Wash. Commissioner Warns Renters on Coverage

As the economic downturn continues, more and more people are losing their homes to either foreclosure or financially-motivated downsizing. In fact, 2.3 million properties received foreclosure filings in 2008 – up 81 percent from 2007 and 225 percent from 2006.

Washington Insurance Commissioner Mike Kreidler warns homeowners who go back to renting to protect themselves by purchasing renter’s insurance.

“Many people are struggling to make ends meet and it can be tempting to save the money, but now is not the time to scrimp on insurance,” said Kreidler. “If you’re renting, make sure you’re covered – trying to cover losses out-of-pocket is even tougher in today’s economy. In the long run, renter’s insurance could save you a lot of money.”

Following are myths and facts about common misperceptions related to renter’s insurance.

Myth: Renter’s insurance is too expensive, and I already have enough bills to pay.

Fact: The average policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your premises will cost much more.

Myth: I don’t have that many valuables, so renter’s insurance isn’t worth the cost.

Fact: Renter’s insurance can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.

Myth: I’m covered by my landlord’s insurance.

Fact: Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage rarely extends to your personal property.

Kreidler also offers these tips for renters, and for all insurance consumers:

• Buy the right coverage, and the right amount. Talk to your agent about the property you want to protect. Also ask if you need to purchase additional coverage to protect you in the case of a flood or earthquake.
• Highlight safety features. You may pay a lower premium if you have fire or burglar alarms, fire extinguishers, sprinkler systems and/or deadbolts on exterior doors.
• Stick with a single insurer. Many companies offer discounts if you have more than one policy with them, so buying auto and renter’s insurance through the same company could save you money.
• Take an inventory. A home inventory – along with photos and proof of ownership – make it easier to file an accurate, detailed claim in case of losses. An inventory also can help determine how much coverage you need.