3 Things to Know Before You Buy Renters Insurance

By Daniel Olson - Insurance Dodo

Published on June 26, 2020

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“If you can’t afford the premium, you can’t afford the claim”... Dang! That is truth.  

I was sitting there, in a class for insurance agents, listening to my instructor talk about some type of coverage and I was about to pass out from boredom when she uttered those words…

In my 11 years as an insurance agent, I had never heard it put that way. 

The only way to have a firm financial footing in this life is by handling the risks that come with living.  

I recommend you start your journey with a free renters insurance quote by state.

Most folks don’t think this way and they feel like insurance is just a big waste of money.  

Something they “have to buy” because they have an obligation to someone else for something they’ve bought with a loan or leased (car, equipment, or a house).  

This leaves us with the fact that you aren’t usually forced to buy renters insurance.  

Most landlords don’t ask to see proof of insurance when they rent you a place, they just want to make sure you can pay the rent on time and your dog won’t pee on the carpet.  

This makes renters insurance somewhat unique.  You don’t have to buy it, it's just a really good idea.  

There are three things you need to keep in mind when you are purchasing renters insurance.

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Water Damage Can Be Painful To Your Wallet

Not long ago, my client, Jerome, called to tell me his upstairs apartment had flooded. 

He had been at work and after a long day, had returned home to find 2 inches of water covering his floor and running downstairs.  

Apparently, the angle stop on his toilet’s water supply pipe had failed and allowed a steady stream of water to flow for the past six hours.  

His bed, his couch, his entertainment center, and some of his electronics were all ruined.  

And he needed a place to stay that night.  

His renters insurance covered flood damage and was there to handle his claim.

Needless to say, Jerome was a happy guy.  

His neighbor, Trish, who lived downstairs:  wasn’t quite so lucky... 

The water from Jerome’s apartment flowed through the walls and through the ceiling into her apartment all day. 

Trish was a bit of a cat lady.  She lived with 5 cats and all their paraphernalia.  

She loved Buttons, Boots, Tiger, Swoosh, and Nips, sooo much and she could never imagine life without them.  

The thing she never considered was the need for renters insurance and what it would mean if she were to lose her apartment for an extended period.  

Trish came home from work that evening to find her cats marooned on her bed, which was fairly wet, along with most everything else in her apartment. 

She called her landlord, who said he was waiting on a remediation contractor to arrive and advised her to find a way to stay somewhere else that night.  

Trish started packing whatever was dry and had to come up with a way to get her cats out of the house and to a motel for the night.  

Unfortunately for Trish, the only place that would take 5 cats cost $300 a night.  Without renters insurance, this was a big hit for her.  

"The whole process was so simple. Other insurance companies need to step into the current century!"

She ended up paying $4,000 to stay elsewhere while her apartment was repaired.

This was in addition to the $3,400 she paid for all the items ruined in the flood. Ahhh Trish, if you had only paid the $20 a month for renters coverage, you would have been fine!

Earthquake and Surface Water Flooding:  Not Automatically Included

Insurance Companies typically want to cover claims that happen to individuals within a small geographic area.  

If an entire apartment complex burns down, they probably insure 2 or 3 of the renters within the complex at most.  

They are built to handle that kind of financial loss.  They aren’t typically built to handle a big event like a massive earthquake or hurricane-induced flooding of an entire county or state.  

In these events, all their policyholders would have the same claim at the same time.  

Remember:  insurance companies are in business to make money.  

They would go out of business if all their policyholders in Houston or Los Angeles had the same claim at the same time.  

If you live somewhere that has earthquakes (California).  

Or somewhere that has hurricanes or flooding (the South East or Mid West)... you will need to buy special insurance for earthquakes and for flooding from rain, river, or the ocean flooding your home.  

The oceans are rising!   A standard renters policy isn’t going to cover your stuff if the ocean comes in your front door next month!

Be sure to check on adding these additional coverages to your renter’s insurance policy.

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Bundle Up To Save Money!

Your auto insurance company wants you to buy more than one line of insurance from them.  

They really want to give you a discount for doing it.  

It's not just because they are nice, they know that if you buy two or more lines of insurance from them, you are likely to remain their customer for seven times longer.  

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Pro Renters Insurance Tip

Renters insurance doesn't just cover the replacement of your belongings, but also protects you if someone gets hurt on your property.  Limits usually start at $100,000.

Everyone knows it's better to keep a customer long term than to try and constantly attract new customers.  

So it's a win-win.  You get renters insurance and a discount on your auto insurance.  

They get a customer who is more likely to stick with them.  

These can be pretty significant discounts too:  15% in some cases.    

This discount almost pays the cost of the renters policy.

So remember:  if you can’t afford the premium, you can’t afford the claim!

Be safe! 

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