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Why renters insurance is a bargain

For as little as $150 a year, you'll be covered. You can't afford not to have it.

By Donna_Freedman Jan 28, 2013 1:11PM

Recently, I read an interview with a local man who had been displaced by an apartment fire. He wasn't sure where he would go once the temporary Red Cross housing ran out or how he would replace his belongings.

If he'd had renters insurance, he would have known exactly where to go: to a hotel paid for by the policy. He'd also have been able to shop for clothes, furniture and other items lost in the blaze.

Unless you own the place where you live, you need renters insurance. This kind of coverage is essential for anyone renting a home, apartment, dorm room or space in a senior living complex.

Policies cost as little as $150 a year. If you think you can't afford it, consider this: How would you afford to replace some or all of your belongings due to fire, flood or theft?

Picture yourself shut out of your apartment. The landlord will give you your deposit back, but that takes time. How's your bank balance looking -- got enough for first and last month's security? Oh, and what will you wear to work now that your clothes are all gone?

Covering your assets

When the agent asks about your belongings, pay attention -- these folks are skilled at helping us realize just how much we do have. A few examples of things that are expensive to replace: hobby or crafts supplies, business attire, makeup, tools, high-end toiletries, wine, sporting goods, holiday decorations and specialized clothes such as work boots or insulated coveralls.
House for rent in the middle of winter (David Joel, Photographer)
Since limitations exist on certain items, such as jewelry, ask the agent about buying additional coverage. He or she should also: 
  • Explain the difference between replacement value and actual cash value of your belongings.
  • Make sure the "loss of use" section of the policy is adequate if you live in an expensive area.
  • Encourage you to document your belongings with a checklist or, ideally, with video or photos -- to be stored elsewhere, obviously. (The Insurance Information Institute has free inventory software and free storage at a site called KnowYourStuff.org.)

Renters insurance may also cover off-premises troubles: luggage lost by an airline, say, or the X-rays for the guy you hit with a wild pitch in a pickup softball game. Any time you suffer a loss, no matter how odd, you should call your agent to see if it's covered.

Even if money is tight, remember: You cannot afford to be without this coverage. Ask about senior, military or good-student discounts; if you have auto insurance, see if there's a discount for established customers. It may be possible to pay by the month, although that will likely cost you a little more.

Find that money somehow, lest you find yourself couch-surfing or, worse, in a shelter once your friends run out of patience.

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26Comments
Jan 29, 2013 9:59AM
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People have a lot more money in "stuff" than they realize. In a sue happy world, it's also pretty easy to lose several years worth of income in a split second over something like a skateboard left on the sidewalk.

I find most of my clients who rent can actually get renters insurance for much less than even the $125 annual premium. Having the renters insurance provides a discount on the auto insurance and vice versa. About a third pay less for both policies than they would for auto insurance alone.

For those of you who want to harp about my making a commission--if they pay less, I make less. I do it because it's good for the client.     
Jan 29, 2013 12:42PM
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Surprisingly though, folks have no problem paying $100-$200 a month each for cell phone and cable bills.
Jan 29, 2013 10:37AM
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I don't know about anyone else, but i would never live without renters insurance! Why take an unnecesary risk? Its well worth the price, especially if you find you need it!!!
Jan 29, 2013 12:15PM
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I had a water pipe freeze up in my rental unit and flooded the whole house.My renters had no insurance and had to live with thier parents.If they had insurance they could have been in a hotel room and had thier property replaced.From now on I will strongly encourage to my next tenants that they get insurance or add $15 or $20 bucks a month to the rent and get it for them.

 

 RENTERS.............DONT GO WITHOUT!!!!!!!!!...It only makes sense

Jan 29, 2013 10:37AM
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Ignore these other two idiots and get the insurance! Penny wise and a pound FOOLISH they are!
Jan 29, 2013 11:59AM
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It is unbelievable that people don't have all the insurance they need. Is it ignorance, indifferance, arrogance (let the government pay for our damages), what? As my father used to say, It's buying peace of mind, and it's worth every penny. I agree.
Jan 29, 2013 12:17PM
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A little bit of something always beats a whole lot of nothing.

     Many times, people talk about insurance---largely auto---being a legal racket. Which is actually true because prices are often not even worth mentioning, much less paying. And, it's just the old "Okey-Doke" in the eyes of the law.

