It took a fire in a nearby apartment building to convince Cecilia Garza that she needed renters insurance.
“I realized that I could lose everything,” she says.
That was about seven years ago, and she’s had a policy ever since. Last April, she was glad she did when another fire, this one in a neighboring unit, caused soot and smoke damage in her Gaithersburg, Md., apartment.
“It destroyed pretty much everything that had fabric — couches, curtains, clothes,” says Garza, 31, who now works in customer service at Allstate’s Silver Spring office. “All of the carpeting had to be replaced.”
Thanks to Garza’s renters insurance, she was covered and got a check in a few weeks to replace her damaged items. For Garza, an upfront investment of less than $200 a year in a renters insurance policy really paid off when she needed it.
As with any type of insurance, you could pay for renters insurance year after year and never need it. While some renters see it as a waste of money, those who end up needing it say they are grateful they had it.
According to a May survey by the New York–based Insurance Information Institute, only 31 percent of U.S. renters buy renters insurance.
“A lot of consumers are under the misconception that their landlord’s policy will provide coverage for them, and that’s not the case,” says Loretta Worters, the institute’s vice president of communications.
Your landlord’s insurance takes care of any structural damage to your apartment as the result of a fire or even some wild weather. It won’t, however, pay to replace your killer shoe collection or massive media center. That’s where a renters insurance policy comes in.
Renters insurance doesn’t just take care of your stuff. It protects tenants from a few kinds of liability. For example, if someone trips and falls in your apartment, leading to expensive medical bills or even a lawsuit, your policy would provide you with coverage.
It could also be a financial lifesaver. “Say you left the stove on and caused a fire,” says Raynold Mensah, an agent with State Farm in Bethesda (301-656-2600, Raymensahinsurance.com). “Any damage caused to the building would be your responsibility.”
Renters insurance also helps you pay for a place to stay if you are displaced from your apartment by something like a hurricane or major repair — up to a point. Some policies place time limits on how long they’ll cover expenses of staying in a new place, such as six months or a year, while others put a cap on how much they’ll shell out.
How much should you expect to pay? A basic renters insurance policy — with $10,000 in personal property coverage and $100,000 in liability coverage — costs about $120 a year through Allstate and State Farm. But even if you bump up both of those coverage levels, renters insurance should still run you less than $200 annually.
Certain amenities or apartment features can help bring that price down. Think of it this way: If it’s something that helps protect you or your stuff, make sure to let your insurance agent know about it.
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