Don’t compound disaster -- insure your possessions

Question: If there’s a disaster and everything is ruined in my apartment, doesn’t my landlord’s insurance cover me?

Answer: Not usually. Your landlord’s policy doesn’t include your possessions. It extends only to the landlord’s property. Your personal contents as a tenant are your responsibility to insure, which can be accomplished by having renter’s insurance. Some leases even require tenants to have renter’s insurance.

Required or not, insurance industry statistics indicate about 70% of renters polled don’t have the coverage.

What does a tenant get out of renter’s insurance?

According to the Insurance Information Institute, “Renter’s insurance provides financial protection against the loss or destruction of your possessions when you rent a house or apartment.”

Seventeen common perils are usually covered, including losses due to theft, vandalism, fire or lightning, smoke damage, water damage, windstorm or hail and even falling objects or explosions. Note that flood damage is usually not included, and neither is damage caused by earthquakes. If you’re nervous those perils might be a problem, a separate policy is usually available for an extra fee.

Coverage is similar to homeowner’s insurance, in that it also covers liability for accidental guest injuries.

What if your cat destroys a neighbor’s coat that was hanging on a chair during a visit? Your pet tarantula bites a visiting kid? Assuming the incidents were accidental, you should be covered for legal expenses (up to policy limits) if you need defense in court.

Additional living expenses also are covered by renter’s insurance. For example, if a fire leaves your place unusable, most policies will reimburse you for the added expense of living elsewhere while repairs are in progress. Naturally, there is a “cap” or limit on the total payout insurance will provide.

Renter’s insurance does not cover unpaid rent. It also does not apply to intentional damage, such as breaking a window or door in a fit of anger.

The coverage is available through most insurance carriers. Some companies offer a lower premium if it’s packaged with car insurance.

How much insurance should you carry? To determine that, most insurance companies suggest making a list or inventory of your possessions. Several inventory forms are available online and at office supply stores.

Don’t think you have that much stuff? Just checking your closet may surprise you. The cost to replace a wardrobe, including shoes, shirts and accessories, really adds up. Look around every room to be accurate.

As an added safeguard, send a copy of the inventory and any photographic backup to a relative or friend in another location. And be sure to tally the cost of your inventoried goodies.

The two types of insurance coverage available are replacement cost and actual cash value.

Replacement cost policies will reimburse the actual cost to replace belongings here and now. There are no deductions for the ages of items. For example, a television you bought two years ago will not be discounted; instead, you will be reimbursed for what it costs to go out and replace it today.

Under an actual cost value policy, the actual value, due to age or depreciation, is what you’ll be paid if there’s a loss. So, that same television would be reimbursed at a reduced price, much like a used car would be in an accident. This type of policy tends to be less expensive than a replacement cost policy.

Also to be considered are floaters. A floater covers specially named items in a separate insurance policy. Items of high or special value, such as antiques and jewelry, will be covered for loss in the event of an accident or covered disaster.

What about the cash stashed in your mattress? Cash is usually not covered by this or any other type of insurance.

The higher deductible you select, the lower the premium. The downside is you’ll have to take a greater loss if an accident occurs.

So, now that you understand the basics, get to work. Avoid being a statistic of loss.

H. May Spitz is a Los Angeles-based freelance writer. Reader comments may be sent to hmayspitz@aol.com.