it. Earthquake insurance is designed to cover the structure and has a very high deductible. The cost of the insurance simply isn’t worth it.
Flood insurance is something to consider, especially if you live in a flood zone, like those renters in Georgia. If your apartment floods and your possessions are destroyed due to a water pipes or appliances in your apartment breaking, your original policy should cover you if it includes “discharge of water.”
Your landlord’s policy may also apply if the flooding is due to improper or negligent maintenance, but you’d have to sue him or her to get any money. In the meantime, you’ll have to cover your expenses out of pocket.
Cost of Renter’s Insurance
My $20,000 policy cost $240 a year, or about $20 a month. I had it deducted from my checking account every month, and after a few years the price actually went down due to customer discounts.
True, you may never need to use your renter’s insurance, but it’s a small price to pay for the peace of mind in case anything every goes wrong. If you’re floating down your street in a dinghy, you won’t regret your insurance for a minute, I promise.