Article: House / Apartment
Insurance 101 - Part 4

Part 4 - Jump Menu

I am a renter, not a homeowner. Do I need insurance? Isn't my apartment covered under my landlord's policy? How are prices determined for renters insurance? I live in an apartment with three roommates. Do we each    need a policy? I own a condo. How is my policy different?           (this is the end of the House/Apartment Insurance 101 Article Series) Also See Intro - Terminology - House versus Apartment; General      Notes; Our Help; Topics in Upcoming House / Apartment      Insurance 101 articles Part 1 - Need for home insurance (two reasons why you really need      insurance for your home); insurance included with the mortgage      payment; about property and liability coverage; what is usually      covered; catastrophe coverage (e.g. floods); other exclusions. Part 2 - Who decides property worth; amount paid for property     damage; coverage for property while on vacation, for tenant's     property and for my mother's belongings - she lives with us, what     about our vacation home. Part 3 -I work out of my home - coverage for my business property;     with catastrophic loss, where do I start; why does the insurance     company need the location of the nearest fire hydrant; what I     can do to lower my premiums; who watches the insurance     companies; steps to take when property is damaged or stolen;     what if I am found liable for personal injury

I am a renter, not a homeowner. Do I need insurance?

The same rule of thumb applies to renters as to homeowners. If catastrophe struck tomorrow, could you afford to replace everything you own? Or if you were sued, would you have enough money to pay legal fees and possibly settle the suit? If not, chances are you would benefit from the protection that renters insurance brings.

Renters insurance offers the same general personal property coverage and liability protection as a homeowners policy. Thus, your camera is insured while you are on vacation, and you are covered if your grandfather clock crashes into the apartment lobby's wall and leaves a gaping hole. In fact, most policies are surprisingly extensive and may include additional living expenses (also called loss-of-use coverage) if you are forced by fire or other damage to live elsewhere.

Isn't my apartment covered under my landlord's policy?

No, the landlord's insurance covers damage to the building and the landlord's property, not your personal property or liability. Plus, you may be liable for damage to the building if it is your fault. If you go out and leave the stove on and an ensuing fire causes extensive damage to the entire building, you may be held liable to the landlord.

How are prices determined for renters insurance?

Renters insurance is surprisingly inexpensive. That's because you are not insuring a building. Like all property/casualty policies, the value of your property to be insured and other risk factors are weighed by the insurance company to determine your premium. As your your Trusted Choice^SM agent, we can help you find the best combination of coverage and cost.

I live in an apartment with three roommates. Do we each need a policy?

Check with us, your Trusted Choice^SM agent. Usually, it is best if all roommates are on the same policy although it is possible for each to purchase his or her own coverage. If you do need to "go it alone," you alone receive the security of renters coverage.

I own a condo. How is my policy different?

Condo owners insurance covers the same general areas outlined throughout this guide for homeowners in the important areas of personal property and liability. In addition, condo owners insurance provides coverage for some situations specific to condominium unit owners.

Usually, the condominium association buys insurance to cover the property (building and structures) and liability coverage for the general association. If you own a condominium unit, you may be responsible for covering from the "walls in" on your unit, that is, for your personal property and the interior of your unit (whatever area is excluded from the condo association's policy) as well as for your personal liability.

Sometimes, condo owners are assessed by their condo association for losses "outside the walls" that were not completely covered by the association's policy. For example, if the clubhouse is destroyed and the condo association did not have it insured, you could be assessed for a "share" amount needed to replace it. If you wish, check with us, your your Trusted Choice^SM agent, about adding such "loss assessment coverage" to your condo owners policy.

Part 3

Date Posted to Site:   Dec. 2004

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