St. Louis, Mo., July 20, 2012 – The disastrous fire that left 250 tenants of a St. Louis apartment complex homeless earlier this week is a tragic reminder of the need for renters to insure themselves against potential losses, the Better Business Bureau (BBB) advises.
While the majority of homeowners buy insurance for their homes and possessions, just one in three college-age renters carries renter’s insurance. More than half of all renters fail to buy the insurance, industry studies show. Some tenants are under the mistaken impression that their landlord’s policy will cover their losses.
“When a fire destroys your home or apartment, the loss can be devastating,” said Michelle L. Corey, BBB President and CEO. “Insurance can take some of the sting out of that loss by reimbursing you for the cost of replacing at least some of your possessions.”
Renter’s insurance generally covers property damage or loss caused by theft, fire, vandalism or storms. Losses due to weather-related floods often are not covered. In addition, most policies include liability coverage, which protects a tenant if someone gets hurt when visiting the home or apartment.
The cost of renter’s insurance is usually low because unlike homeowner’s insurance, it covers only personal property and liability, not the structure. According to the Missouri Insurance Department, renter’s coverage costs $8 to $21 a month for $20,000 to $30,000 in coverage.
Two types of renter’s insurance coverage are available:
- Actual cash value insurance pays to replace items up to the policy’s limits, minus a deduction for depreciation.
- Replacement cost insurance pays the actual cost of replacing your possessions, regardless of depreciation, up to the limits on the policy.
As with any insurance product, the BBB advises consumers to get estimates from several companies before buying a policy. College students may be able to get coverage with a rider to their parents’ homeowners’ policy, and other renters sometimes can save by getting coverage from the company that provides their car insurance or other policies.
The BBB advises consumers to read policies carefully and consider the following when buying renter’s insurance:
- Check out the insurance company with the BBB. BBB Business Reviews are available free at www.bbb.org or by calling 314-645-3300.
- Check with your state insurance department, which has information on how insurers handle claims as well as information on costs and industry ratings.
- Consider the value of your possessions versus the cost of insurance. Even a college student can have property worth a few thousand dollars, such as computers, televisions, furniture, jewelry or small appliances. If you have specific items of high value, you also may need a rider, which covers those items.
- Ask what deductibles apply to the policy. Higher deductibles can save you money, but you will have to pay more out of your own pocket to replace things.
- Ask whether the policy will cover living costs if you are unable to occupy your current apartment or home.
- Ask about any exclusions. Are there types of property that won’t be covered?
- Ask the insurer if they give discounts for burglar alarms, fire extinguishers, sprinkler systems or deadbolts on exterior doors.
- If you are switching insurers, be sure that the new policy is in effect before dropping the old one.
For more consumer tips or information on specific companies, go to
www.bbb.org or call 314-645-3300.
Contacts: Michelle Corey, President & CEO, 314-584-6800,
mcorey@stlouisbbb.org, or Chris Thetford, Vice President-Communications, 314-584-6743 or 314-681-4719 (cell),
communications@stlouisbbb.org
