For millions of people renting apartments in New York City, renter’s insurance is often in the back of their mind as something they should have but haven’t gotten around to yet. Since there’s no law requiring that you purchase a policy, many renters falsely assume their belongings will be covered by their landlord’s policy if anything goes wrong in the building.
Although you could sue for damages, it just takes watching an episode of The People’s Court to see how difficult it can be to recoup losses from your landlord —even if your entire wardrobe is damaged because of a burst pipe in an apartment upstairs. Do you have proof of how much you paid for all of your lost items –proof that would hold up in court?
Whether you have only a few valuables or a huge apartment full of high-end luxuries, here are 5 things you should know about renter’s insurance.
#1: PERSONAL LIABILITY
Most people don’t realize that Personal Liability protection comes from their own renter’s insurance. Did you? Whether you’re having some friends over for drinks before hitting the town or just walking your dog around the block, we’re all potential targets for a possible lawsuit.
Yet, in addition to coverage for personal possessions, the Personal Liability section of a renters’ policy will protect you against lawsuits for bodily injury or property damage done by you, your family members, and even your pets!
For example, if you should cause a leak that damages your neighbor’s apartment, it’s the liability coverage within your policy which will cover your neighbor’s damages. For young adults renting their very first apartment, it’s especially important to make sure they (and any potential roommates) are covered from an unexpected incident.
In many cases, $1M (and with direct carriers it’s often less than $1M) of liability coverage offered under the renter’s policy is not enough. That’s where a Personal Umbrella policy provides for higher limits of liability protection.
If you’re not familiar with an Umbrella policy, let’s talk!
#2: TAKE INVENTORY WHAT YOU HAVE AND WHAT IT’S WORTH
In the event of a loss, it would be smart to have an inventory of your entire apartment. This will help expedite the process should you need to . I tell my clients to take video of the apartment to show what it looked like in the event they needed to recreate the home. However, the strength of your policy will depend on it’s details.
For instance, I prefer carriers that provide replacement cost on contents (which pays the full cost of replacing an item). On the other hand, many other carriers offer actual cash value (the value of the item at the time of the loss).
Make sure your renter’s policy is offering the best terms available. And, if you don’t understand the lingo —just ask me.
#3: VALUABLE ITEMS SHOULD BE SCHEDULED
If you own a Renoir, very expensive jewelry, or you’re a musician with valuable instruments inside of your apartment, the best practice is to insure those items separately.
While standard renter’s policies provide some protection, the limits might not be adequate to cover the value of your collection. Depending on the carrier, limited coverage is offered for items such as: unscheduled jewelry, watches, fine art, musical instruments, cameras, silverware and computers. However, don’t forget that any property not scheduled is subject to the deductible.
So make sure to insure that engagement ring separately based on a previously agreed amount!
#4: PAYS FOR A PLACE TO STAY IF YOUR APARTMENT BECOMES UNINHABITABLE
If your apartment becomes uninhabitable due to a catastrophic fire or water damage, where will you go and who will pay for your temporary housing?
That’s right! Renter’s insurance will help provide a temporary stay at a hotel if your apartment becomes uninhabitable. As long as the claim is a result of a covered “peril”, the policy should provide for loss of use coverage.
#5: IT’S MORE AFFORDABLE AND AVAILABLE THAN YOU THINK
Like anything in life, you get what you pay for. Insurance is no different. So, purchasing a renter’s policy can’t ALL be about the lowest premium.
Many people believe they have a “great” insurance because their premium is inexpensive. However, they’re only fooling themselves! When price alone drives individuals to purchase a particular policy, it almost NEVER equates to being adequate for their specific needs.
My goal is to help clients reduce their insurance costs. At the same time, each policy owner should understand what they’re actually buying. Unfortunately, due to the influx of companies marketing to the public directly, coverage decisions are often being made by uninformed consumers, which can lead to potential issues down the road.
There are no stupid questions, so always reach out if you have a question about your policy.
NOTE: The landlord’s policy is not going to cover your damages.
Remember, landlords are only responsible for insuring the building. They’re not responsible for insuring your possessions. Accidents happen! And if it does, you want to have a renter’s insurance policy in place that will cover your temporary stay, replacement value of your furniture, and compensate you for the loss of your possessions.
The biggest mistake you can make is not getting any insurance.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.