Renters Insurance – Mystery Coverage

Tom Wallace Financial, Homeowners Insurance

renters insurance

So little renters insurance?

Why is it that many renters have no insurance? Why is it, when disaster strikes a rental property, the Red Cross really matters? These are questions that likely have complicated answers but don’t need to be.

Renters insurance is an unbelievable value. To not have it, simply makes little financial sense.

Not a “have to have it” insurance products

Insurance purchases go up when it is a “have to have it” purchase. Take auto insurance as an example. Most states require it so most people buy it. Drivers still drive uninsured but in the single digit percentage range.

Lenders fuel the purchase of Homeowners insurance. Renters products are different. Many apartment complexes will require it when signing the lease but after year one, it is very hard to enforce.

Many small landlords do not require it at all. No mandatory purchase requirement makes insurance for renters like life insurance, optional and left up to the individual.

In comes the Red Cross

When a fire occurs, we have all seen the Red Cross show up at apartment buildings to provide resources to the impacted tenants. A great service for sure in the short term but what about the next day?

Sure, family and friends pitch in, perhaps many can go back to their apartments once cleared by the fire department but what if there is no building to go back to?

What if clearing the building takes weeks?

Renters Insurance: Stating the obvious

If property is damaged, renters insurance can fund replacing property. The Red Cross can’t do that beyond basic necessities. The additional costs to find temporary housing will also be paid. Red Cross can lend some assistance at best.

If you live in an apartment you have stuff and it costs money to find temporary housing unless you have friends or family that can take you in but that is not easy on anyone.

Stating the not so obvious

Renters insurance can do more than just pay after a loss to a renters apartment. What if the loss is to a different apartment but that loss prevents the use of your apartment? What if you cannot return for days?

Not long enough to warrant getting a new address but long enough to be costly and terribly inconvenient.

Did you know renters insurance can do that as well?

Civil Authority Coverage

Here is a little known fact. Property insurance has “civil authority” coverage built in for a two week period of time. This goes for renters insurance as well, it is a form of property insurance.

If you cannot return to your apartment because an authority says it is not safe, even if your unit is not damaged, but the cause of the loss in your building would have been covered in your policy had it happened to you, that is a legitimate insurance claim for civil authority.  Your additional living expenses can be covered.

How much does it cost to eat out for a week? How much is one night in decent hotel?

Renters Insurance: the bargain

Who wants an additional cost for a product you may never need? Then bundle it with car insurance. Renters insurance becomes even a greater value. Credits apply to BOTH auto and renters policies.

We have seen cases where the auto savings alone PAYS for the renters policy.

What if you don’t have a car? Then renters insurance is an added cost for sure but can you eat out or stay in a hotel for $10 to $20 a MONTH? Figure out the number of years of premiums that pay a week at a Hilton Garden Inn.

Do yourself a favor, buy renters insurance and if you already have it, congratulations on a wise purchase.