Renters Insurance Tips – November 2016

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Renters Insurance Tips – November 2016

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Do you rent a house or apartment? If you do, chances are the l andlord required you to get Renters insurance. Sure, you got some old policy, but do you know what it is you have? Would you purchase it if you weren’t forced to in the first place? This week Karl Susman speaks with Maureen about her “friend” who had a very unfortunate experience that would have been taken care of if she only had Renters insurance.


Karl Susman: Hi there. Karl Susman here. Thanks for downloading and listening to this week’s podcast. This week we have our generic per insurance consumer out there, Maureen, on the phone with us. How are you today?

Maureen Durocher: I’m great, feeling super generic. How are you?

Karl Susman: Feeling super generic. Well, then, our goal is to get you as un-generic as possible to educate you in the exciting world of insurance. Now, if we can make insurance exciting, we should be able to do anything. Isn’t that right?

Maureen Durocher: I agree. I agree.

Karl Susman: Okay, great. This week, we are going to talk about tips and information on renters insurance. So, I’ll ask you, I’ll just open it up to begin with. When you hear renters insurance, what’s the first thing that comes to your mind?

Maureen Durocher: To my mind, the first thing is that I have to have it. I currently live in an apartment. And the minute I signed the lease, they’re like, “You have to have it.” And I’m like, “Okay, I have to have it.”

So I think, for me, it was just… Well, actually to be totally honest, when I signed the lease, there was a little sign that sat on the agent’s desk and it said, you know, use those renters insurance. And I did, because it was sitting right there.

Karl Susman: Interesting.

Maureen Durocher: Yeah. So I just signed up with the one that was there and paid the monthly fee. But it was an online experience again that said how much do you think you need covered, and you clicked the box that tells you what you owe, and you pay from there. So that, to this point, had been my renters insurance experience.

Karl Susman: Interesting. So you purchased renters insurance not necessarily because you thought you wanted it, but because when you rented your apartment, they told you had to have it. Is that a fair assessment?

Maureen Durocher: Correct. Yes.

Karl Susman: So let me give you an idea of some of the things that renters insurance covers, because a lot of times, most people are like you. They say, “Well, I’m living in an apartment. I don’t need renters insurance. What do I need insurance for?” Right?

Maureen Durocher: Right.

Karl Susman: But there are a lot of things that renters insurance covers that you probably didn’t realize you wanted to have coverage for.

The first thing is, so you move in to your apartment. And what do you do? You move your stuff in. So, all of your stuff, everything from your computer to your furniture to your pictures – believe it or not, even your pets – everything that’s not in the apartment when you first move in that’s there once you move in is all considered your personal property.

So in the event that there’s a loss… And a loss could be anything from a fire to a pipe breaking in the wall and damaging your stuff. It could even mean someone that breaks in to your car and steals your personal property out of your car. If it’s personal property that normally resides in your apartment, all of these things should be covered under a good renters insurance policy.

So I would guess, you probably have a fair amount of money invested in your stuff. But let’s even just think of some of the more expensive items like your computer or your phone. Or, can I be horribly sexist and say your clothing? Maybe you spend a lot of money on that.

Maureen Durocher: [chuckles]

Karl Susman: And in the event that any of those things are damaged or stolen, you’d basically have to go and pay to repurchase them. A renters insurance policy would actually pay for you to repurchase those things in the event they are damaged or stolen.

Is that something that you are aware of? Or, is that sort of news to you?

Maureen Durocher: I knew that that’s why the policy exists – to pay if something happens to your stuff. But I didn’t… Your clarification of anything that wasn’t done in the apartment prior to you moving in now becomes covered under that, under a good policy. That was your keyword, under a good policy. Because I’m unaware of what’s covered if I only signed up online.

Karl Susman: Right. Well, that’s again, when you sign up online, you’re not really talking to anyone and no one’s taking the time to educate you.

Maureen Durocher: Right.

Karl Susman: So, take advantage of this podcasts and you’ll be able of this stuff.

But, again, renters insurance is, it’s not just a matter of your stuff. We’ll get to it in a second. But you’re right, everything that wasn’t there that becomes there after you move in… That didn’t sound right. But all of your stuff is part of your personal property.

And again, what’s significant is, it’s not just a matter of, “Okay, my stuff’s in my apartment. It’s a high-rise. It’s secure. I’m not worried about people breaking in.” Blah, blah, blah. That might be true.

