The dramatic images of the fire that swept through a Central West End apartment building Tuesday night fascinated and saddened many area residents.
Fortunately, no human lives were lost, but many residents lost most of their possessions along with their homes. Many pets perished, too. And many of the residents had no insurance to help them replace what they lost.
Renter's insurance should be a no-brainer, but few renters ever get it despite its relatively low cost, insurance industry studies show. Today's release from the Better Business Bureau explains how renter's insurance works and has tips to help renter's shop for policies.
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
The BBB is a nonprofit, business-supported organization
that sets and upholds high standards for fair and honest business behavior. The
BBB provides objective advice, free BBB Business Reviews on more than 4 million
companies, 11,000 charity reviews, dispute resolution service, alerts and
educational information on topics affecting marketplace trust. Please visit
www.bbb.org for more information.
