Protect Yourself from Others
As a lawyer who handles personal injury lawsuits, I feel like I need to go to the roof of my office building right now and scream to people everywhere that “other than car insurance, renter’s insurance is probably the most useful product that one can buy and it will someday save you thousands of dollars”.
Wow, this guy is so dramatic! No, I’m really not. I work in Manhattan, where most people here, and in the outer boroughs, are renters. They live in an apartment with a little old lady above them who leaves the water running, a guy who smokes in the apartment to their left, a couple of college kids next door, on the right, who modify electronic scooters. Let’s also toss in a guy in the alley, who needs quick cash to buy drugs. Guess what? It’s only a matter of time before one of those neighbors does something to cause a flood or fire, destroys your property, or your apartment is burglarized, and you have to replace expensive items.
So getting cheap protection seems reasonable, right? Sure, and yet, 60% of renters didn’t buy the insurance, which, according to Insurance.com (which I randomly picked), costs on average $25/mo. for a policy with coverage levels of $40,000 for personal property and $100,000 of liability with a $1,000 deductible. You can buy more or less depending on how much protection you want.
So, what does it cover? I am so glad you asked. A renters policy covers three basics: personal possessions, living expenses in the event your apartment becomes uninhabitable, and your liability. The policies typically cover losses from burglary, vandalism, windstorms, and internal water damage. So, let’s say you while you are at work, that nice little old lady I mentioned earlier, falls asleep with her tub running. You come home to find your living room flooded. Your leather couch is soaked, your computer is fried, and your wooden table is stained and warped. If she doesn’t have the proper insurance to pay for your damages, then you can collect them from your own insurance carrier. Same thing if the “alley guy” breaks in and steals your computer and jewelry.
Protect Others from You . . . and Still Protect Yourself
Now for liability protection. This same policy protects you when your negligent acts cause harm to others, and this is where it becomes important to me. Every year, at our law firm, we get several cases where a client is injured in their apartment building due to another tenant’s negligence. Somebody fell asleep with a candle burning, and four apartments suffered smoke and fire damage. Yet, when we send a claim letter to the person that caused the accident, they advise that they just rent and don’t have insurance.
How will that play out? Again, happy to share. We will send you a claim letter advising you caused injuries to our client. You say you have no insurance. Great, but you have a nice job . . . and a car . . . and a bank account . . . and I have a duty to my client. I will sue you for your negligence. You will have to hire a lawyer and pay his hourly rate to defend (these guys are expensive). Then, despite hiring the lawyer, at some point, since you are in the wrong, you will be found to owe our client a damages award, let’s say $50,000. You have to pay it. You try. It hurts. You are now in debt, have bad credit, and may have to file for bankruptcy. So much for that vacation, you had planned. No chance at the flat screen for a while.
Now, do you see why I’m up on the roof screaming . . . because you ruined your life over $25 per month. So, call up a broker and get a renter’s policy . . . for peace of mind . . . and to get me off the roof. . . I’m disturbing people.