Tuesday, May 20, 2014

The Importance of Rental Insurance

Several weeks ago, I was at Lincoln Center hanging out in the plaza in the early evening. While there, I heard what sounded like a pack of firetrucks head uptown, but it wasn't until I walked home and saw a pile of flashing lights that looked very close to my own block that I worried for my building. I called home to find out if everything was okay, and as I drew closer, I realized the fire all those trucks were called to was just the next block from mine.

Later, I heard that while thankfully no one was hurt, once the fire was out the tenants were given just ten minutes to collect what they could from their apartments before having to leave the building for what will probably be months. I feel terrible for them, and it made me think of a few friends and their stories.

On Christmas Eve, my co-worker's garage caught on fire. It was attached to the apartment he rents, but was put out before the flames got to his apartment. He only lost some seasonal items stored in the garage.

Four years ago, a friend's Lower East Side apartment building caught on fire. She was in London at the time, and came home to a condemned apartment building. When the fire department let the tenants in to collect a few things from the building, everything inside, while fortunately intact, was still smoke damaged.

Quite recently, another good friend received a phone call at work from her landlord -- the apartment above hers had been on fire with tragic results, and the fire department called to request she open her door to check her apartment for water damage so they wouldn't need to break the door down. When she arrived, the fireman warned her that the water damage could be quite extensive, which it certainly was to the apartment, if not to any of her belongings.

New York being a city of renters, all of these fires were in rental buildings. While most tenants were lucky, it certainly shows that rental insurance is important to have. Many people don't know that a landlord's insurance is extremely unlikely to cover a renters' possessions, making it an important protection to add. And besides covering fire (clearly a worrisome event), it usually covers theft and other types of damage as well.

In the past, I avoided renters insurance because I thought it would be too expensive to add to my monthly bills, so was surprised to find that it is actually quite affordable: We pay less than $35 per month. Once we made the jump and began paying for it a few years ago, something else that surprised me is that renters insurance often covers items stolen outside the home, such as bikes.

Finding an insurance company can be a daunting task, and renters insurance may feel even more overwhelming as it is often the first type of insurance a person has to seek out on her own. Considering that, I was very pleased to see this breakdown recently on The Simple Dollar. Using the direction Trent lays out, it makes signing up for renters insurance so much easier, and is worth sharing. Needing to use renters insurance is a terrible thing, but having it absolutely makes sense as a protection against the unforeseeable.


  1. I'm actually stuck with some rental insurance issues. You see I am from Australia but was handed a property from my wife's family from the US after they passed away, and I am seeking for an insurance policy to cover the new property. I don't know if I can get a policy if I am from Australia, and what should I do to the people that lives in it because I am thinking of renting it. I tried searching for a broker near the property (I was using http://insurance-agents.findthebest.com/ -- is this a trustable website?) but the quote was outrageous. So I looked for a broker in Australia (I used http://allinsurancebrokers.com.au which is where I found my previous broker) that also has relations in Michigan, but so far I"m only getting missed responses if I can merge my policies together. What are you thoughts of this?

  2. I am not an expert on insurance, but if you own the property, I don't believe renter's insurance is what you are actually looking for. Renter's insurance is taken out by someone who rents in order to cover his belongings, not the building -- it is a supplement to what the owner of the building already has, so in your case, you need to cover the building.
    I'm not familiar with the website you listed, so my suggestion would be to go to the individual websites of several insurance companies and compare the (free) quotes they give you, then compare the coverage included. I know a few people who have gone through brokers, but you certainly can do the leg work yourself by getting online quotes.


"There's only one rule that I know of, babies -- God damn it, you've got to be kind."
-Kurt Vonnegut