Quick Quiz

Who can be held legally responsible if the pizza delivery guy trips over your bicycle and is injured in the entranceway of your apartment?

1. You
2. Your landlord
3. The pizza business
4. The bicycle manufacturer

You are responsible for reparations to anyone who is injured by you or your belongings if that injury takes place on your property, even when you’re renting. Reparations can include paying for the injured party’s medical bills and loss of income.

You’ll also have to pay to defend yourself against a lawsuit resulting from damages suffered by others on your property or for which you may be responsible. Your landlord only is responsible for damage to the building or for damages that are a result of his/her negligence—not for protecting your belongings or defending you against liability.

Don’t think your belongings are worth enough to insure? Even the tiniest studio apartment can hold thousands of dollar’s worth of personal property. Renters insurance is one of the most overlooked and inexpensive forms of insurance.

You’re liable to need insurance

Renters insurance protects you and your personal property in three very important ways:

1. Liability insurance provides coverage for all sums that you are legally obligated to pay as a result of a suit or claim by others that are injured by you or your:

• belongings (excluding your automobile)
• family members
• pet(s)

• fire, lightning or smoke
• theft, vandalism or malicious mischief
• windstorm or hail
• explosion
• riot or civil commotion
• damage from aircraft, vehicles and falling objects
• plumbing-related water damage
• electrical surge

3. Additional living expense coverage provides you reasonable reimbursement for expenses above normal rent in the event your home or apartment is uninhabitable.

I got plenty of nothing

Whether you are renting your first studio apartment or the penthouse of your dreams, you probably have collected more personal property than you think. A computer, sound system, TV/VCR, mattress on the floor, and the most basic of wardrobes can add up. You will want to be able to replace these items should your home be burglarized or severely damaged.

Take the time now to create a home inventory to help you determine the value of your belongings, and to create the documentation you will need for the police, insurance adjustors and tax purposes in the event of a loss. The quickest way to create a complete home inventory list is to videotape each room and its contents, while narrating pertinent details for each item or group of items including:

• number of items
• year purchased
• purchase cost
• estimated current value
• unique qualities

If you don’t have access to a video camera, create a detailed list that includes the categories above and a written description of each item or group of items. Supplement this list with photographs of valuables and collections, as well as copies of sales receipts and appraisals.

It is important that you kept a complete copy of your inventory off premises in a safety deposit box or with a friend or family member.

What is it worth?

A good renters insurance policy is designed to restore your lifestyle to normal quickly and with minimal costs to you in case of a loss. There are two types of policies designed for this purpose: actual cash value and replacement cost.

Actual cash value policies pay the cost to replace your belongings after depreciation. With an actual cash value policy, you will be responsible for the difference between the original purchase price of each item and what it would cost to replace them at today’s prices.

A replacement cost policy takes into consideration what it would cost to replace your belongings at today’s prices. Premiums are usually higher for replacement cost policies.

Read your policy carefully, most renters/homeowners policies have strict limits on certain valuable items such as jewelry, art, antiques, electronics, silver, furs and collections. You may need to purchase additional insurance, called a rider or floater, to make sure those items are covered properly.

Not home alone

If you are planning to rent with a roommate, or roommates, each person will need to have his or her own renters policy. You can shop for a joint renters policy that allows each roommate to be included on the policy, but it can be dicey if one roommate moves out or a substantial loss occurs. In many states, one party can remove another party without consent and claims checks may be made out to both parties, regardless of whose property was damaged. Insurance company requirements and state laws may affect your ability to purchase coverage jointly.

That doggie in the window

Insurance companies have different requirements and restrictions regarding dogs and potential liability. Renters policies typically cover dog bite liability, however some companies may charge more to insure certain breeds that are considered more aggressive.

Most applications for renters insurance include questions about dog ownership. The company will want to know your dog’s breed, age and if it has ever bitten anyone or been trained as an attack/guard dog. If the dog has ever bitten anyone, the company will want to know the circumstances, severity and what precautions you intend to take to prevent the dog from biting again.

If all else fails you may be able to purchase an additional policy (or rider) specifically designed to cover dogs and their liability issues.

If you are currently renting or are planning to rent in the future, call us at 800-627-2241 to review your insurance needs.