     But, in this case, at least given the story told here, Renter's Insurance appears 2B more than worth it.  You need not be an owner, yet have "many-an-amenity" as described here, and have some of that same piece of mind as a full owner for only $150 a YEAR.  This breaks down to $12.50 a MONTH. Even in this economy, that' s doable.

    If you have to have insurance at all-----and, I am no different----then, at least pay a price that is worth paying. We all need it somewhere, so let's have it here, too.  I really don't see why not.
Jan 29, 2013 8:51PM
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Renters insurance not only covers your belongings, it also covers "prohibited use".  I found this out after Hurricane Sandy took out the electrical systems in my high rise building.  It was either live in a freezing cold apartment with no running water, 10 floors up, or move to a hotel for the three weeks it took for the building to fix the electrical systems.  Who can afford a 3-week stay at last minute rates in a hotel in NYC?  My renters insurance covered it!  I've had it for years, never expecting to use it, and I used it in a situation I never knew it even covered.  They even covered the food in the fridge and freezer I had to throw away, and expenses above what I would've spent had I been in my apartment (think commuting costs and meals at restaurants).  
Jan 29, 2013 2:19PM
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I always had renters insurance and now I have home owners. I did a partial home inventory and found I need to buy ore coverage and I did.

When I lived in a apartment the apartment a building done the street had a pipe burst and two of the renter lost a lot of belongs, but the third tenant had insurance and was covered. I would never be without insurance and if you don't think your belongings are expensive to try replace them.

Jan 29, 2013 10:08PM
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The last time I had renter's insurance, it was $270/ yr and that was for $100,000 worth of insurance.  It seemed  like a helluva bargain to me.
Jan 30, 2013 11:02AM
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House next to me burnt in 2007.  Was there when it started and first person along with two other neighbors fighting it until the fire fighters got there.  Used one of the 3 hoses (2 outside taps and 1 irrigation hose) to hit pieces of flaming debris that was attaching to my house.

 

 Neither my roommate or myself had renters insurance at the time.  The next week, I got renters insurance and have had it ever since.

Jan 30, 2013 12:26AM
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I recently got divorced, and was waiting on a new lease from my landlord to send to my insurance company so that they could remove my ex from the policy. While I was waiting, my policy expired. Then I went on vacation. And while I was away, yep, you guessed it - I got robbed.

Most of what was taken was irreplaceable - family heirloom jewelry, mostly. But all of it would have been covered had my policy been active. I could have absolutely used the money to replace the other items, like the TV. 

I'm extremely thankful that it was a break in, and not something even more damaging like a fire. It was plenty bad enough but could have been so much worse. You don't think about how important that policy is until you actually need it.

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I used to have renter's insurance, but I cancelled it.  It was costing $300 per year, and every time I put in a claim, I got some kind of excuse as to why they wouldn't pay me.  One time I had a hole in my window, and they asked me if was made from the inside or out,  and since I couldn't tell them because I didn't know, they wouldn't pay me.  Another time, I was the victim of a burglary, and they got my cordless phone, my answering machine, and my VCR, which cost a total of $150, and that was the deductible.  That was enough for me.
Jan 30, 2013 11:20AM
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My renters ins. is 7.24 a month,it is through my auto ins co.That is 86.88 a year cheap cheap!!!!!
Jan 29, 2013 11:39AM
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* Renter's Insurance does not cover the peril of Flood on a standard policy, the way this article is presented is a bit mis-leading.  The "journalist" should have actually consulted more than one agent or better yet, sought out a personal lines underwriter. 

Jan 29, 2013 12:30PM
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flood coverage....if from above down covered. From ground up not covered.
Jan 29, 2013 2:21PM
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no record or photos of tangible goods, more than likely no to very little claim by the industry....the mob still exists in sharkskin clothing..cover ALL bases when dealing with those $$ CATS........
Jan 28, 2013 2:24PM
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Why do journalist write so many articles under the assumption that they are somehow wiser and more cognizant of life's perils than the average reader?  This article explains how dangerous life can be, and why, therefore, it's a good idea to have renter's insurance, rather than an intellectual or statistical justification for low rental premiums in comparison to other insurance as one would expect.  Web writers would rather preach and teach than put any kind of work into researching a topic.  As a result every article seems to be written for a 5th grade audience.

Jan 28, 2013 4:40PM
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Actually, insurance is typically only worth it if you can't cover the replacement costs. After all, the people selling it have to make money somehow. It may make sense for people with almost not money, but those with at least *some* money will probably do better by taking the $150-300 they would have spent on insurance and saving or investing it.
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Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.

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