The Costs of (Not) Having Renter’s Insurance

I personally believe renter’s insurance is just as important as home owner’s insurance. The likelihood that you ever need to use it is small, but the consequences of needing it and not having it are devastating. Devastating to the point that I would probably leave the country if the worse case scenario happens. I will explain in a minute, but first, many companies give a discount for bundling a renter’s and automobile insurance policy. Some renter’s insurance policies are so cheap, the discount on the automobile insurance policy is greater and you save money by purchasing renter’s insurance.

I bet you think the worse case scenario I describe is your apartment building burning down and you lose all of your personal belongings Yes, that is a terrible experience to have happen, and yes it is important to have renter’s insurance for that reason, but believe it or not, that is not the worst thing that can happen to you. Before we get into the worst of the worst, let’s talk about you losing your personal belongings

Electrical Fire

An electrical fire starts in the house you rent. The house burns to the ground and is completely destroyed. You have $17,000 of belongings. This includes $400 in cash, clothes, TV, jewelry, etc. If this happens and you have a renter’s insurance policy, you will get a new TV, new clothes, whatever you lost in this disaster. If you don’t have a policy, well you are starting completely over and probably have to ask friends and family for help. All you had to do was pay about $10 a month

Kitchen Fire caused by Tenant

An individual lives in a 8 unit apartment building. This individual accidentally start a kitchen fire from forgetting something on the stove or a candle that the renter previously lit falls over and catches their unit on fire. The fire then spreads to the rest of the building. The building is partially destroyed with a cost of about $200,000. The 7 other people or families that live in your building with you have their belongings destroyed. This adds up to an additional $150,000 in damages. That totals to $350,000 in total damages.

In the scenario above, the individual that started the fire is negligent and therefore responsible for the damages. If the building owner has insurance on the building, their insurance company would pay for the damage to the building. But, the insurance company would file a lawsuit against the individual that started the fire. The same scenario would apply to any of the renters of the other units. And if the other tenants do not have a policy in force, they will sue the individual personally.

Jon, a former supervisor dealt with this same situation in his early years. Here is his take on what he experienced. “It was one of my first claims, I was assigned to. This young girl started a kitchen fire and burnt down a building. Not only did the owner of the building file suit, but every single one of her neighbors filed a lawsuit against her. Her life was ruined. She could never buy anything on credit for the rest of her life until she paid everything off”.


Depending on where you live, a stand alone renter’s insurance policy generally ranges between $100-$175. Some more some less, a few factors play in such as loss history and even neighbors loss history. As previously stated, many companies offer a multi-policy discount on your automobile insurance policy if you purchase renter’s insurance. I have personally witnessed a few times the savings was $200 on an individual’s automobile policy and they saved $50 by actually purchasing renter’s. I offer a policy to everyone that gets an auto quote. If you do not have renter’s insurance and you rent, it’s time to think about it. Contact your agent or start a quote here with one of our suggested insurance companies.

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