When we ask clients who live in rental units why they don’t have renters insurance, the most common answer is, “I just rent, I don’t have anything to lose.” Of course, this couldn’t be further from the truth. According to the US Census Bureau as of December 2019, 25.5% of all family units in New Hampshire were renters and many of them rationalize going without coverage based on this misguided assumption.
There are three pillars of every good renters insurance policy:
- personal property coverage
- coverage for temporary living expenses
- personal liability coverage
Here we’ll share real-world examples of how every renter would benefit from having a renters insurance policy.
For our purposes, we’ll follow John and Jane, a married couple who live in an apartment complex in Laconia, NH with their dog, Bruno. What follows next is a series of unfortunate events.
Personal Property
Modern-day renters have valuable personal property to protect. Many folks think about basic items such as housewares, furniture and clothing. But what about tablets, computers, gaming systems, smartphones and sports equipment? All of these items add up! Renters insurance not only provides coverage for these items while inside your rental unit, but outside the unit as well as illustrated by the following situation with John and Jane:
Outside the Home
Jane asks John to run to the grocery store on his way home from work to pick up something for dinner. While John is in the store perusing the aisles, a thief breaks into his car and steals his gym bag containing his phone, expensive running shoes, and workout equipment. Thankfully, John has a renters insurance policy so his bag and its contents are covered even though they are outside his home, subject to his policy limit.
Inside the Home
John finishes filing his police report and thanks the officer, loads his groceries into his car, and heads for home. When he turns onto his street he sees a fire engine in front of his apartment building. Not good! Jane meets him in the street. A fire in a neighboring unit has left all of their belongings damaged by water and smoke! But because they have a renters insurance policy their personal property is covered up to their policy limit.
Additional Living Expenses
An often-overlooked coverage on a renters insurance policy provides for payment of additional living expenses, wherein if a rental unit is uninhabitable the insurance company will help pay for alternate housing arrangements while the unit is repaired or rebuilt, up to the coverage limit on the policy. Let’s check in again with the unlucky couple:
John and Jane are approached by the fire chief, who advises them that their unit is uninhabitable. Jane calls her insurance advisor who files a claim with their carrier. The insurance company sets John and Jane up in a hotel, at no cost to them, while their unit is being repaired.
Personal Liability
Renters insurance policies provide personal liability protection that follows the insured no matter where they are. In today’s increasingly litigious society, personal liability protection is a must for everyone regardless of net worth. Even if someone doesn’t have much money in the bank, courts can garnish wages to cover injuries or damages sustained by another party. Let’s follow up again with John and Jane:
John and Jane decide to try to put all of their recent trouble behind them and head up north for a weekend getaway. They load Bruno along with some new ski gear that their renters insurance policy replaced for them, and hit the road. Once they arrive at the ski resort, John heads right for the lifts while Jane takes the dog for a walk.
John takes off down the double black diamond but quickly realizes he isn’t quite as comfortable in his new skis as he anticipated. He slams into another skier who suffers a broken leg in the process. Thank goodness John’s personal liability coverage will pay for the skier’s medical care and rehabilitation.
Meanwhile, while on her walk, Jane encounters a group of kids who, in their excitement to meet Bruno, unintentionally overwhelmed him. The dog bites one of the children on the arm, breaking the skin. The child is sent to the local urgent care clinic to treat his wound. Jane is relieved to know that her personal liability coverage will pay for the child’s medical care.
“I just rent, what do I have to lose?”
The average rental insurance policy costs approximately $150-$200 per year. Let’s break down how John and Jane fared with theirs versus how they would have done without:
| With Renters Insurance | Without Renters Insurance |
| Renters Insurance Policy –$175/year | No renters insurance policy premium – $0/year |
| Replace Personal property (coverage limit of $50,000). Out of pocket cost is limited to the $500 deductible per occurrence. In this case, two claims come to $1,000 in deductibles. | Cost to replace personal property lost due to water damage and theft from John’s automobile, $50,000 out of pocket. |
| Additional living expenses (coverage limit of $15,000), no out of pocket cost to the insured party. $0 | Rent hotel for 3 months while apartment is repaired $9,000 (based on a room rate of $98/night) |
| Personal liability limit (with a coverage limit of $500,000). Cost to John and Jane- $0 | Medical expenses relating to John’s ski accident and the child’s dog bite $20,000 |
| TOTAL
Cost of policy is $175/year, plus a $500 deductible for each of the two personal property claims. John and Jane’s total expense would be $1,175 for all of the above incidents. |
TOTAL
Without renters insurance, John and Jane would have to spend $79,000 for the same incidents. That’s $77,825 MORE!
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Hopefully you never have as much bad luck as John and Jane, however, any of these real-world examples could happen to you at any time. Investing in renters insurance is a cost-effective way to protect yourself from a large unexpected expense, all for the same monthly cost as a movie ticket or a burger and a beer. That’s what makes renters insurance the affordable coverage that you can’t afford to live without!
Our local, trusted insurance advisors are happy to review your renters insurance needs as part of a comprehensive risk analysis and design a personalized solution for you! Please call, text or stop by our local office at 174 Court Street in Laconia, NH. For your convenience, we also offer online quotes. The Insurance Outlet is locally owned and operated.
