Is renter's insurance worth it?

In My Humble Opinion
1

Two of my friends were robbed recently, and so I’m paranoid and thinking about getting renter’s insurance. I have USAA, and they’re throwing out claims like “$10 a month for $50,000 worth of insurance” and stuff like that. What’s the deal?

Do they bone you on the individual pieces - for example, giving you $50 for a 3-year-old TV because that’s the “actual worth” rather than the $500 it would actually take for a new one?

What about stuff that’s hard to replace, like out-of-print DVD’s or records - do they give you the actual market value of the item, or just the “original” price? Who makes those decisions?

My main concern is that a good 85% of stuff that I’d be worried about having stolen would be hard and expensive to replace - we’re talking stuff that’s out-of-print, vintage, discontinued, etc.

2

I think renter’s insurance is a good idea - I had it as a tenant, and my daughter has it, too.

As to the specifics of the coverage, call an agent and ask. Doesn’t cost you anything to ask.

3

It depends on the type of policy you have. You can get “replacement value” coverage, which will pay you the actual cost of replacing stolen/damaged property and is usually slightly more expensive than coverage which pays you the current value of your property. If you have items of particular value, such as a coin collection, you might want to get a rider policy as there may be a limit on how much a standard policy will cover for such things.

I recommend getting it; the cost is negligible compared to the possible loss due to theft or damage (which will probably not be covered by your landlord’s property insurance).

4

Everyone that rent’s should have renter’s insurance. It is usually very cheap so the downside of not having it can be huge while the upside is just saving yourself a rather negligible amount of money. We had it when we lived in apartment. I never made a claim on it although I still think it was worth it. I can’t recommend a specific company but web searches or even a real-life agent may be able to help.

5

I have renter’s insurance now, but I didn’t have it a year ago when a pipe burst in the basement and ruined a good $2000 worth of stuff in my basement storage locker.

I kicked myself for not paying the paltry $12 (with a $100 deductible) a month I now pay. It would have paid for itself dozens of times over.

I like my State Farm agent, because he is a real, actual guy I can call on the phone to answer my questions.

Plus, most policies include coverage for external storage, and personal liability coverage of $100,000 or more, in case you have a party and someone trips on your rug onto your jagged glass shard collection.

6

There are some things out there where it’s not necessarily a bad idea to try to save a buck. Insurance is not one of them.

7

This is such a good idea.

The question with renter’s insurance you should ask is how much hardship will you suffer for the $20 or less you’ll pay a month? And then ask how much hardship you’ll have if you get burned out, lose everything, and have to try to find some place to sleep at night. (For me, I always phrase that question with the rider, in the middle of a snowstorm in winter - but I don’t know where the OP lives.)

The OP will have to make his own decisions about whether he wants coverage for theft, and at what level. ISTR that some policies have different replacement values for fire vs. theft.
As for not having enough insurance - that can be very, very costly.

MY grandfather owned his own tool & die shop. He used to invite his shop out to his farm for a 4th of July picnic. One year, one of the workers had much too much to drink, and snuck into the barn, and started joyriding on the tractor. It was one of the old, high center of gravity models. And it rolled, killing him.

My grandfather’s initial reaction was to tell the widow that he would make sure she got his pension, and that he would cover the college costs for all the kids, as well. She was inclined to take that offer, until someone hooked her up with an ambulance chasing lawyer. She tried to make a claim for wrongful death, to get even more, and when my grandfather talked to his insurance company - they were of the opinion that since their liability for personal injury was so low, it wasn’t worth it, to them, to fight the claim. They’d pay their share, and just walk.

My grandfather had to hire his own lawyers, and fight it on his own. He did win, but he was hugely bitter when he found out, after the event, that some neglible higher premium would have had the insurance company liable for something like 100 times their share - and his agent had never mentioned that to him.

So my grandfather also changed insuance companies and agents after that.
Don’t just look at the cost of the minimum coverage (IIRC most rental policies are pretty generous for the single person living alone, but take the time to make a real assessment of what replacement costs for you might be. And what your liability coverage should be.) ask what the cost for the next level of coverage might be, as well. It may well be that the OP is best served by the minimum policy, but take the time to make sure of that, before choosing to go with it.

8

I had a house fire in a rental home ten years ago. I was horribly under-insured, but without any insurance I can’t imagine how we would have made it. Even though I had nothing collectible or expensive, replacing an entire home’s worth of stuff is huge.

Sure, my living room was furnished in Early American Garage Sale, but try rounding up an affordable house full of furniture at a moment’s notice when you’re living paycheck to paycheck. With at least two sets of sheets per bed, and new pillows for everyone, and enough towels to get you between laundry days. The kitchen alone was astoundingly expensive to rebuild, we buy spices and pantry staples as we use them, same with cookware and baking pans and utensils, but starting from zero to “able to cook and eat actual meals” is a hefty jump.

I couldn’t even begin to replace kids toys, or movies and books and CDs that had accumulated, not that I could afford a new TV to watch movies on anyway… look around your home and estimate the cheapest replacement value of everything you see in the room you’re in. Have you got enough spare change lying about to cover everything at once?

Don’t forget that in the case of a disaster like my fire, my renter’s policy not only covered my destroyed property but also got my family into a place to live while the home was being rebuilt, emergency checks immediately cut for clothing and food, etc.

Yes, I think it’s foolish to not have insurance for your property, regardless of whether you’re renting or owning.

9

We were robbed last year. I lost a relatively new DSLR, a laptop, and some watches, and my wife lost most of her jewelry.