However, having said that, do you know that the number one claim on renters policies, it’s not for people breaking in and stealing stuff? It’s for damage by water. It’s called non-weather water.

So that could be toilet overflowing maybe in the unit upstairs. It could be a pipe breaking in the wall. Now, all of a sudden, you’ve got three or four inches of water in your apartment. Or, maybe there’s a pipe that breaks and it just sprays all over your furniture.

All of those things will be covered under a renters insurance policy. And one of the reason your l andlord of the apartment building is requiring you to have it – only one reason, we’ll get to the other one in a moment – is because they don’t want you going after them if there’s damage to your property because of a loss. They don’t want you to turn around and come to them and say, “Hey the pipe broke. Pay me.”

Maureen Durocher: I see.

Karl Susman: They want to be able to shift that responsibility and say, “Yeah, pipe broke. Yeah, it’s our problem. It’s our building, but this is why we managed to force you into buying renters insurance. Go claim it from the insurance company there and leave us alone.” That’s one of the reasons they want to be sure you have coverage.

Maureen Durocher: Right. Because that’s literally, you know, no keys till you show proof of policy, “Okay, you got it. Here you go. Now, you can move in.”

Karl Susman: Interesting. No keys without policy. I like that.

So that’s one of the main reasons that they’re doing that. Another reason that it’s… Another type of usage case – and I’ve already alluded to it and most people aren’t aware of this – that their personal property is covered when it’s out of the apartment as well. The most common usage for that is when people are on vacation. Or, when they leave something in their vehicle, if it’s stolen from there, then they’re going to have coverage potentially on the renters policy there.

Did you know that your personal property is covered whether it’s on your apartment or in your car, or when you’re on vacation? Or, is that news to you?

Maureen Durocher: That’s absolute news to me. I had no idea.

Karl Susman: Well, hopefully, you were the carrier. If not, we know you will be soon. But hopefully, you were the carrier that offers that coverage.

Maureen Durocher: [Laughter]

Karl Susman: Usually, it’s called personal property away from premises. Usually, it’s a percentage of your personal property. So, for example, if you have $50,000 in total personal property, when you add up your furniture and your clothes and your computers and – wow, I was just going to say stereo but that’s probably dating me – if you add all of that up, then a percentage of that, usually it’s 10% it’s covered away from the premises. So, in that case, you’d have $5,000 in coverage for things that are away from your house or your apartment. So that’s a major coverage factor that you want to have.

Another main part of renters insurance – and this is probably the number one reason that your l andlord requires you to have it – is the liability coverage. Were you aware that renters policies come with liability coverage? Or, is that sort of news to you?

Maureen Durocher: That’s news as well. Yes.

Karl Susman: Wow, I’m actually surprised. I thought you’re going to say you were somewhat familiar with liability insurance on a renters policy. But let me tell you what it’s for.

So let’s just say you’re out and about. Maybe you’re going to the airport. I seem to like vacation analogies, I’m not sure why.

Maureen Durocher: [Laughter] Kind of take a trip.

Karl Susman: Yeah, I like that direction. So, let’s say you’re at the airport and you put your suitcase down. You’re walking over to print your boarding pass, and somebody turns around and trips over your suitcase and breaks their arm. Not unreasonable. It doesn’t sound like something that would be impossible to have happened. And they sue you. That’s sadly what happens.

If you have a renters policy that has liability coverage, as long as it’s personal liability and not premises liability… Again, you know, in the big parenthesis. Hopefully, you’ve spoken to your agent or broker about it, so they’re giving you the right thing. Then, your renters insurance liability will cover you for that liability and cover you for that lawsuit that’s coming against you and for the damages and for the injury and the pain and suffering and all the heartache that you’re going to get from this guy that just happen to back up over your suitcase.

Maureen Durocher: Seriously, that’s news to me. I mean, I’ve seen silly things like that happened. It’s not silly when someone gets hurt, but things like that happen in grocery stores, the airports, and whatever the case may be, and it never occurred to me that that can be something from your renter policy.

Karl Susman: Yeah. Liability coverage is a big one. Now, let’s say you’re in your apartment and you’re having a party – you would never do such a thing – but let’s just say that you’re in your apartment and you’re having a wild party, and somebody gets hurt. It could happen.

Maureen Durocher: Right.

Karl Susman: Maybe they’re wrestling and they’re just getting a little rowdy. Maybe somebody trips or slams their thumb in the door, whatever it might be. And, again, the renters insurance policy is going to give you coverage for people that are injured in your premises as well.

