For a good chunk of my past life I worked in the Insurance Industry.  For a while I was a successful agent for a very major company (think one that isn’t very friendly to Cavemen).  Shortly thereafter, I was the VP of Sales for a small but successful brokerage in Upstate New York.  I’ve dealt with my fair share of clients.  Sometimes someone is made about rates going up after a big claim, or maybe they’re explaining to me why they haven’t made their last few payments and asking how to avoid cancellation.

But of all the things in my days in the insurance industry, nothing was sadder or more heartbreaking for me then the aftermath of an accident for someone who didn’t carry enough (or any coverage).  And while automobile and home claims could certainly rack up some hefty costs, it was the renter’s claims that hit the heart the most.  For some reason it seemed to get at me.
More often than not, renters fell into a couple of categories.  Sometimes they were young, fresh out of college just getting used to having an apartment.  Occasionally they were middle aged families, but without the capital or credit to purchase a home.  Every now and then they were retired and older, downsizing to an apartment.  But for some reason, when a renter wasn’t covered, it really tugged at the heartstrings.

Whenever someone asks me “Do I really need renters insurance” I usually tell them one of the horror stories that I’ve included below.  In the interest of protecting the innocent (and underinsured) I’ve changed the names.

If Ned Ryerson from "Groundhog Day" slipped and fell in your apartment, would you be covered?

1.     There was this guy, we’ll call him Mike.  Mike was a young buck, straight out of college.  He played Div I football and we always got to talking about it. He was a nice kid and very personable.  He had his auto policy with us.  One day, pretty early, I got a call from Mike.  He wasn’t his normal self so I asked him what was up.  He said that one of his friends was suing him and he asked, somewhat naively, if there was anything that I could do for him.  It turns out that he had his friend over to hang out and play some Playstation.  They had a couple of beers, as young men tend to do, and Mike’s buddy got up to go to the bathroom.  On his way in, he managed to slip on some standing water and took a pretty nasty header.  Went to the hospital in an ambulance.  Shortly thereafter the friendship ended when the litigation began.  The cost of the medical bills alone was pretty hefty. It was a big hit for a guy in his 20’s.  My answer to his question about if there was anything I could do for him was pretty standard, “There’s nothing I can do for you now except talk to you about protecting yourself in the future.”  If Mike had purchased a standard HO-4 Renters policy, he would have had liability coverage and probably more than enough to take care of his former friend’s injury.  Unfortunately,  he didn’t and he was left footing the bill himself.

Not a good thing to leave out at a party.

2.    I had a discussion on a few occasions with a nice young couple who for this article we’ll call Tony and Tina.  I tried to talk to them about renters coverage, I even tried to entice them with a multiple policy discount.  Time and again they shrugged it off.  About a year or so after our first meeting, they came in to pay the premium on their auto policy and Tina looks at me and says “You know, you were right.  We should have gotten a Renters Policy.”  I asked “Why, what happened,” knowing full well that it wasn’t going to be a pleasant story.  As it turned out Tony and Tina had a small get together at their place, which unexpectedly turned into a large party.  Everyone had their fun and a few small stragglers were offered a place to crash.  Upon waking the next day Tina decided to forget about the hangover and clean the place up from the previous night’s events.  She told me that within minutes she was back in the bedroom shaking Tony to wake up.  She asked him to come into the living room.  When he did he was shocked by what he saw.  They had been cleaned out.  The recently purchased television was gone, Tony’s Xbox was nothing more than a memory, and someone had even decided to go through the guest bedroom and made away with cash held in the desk drawer.  All tallied up, they figured that had lost about $1000 worth of cash and items.  Had they the forethought to protect themselves with a renters policy, they would have got back most or all of what they had lost less their deductible.

Seriously, you spend all that money on entertainment. WHY would you leave it uncovered?

3.    Lastly I leave you with a story of someone who DID have renters insurance, but didn’t have the full knowledge of what was covered.  Jack had come to me one day looking to make a claim.  He had recently purchased a nice flat screen T.V.  His neighborhood had a powerout as a result of an electrical storm.  Now Jack didn’t think to put a surge protector on his television.  When the power came back, without warning, the unexpected surge of electricity blew his television out.  When he came to my office that morning he was rather chipper, thinking to himself that he’d soon be made whole again.  The thing was, Jack never read the declarations page of his HO-4 policy. In that page it clearly stated that while he was protected from sudden and accidental damage from artificially generated electrical current , his policy did not include loss to a tube, transistor or similar electronic component.  So unfortunately, his claim was denied.  He was not going to be indemnified for his loss.  While this is standard, there was protection available.  He could have purchased additional coverage, commonly referred to as a “rider” for his electronics.  While it increases the maximum amount of restitution for electronic goods, it would have also included additional types of loss.  His was a case of having coverage in place, just not for the right losses.

So after I’ve told the prospective renter one of these stories I usually follow with “Yes, you most definitely have renters insurance.”   The truth is, HO-4, or renters insurance policies, are usually pretty affordable.  Depending on what coverages you select it could work out to a few bucks a month or even a few pennies a day.  And at the end of the day, with all that you now know, wouldn’t you agree that it’s worth it?