Thanks to renter’s insurance, I’ve got another relatively new DSLR and a laptop, and we’ve replaced some of the jewelry. (We’ll replace more in time.) Without renter’s insurance, I might have a new watch and laptop, but there’s no way in hell I’d have a replacement camera. And we got off lucky – the robbers didn’t take anything that they couldn’t cart away quickly.

So yeah, we’ve got renter’s insurance, and it was worth every penny. I only wish we’d chosen a lower deductible to start with.

10

We have it. I agree with ultrafilter. Insurance is way worth the premium.

11

Depends on what you own. If you’ve got nothin’ don’t buy it.

If your stuff is worth protecting, it could be cost effective.

Also, USAA, in my experience, is a very good insurer.

12

VCO3, you’re a musician, I believe. Me too. You need renter’s insurance. You should create a spreadsheet listing your equipment: make, model, serial number and cost to replace. Give a copy of this to your insurance agent when you ask for a quote, and update it if you acquire anything new after the policy is in place. This will help to ensure that the policy actually covers all of your stuff. You can get a policy that will cover your stuff even when it is not in your dwelling, like at gigs or in transit. If you have car insurance with a company that also does renter’s insurance, check with them about a multi-line discount.

13

Chiming in to agree - our renter’s policy was with Allstate. We got the full replacement value on things we chose to replace, and a small sum for those we didn’t. Riders are essential if you own collectibles, jewelry, furs (and probably for instruments).

Take pictures of your stuff. We didn’t even know what-all the burglars had taken until we got some of it back.

14

I work in rental property management. We state on our leases that each tenant must have tenant’s insurance and provide us with a copy and a paid receipt. Once that is in the files, we don’t follow up with renewals or cancellations.

Last spring a basement flooded and a tenant who had stored some things in the basement and signed a waiver that we were not responsible for her items pitched a real fit because she had let her tenant’s insurance lapse and she couldn’t get any money from our policy.

Tenant’s insurance is always a good idea.

15

To those who have used renter’s insurance to replace items: Did your rates go up afterwards? Did your carrier drop you?

16

How do adjusters value your stuff after a loss if the stuff is now completely burned or stolen (i.e., completely gone) and the renter had not made a prior inventory with photos or receipts? What’s to stop the adjuster from saying they won’t pay anything because the insured cannot prove they ever had anything to begin with? On the flip side, what’s to stop the renter from claiming up to the policy limits by claiming a loss of cash or some other valuable items that never existed?

17

Generally we (I’m an adjuster) take you at your word. Besides there are very few situations in which all your property would be totally destroyed. Very few homes burn to the ground absolutely destroying everything. Thieves tend not to take every scrap of furniture in a home.

In a run of the mill theft claim or standard house fire we’ll generally pay without a great deal of questions. If however the items claimed don’t seem to match the quality of the dwelling or the remainder of the property then we’ll ask a few more questions maybe even for proof of ownership. Most stores keep sales records for years. I’ve handled a number of house fire claims where the house was going to need to be knocked down and rebuilt but the contents while heavily damaged were quite recognizable, even down to serial numbers on computers. Massive natural disasters are another thing. Hurricanes, tornadoes, wildfires and other catastrophes are the exception not the rule.
Cash, jewelry and other small valuable items are subject to rather low limitations or sub limits within the policy. This is something people don’t often see and their agents rarely tell them. If you have your grandmother’s pearls or other high value jewelry make sure they are scheduled or else the company will only pay the sub limit of say $500 or $1000 on a $4000 loss. These limits apply regardless of any replacement cost coverage.

18

Ask your agent for a list of “exclusions”. These are the things that are not covered by the plain vanilla policy. Common examples are collectible coins, jewelery above a certain amount, guns, etc. These exclusions are not a source of concern for most folks but you need to know what they are to see if they affect you.

19

I always thought exclusions were hazards that were not covered–for example, damages arising from nuclear war or civil insurrection were excluded. At any rate, the idea of asking about all these kinds of things is sound: ask what is and isn’t included in the policy, and what hazards are and aren’t covered. Get lots of questions ready; an agent or broker will be willing to answer all your questions, but won’t necessarily bring specific things up unprompted (mainly because they don’t know your specific situation).

Someone above mentioned a rider to cover these things, and I’ll second that idea; but if this is stuff that is particularly valuable, rare, expensive, etc. you may wish to consider a separate policy for these items. Such a policy can be written for a specific value, as opposed to indemnifying you up to a maximum. I’ve looked into this kind of policy before, for a piece of art I’ve owned, and the price of such a policy was quite reasonable. Appraisals from qualified and recognized appraisers are generally needed, but such policies can be written–again, ask your broker or agent about them.

20

I always had renter’s insurance when I rented. It costs a lot to start from nothing. A simple exercise, just out of curiousity, walk out your door with what you’ve got on, stand on the sidewalk and think: this is all I have. The money in the bank and what I’ve got on my back. What is it going to cost me the rest of the day/week/month to feed, clothe, get to work, entertain and generally live? If it’s more than your quoted insurance premium per year, you have your answer.

In Ontario, if you wish a specific item insured, i.e. a priceless family antique, my insurance guy mentioned a good point of view (IMHO, anyway). “Canadiangirl, you are not going to replace it, it came from your family. Yes, it is an antique and probably worth money ($4,000 - $5,000). It’s $100 to appraise it and it will be insured separately at yet another cost. But, are you going to find a replacement? Probably not. And certainly not at what it’s appraised for. So, you should probably think about whether or not you want to pay an additional premium to cover that”.