Again, you never think about it until it happens. But because you are renting, and so nobody thinks that they have any exposure but they still have that liability exposure even if they have people that are friends.

I’ll give you an example. I had my niece, actually, many years ago was at our house. And she was just running, tripped and fell. And she chipped a tooth. Of course, she doesn’t want to sue me. It’s my sister’s daughter. Nothing like that. But she had to get… Fortunately it was baby tooth, so that was okay. They capped it till it fell off. But my homeowners insurance liability which is no different than the renters liability picked up, and took care of the dentist, took care of the cap, took care of all of that stuff.

Again, it’s not necessarily that you’re doing anything wrong or you’re not a careful person. You have exposure and liability that comes with the renters policy or the example I just gave. A homeowners policy is there to protect you. And it’s super inexpensive.

Let me actually…

Maureen Durocher: I…

Karl Susman: Yeah, go ahead.

Maureen Durocher: I was going to say the story that you’re telling, that’s not far off from something that I experienced as well. I’m talking about the liability of what happens inside your apartment or the place you’re renting. That part makes sense to me than knowing what happens outside of it. That’s definitely news to me.

But inside, I didn’t realize it would cover that much. Because we always think, “Oh, if someone gets hurt in my place,” you’re not worried that others going to sue you without thinking about there’s another option and make sure their expenses are covered.

Karl Susman: Right. Lastly, what I wanted to point out about renters insurance is that the cost factor is negligible.

So, I’ll give you an example, depending on what type of a building – or don’t forget, you might not be an apartment renter, you might be renting a house, it just depends – but, generically speaking, a renters insurance policy that’s going to give you personal property coverage like we’ve talked about, liability coverage like we’ve talked about and a bunch of other things that we haven’t talked about, you could be looking at a premium of $400 a year. That’s it. Not a lot of money at all.

Maureen Durocher: No. Yeah.

Karl Susman: And the number one reason that people don’t have it like we talked about initially is because they don’t think they need it. They don’t think they have to have it. They don’t think that it’s necessary. And at that type of a cost, why in the world would you go without it? Truly.

Maureen Durocher: Right, absolutely. And deferment doesn’t make sense for sure.

Karl Susman: No, it doesn’t. Not for that cost. Plus, like we talked about since… In a previous podcast, we talked about auto insurance and saving tips on your auto insurance premium. You know that sometimes depending on the cost of your auto insurance, since you’re able to get a discount on your renters and your auto insurance together, sometimes the cost of the renters insurance can even be offset completely by the discount you’re getting on your auto insurance.

I’ve seen that happen almost completely, where it was a very expensive auto insurance policy. There was a person with some driving history. We call them – what’s the word, I just forgot it now – unlucky drivers. We don’t call them bad drivers. We don’t call them bad drivers.

Maureen Durocher: [Laughter] I hope not.

Karl Susman: It was either unlucky or unfortunate, or whatever it might be. So, the auto insurance premium was relatively high. And we added a renters insurance policy for her. And that cost was almost entirely absorbed just because of the amount of money she was saving on her auto insurance policy, by bundling them together.

Maureen Durocher: Wow.

Karl Susman: So in her case, she darn near got coverage for free for renting just by adding the two policies together.

But we’ll talk about bundling policies together in another podcast later on. Now, at least, you can have an idea that not only is renters insurance inexpensive, but it covers an awful lot of things for that amount of premium for sure. And if you’re a renter…

Maureen Durocher: Yeah, so many things.

Karl Susman: Yeah, you don’t have to be a homeowner to have coverage for your stuff and to have liability protection as well.

So what’s your takeaway from today?

Maureen Durocher: That it’s not one of those, “Okay, you just have to have it so you can move in.” It’s something that you need but you also should want to have it. That’s definitely the takeaway.

Karl Susman: Sure. It’s funny because now you underst and why the l andlord is m andating you to have it and somehow you feel like when you’re forced to do something, it’s never to your benefit. But, in this particular case, it’s to their benefit but it’s also very much to your benefit.

Maureen Durocher: Yes, absolutely.

Karl Susman: So, okay, that’s going to do our show today on renters insurance. And again, I thank everyone for listening. Feel free to subscribe to the podcast if you haven’t already and we will speak again next week.

Maureen Durocher: Sounds good. Thank you.

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