How A New Renter’s Insurance Saved Thousands Of Dollars
Client Advisor: Max Ieuter
A young professional came to me for advice on her renter’s insurance policy after moving into her first apartment. She was under the insurance policy included with the lease and wanted to make sure the policy provided sufficient coverage.
Assessing The Policy’s Potential Impact
During our initial consultation, I pointed out a few areas of concerns:
Under the landlord-issued policy, the coverage limits were shared with her two roomates.
The limits – even if applied only to her – were not nearly high enough to cover her in the event of a total loss of her belongings.
The unit she was in was at garden level and was therefore at significant risk for water backup (something most people don’t think about when renting a lower-level apartment).
I recommended a more robust policy that would increase her personal contents limits plus add $25,000 in water backup coverage. The new premium ended up being higher due to the limits increase and the fact it was now an individual policy rather than being split with other people. However, the changes proved to be a blessing.
Bringing Peace Of Mind During A Stressful Claim
Just three months later, while my client was away on a work trip, the apartment flooded due to a backup. Everything she owed was damaged – from clothes to furniture and $4,000 worth of camera equipment. In addition, the landlord had only put a box fan in the main hallway of the apartment. This wasn’t enough to prevent black mold from forming, so my client needed to find a new place to live.
She called me in a panic, terrified she had lost all her possessions and not knowing what to do. I helped her file the claim and talk to the claims adjuster to understand what she needed to do to ensure the claim would go through smoothly and quickly.
Thanks to the new policy and our swift action, my client was able to cover the cost of replacing all of her things as well as the additional expenses incurred over the month it took her to find a new apartment. Her roommates, in contrast, had stayed on the landlord policy, which provided no coverage for this situation. They had to pay for their losses and extra expenses out of pocket.
The Takeaway
Find an advocate that helps you understand what you are really paying for and whether it matches your needs.
As a young first-time renter, my client didn’t know what she needed based on her situation. By taking the time to get to know her, I was able to help her understand her risk level so she could make a more informed decision – one that ultimately prevented a loss of about $20,000.