As a Stockbridge, GA family learned the hard way– renter’s insurance should be a priority, particularly with families. A fast-moving fire on July 3rd wiped out a row of townhouses, seven with total loss and a total of 14 townhouses affected.

Bill Liss, a reporter with NBC, interviewed Michael Betheas about the total loss of his family’s possessions.

“We had a chance to get it a few months ago and didn’t. I just encourage anybody that doesn’t have insurance to get insurance because right now I don’t know what I am going to do with my family,” said Betheas.

Renter’s insurance would have given them access to temporary housing and replaced their belongings up to the limit of coverage.

It’s a sad story, but it happens every day. It’s especially sad when it is possible to get renters insurance for as little as $100 a year depending on region and coverage limits. A good policy with replacement cost, water backup protection, and high liability coverage could still be as low as $20/month.

Why would a renter need liability protection? Guess who is going to be sued for the fire damage? If it was in anyway caused by one of the other renters, they’d be sued for all damages, not just to the building, but also to any of the other residents who experienced loss and choose to sue.

Hopefully if this is the case, they had insurance, although with such a big loss, it’s unlikely the liability limit will be sufficient to cover it all. Most renters only carry $100k but often have an option of $300k and $500k without much difference in price.

Do you rent your dwelling? What would happen if there were a terrible fire and all of your possessions were lost? Do you think the building owner’s insurance would cover the loss of your belongings? That answer is, “Not likely.” So, do you need to consider renter’s insurance?

Before you buy the insurance, it’s a good idea to asses your particular situation. Each of us has our own set of insurance needs. The needs of a college student are obviously different than the needs of a family of four. Nevertheless, the college student’s first inclination to ignore the need for renter’s insurance might be a very costly one. That student might shop at the Salvation Army thrift store for his dishes, his clothes and his furniture, but the laptop computer and printer he uses to print his school assignments might be difficult and expensive to replace. A total loss, in the case of our college student could be a devastating financial blow from which he may take years to recover.

A family of four may own more expensive furniture, more rooms full of beds, dressers and rocking chairs, electronics, Aunt Hilda’s silver service and a growing collection of vintage baseball cards. In this case, there is no doubt. Renter’s insurance is not just a good idea – it would be foolhardy and reckless NOT to insure the contents of a rental home.

Begin by shopping around. Often, insurance companies provide incentives and discounts if you buy all of your insurance policies from them, so begin your search with the company you have your auto insured with.

What about price? Of course, the cost of your policy can vary a great deal. Where you live, how close your apartment is to a fire station, and other factors will play an important part. The age of the house and the materials from which it’s built will also come into consideration.

As with all insurance, the cost of your renter’s insurance will be affected by your insurance score and your claims history. If you are a high risk – and the insurance company will know this because you have a history of making many insurance claims and a bad driving record – your renter’s insurance will be more costly.

If you own a pet, particularly a dog whose breed is known for biting such as German Shepherds, Chow Chow’s and Pit Bull Terriers, your coverage may be more expensive or even impossible to get. You might think that the premium cost, because of your pet, is cost prohibitive, but in some areas owning such a breed makes it mandatory under law to carry liability insurance. Again, check with your agent.

There are ways for you to reduce your premium amounts and most all related to reducing the risk of a claim. If there is a sprinkler system in your apartment, it will save you money. If there is security at your building, that will save you money as well. If you have other security monitors, such as electronic systems like ADT, you will realize a savings. Know about these things before you meet with your agent.

Finally, by considering different and higher deductibles you may also enjoy a savings. Remember that you will have to pay that deductible in the event of a loss, but the savings in monthly premiums may be worth the chance you take.

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