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Renter's Insurance

If you suffer property loss as a result of burglary, fire, tornado, water leaks, lightning, or a power surge, you will need your own insurance to cover your loss. Your landlord's insurance does not cover your personal property.

You can buy renter's insurance for as little as $11.00 per month

Some students choose to be covered on their parents' homeowner's insurance. Often, that policy will NOT cover hotel stay if fire forces you from your home and may not provide other coverage such as liability if you accidentally started the fire. If you are considering coverage through a parent's policy, check with the insurance agent about the scope of coverage.

REPLACEMENT COST

How much will it cost today to replace property stolen by a burglar or damaged by fire? The cash value or depreciated value of your property is much less than the replacement cost. It is wise to buy insurance that pays replacement cost instead of cash value.

LOSS OF USE

Some policies include a dollar limit of $2,000 or $3,000 for hotel bills if fire forces you from your home. Many policies will cover hotel stay for the shortest period of time necessary. Check your lease to see how long you have agreed to wait after a fire for your landlord to make your apartment livable again. Most leases say 30 days, but some have 45, 60, or even 90 days. Be sure your "loss of use" coverage is enough money to pay for replacement of all of your damaged property plus a hotel for the amount of time you've agreed to in your lease, plus a few additional days to shop for a new place, in the event that the landlord is unable to make the place habitable within the time specified in your lease.

DEDUCTIBLE

This is the amount you pay before the insurance company will cover a claim after a burglary, fire or some other covered calamity. Most renter's insurance policies have a deductible of $250 or $500. A few also offer $100 deductible for a higher premium cost. Usually, your premium (the amount you pay for the policy) is higher if your deductible is lower.

AMOUNT OF COVERAGE

How much would it cost to replace everything you own: computer, television, VCR/DVD, CD-player, clothing, books, bicycle, etc.? Add the cost of hotel in case of a fire, and that would be the amount of coverage to buy. Most young tenants who rent furnished apartments and do not have a lot of property buy a $10,000 or $15,000 policy. If you own your own furniture or have more than one computer or own other expensive items (jewelry, big screen TV, many oil paintings) you may need a $20,000 or $25,000 policy. Remember to calculate the cost of hotel stay for the amount of time equal to the grace period in the fire clause of your lease. Add to that the cost of replacing everything you own and that is the amount of coverage you will need.

WATER LEAKS

Be sure to ask your agent if damage to property from roof or pipe leaks or other water damage is covered. Other than fire and burglary, the most common complaints to Tenant Union about property damage involve water leaks.

SEWER BACK-UPS AND WATER SEEPAGE

These are often exempt from a standard policy. If you are renting a basement apartment or house with a basement, you may need to purchase an additional rider to your policy to cover damage from water seepage or sewer back-ups. Ask your insurance agent about coverage for these problems.

BUYING INSURANCE

The Tenant Union does not recommend any specific insurance policy. Check with a few agents to see what policy options they offer and compare costs. You may be able to get a small discount on insurance premiums if you buy both auto and renter's insurance from the same company. Following are names (these are not recommendations) of several insurance agents in the Champaign-Urbana area who sell renter's insurance.

All phone numbers are area code 217

 

 

The Tenant Union does not provide legal services of any kind. All information provided in this publication is intended to help the average person prevent problems and deal with common concerns of renting. When legal help is needed, always consult with an attorney at law.