Renters’ insurance is a small investment, given the amount of protection one gets in the event of theft, fire or other unexpected losses.ìYou’re trading a small amount of money against a large loss,î said Donna M. Skeith, a chartered property and casualty underwriter who works in the insurance industry in Colorado Springs. ìIt’s highly affordable, and it covers a wide variety of things.îRenters’ insurance differs from homeowners insurance in that an owners’ policy covers the structure. ìIf you don’t own, you just need to cover contents and liability,î Skeith said. It also differs from a landlord policy. ìTenant or landlord policies will cover owners who are not inhabitants,î Skeith said. ìIt covers the structure itself and limited types of liability.î The landlord’s policy would not, however, cover the contents or liability of a renter.Skeith said renters need to ask themselves, ìIf I had a loss today, could I replace all my goods tomorrow? If the answer is no, you need renters’ insurance.î Most renters’ insurance policies cover more than just the contents of the home or apartment. ìIf you do it through a normal agency, you will have coverage for your goods anywhere in the world,î she said. In addition to covering possessions anywhere in the world, renters’ insurance also covers liability. ìIf you own a pet and it bites someone, that’s your personal liability; and a renters’ policy gives you that coverage,î Skeith said.Renters’ insurance is also a good idea for students away at college. While the parents’ insurance might allow for some coverage, Skeith said, ìIt’s best to have something specific.îRenters’ insurance covers anything that is not physically part of the home structure. ìClothing, shoes, TV, electronics, dishes ó any household item or clothing item that is your personal property,î Skeith said. While renters’ insurance covers a wide variety of things, it is not all-encompassing. ìThere are certain exclusions. High dollar jewelry needs a policy of its own,î Skeith said. The insurance industry uses the term ìscheduledî for jewelry insurance. The insurance company calls out the jewelry piece by piece, and each piece has its own specific description. ìIt’s scheduled when you get that kind of information, and then the coverage is for that piece of jewelry specifically,î she said.Other exclusions include intentional loss, such as arson. Wear and tear is not covered, as well as inherent vice,î Skeith said. Inherent vice means the possession is more susceptible to loss, she said. ìLet’s say I have a ring and it had a crack in it. It makes the stone a bit more subject to breaking or falling out of the setting.îRentersí insurance also covers adjusted living expense. ìWe can give you someplace to live, if something happens to your home,î Skeith said. ìLet’s say I’m renting an apartment; and, for some reason there’s huge water damage and I can’t be in it for a little while. Where would I get the money to rent a hotel room for four to five days while they fix the damage? It’s just another coverage. It comes with the renters’ insurance policy, and is another great reason to have it.î Kevin Koenke, a State Farm agent in Falcon, said that State Farm’s adjusted living expense is two years, with no maximum cost. ìWe don’t put a dollar amount on it,î he said. Koenke said that in the case of the Black Forest fire, people could have seen their rent go up overnight, but they didn’t need to worry about it since it was covered by the adjusted living expense portion of the policy.The cost of renters’ insurance itself is minimal compared to homeowners insurance coverage. ìThere are a couple things that can impact how much you pay,î Skeith said. ìIt costs more to have $100,000 in coverage versus $10,000. Having a history of losses can make it more expensive.î Skeith defined insurance loss: ìIf you have a policy and you left your bike out front and it was stolen ó or left your car unlocked. If you have a history of losses that could have been prevented and you aren’t a good steward of your own things, your recent past is the best predictor of your future losses. Itís a history of losses where you had the ability to curtail the loss but you didn’t.îIf someone can’t afford to insure everything they have, they should cover what they can afford, Skeith said. The average renters’ insurance policy is about $15 to $20 a month, she said.Koenke said most people can afford renters’ insurance. ìIt’s very good coverage at minimal price,î he said. ìWhat I’ve run across most would be people who live with family; they feel the homeowners’ policy will cover their stuff ñ- which it will ñ- but you have to hope that the owners of the home will give you the money to cover your things,î he said. ìThey are relying on someone else to give them money when they haven’t paid any of the premium. A renters’ policy is a great way to know that you are covered because it’s your policy and not someone else’s.îWith State Farm, the renters’ insurance policy can be as low as $4 a month, Koenke said. ìIf you have an auto policy and add on renters (insurance), you get a discount on the auto policy,î he said. ìWith more than one auto, it’s possible that the renters’ policy won’t cost any more because of the discount.îSkeith said many people just don’t think ìitî will happen to them. Typical causes of loss include fire, theft, vandalism, wind and hail. ìLosses happen,î she said. ìIt’s a bad bargain not to have insurance. If you’re not lucky, you better have insurance.î
