Renters should carry insurance

Barbara,Clair Ramsey

In our last column on Nov. 28, we offered advice to the landlord. This column will do the same for the tenant in three areas: insurance, the move-out, and giving notice you are leaving.

First, consider getting a renter's insurance policy.

An survey in mid-2010 found almost 70 percent of tenants did not carry renter's insurance despite statistics showing that renters are 50 percent more likely than homeowners to need insurance. The primary reasons for renters not getting insurance were misconceptions that their personal property wasn't worth insuring, a policy would be too expensive, or they didn't know insurance for renters existed.

Typical tenants likely have a minimum of $10,000 to $20,000 in personal property. Just look around and start adding up the cost to replace your furniture; clothing; TV, computer equipment and accessories; dishes, cookware and silverware; jewelry; and such appliances as a microwave, refrigerator, washer, dryer. It adds up quickly.

Renter's insurance covers liability as well as the typical disasters of theft, fire and interior water damage, but usually not wind, exterior flood or earthquake damages. However, these can be covered in a separate add-on policy. Premiums could be as little $12 a month or -- to put it into proper perspective -- the cost of skipping one latte a week.

Take the time to understand your policy.

Here are three additional items to be aware of in a renter's policy.

1. Actual cash value vs. replacement cost. When you make a claim, actual value will pay you less because an item is worth less as it ages. If you elect to have replacement cost, it will increase your premium, but you will get the full cost to replace your damaged property. Unusually expensive items need a separate policy.

2. In addition to making a room-by-room list of your belongings, consider taking photos of items and photos of each room as a whole. Write down serial numbers as applicable, and keep receipts in a separate safe location.

3. Your policy also might cover "additional living expenses." This helps cover the expense of living someplace else if your home becomes unlivable.

To help keep your premiums low, ask what would help get additional premium discounts. Sometimes combining your auto and renter's policy or having a higher deductible can maximize your coverage.

Second, rethink how you deal with property condition at the move-out. Many disagreements between tenants and landlords occur because the original move-in condition is long forgotten at the move-out.

Start preparing in the beginning, when you do the initial move-in walk-through. Have the landlord or their representative present so you both can see any items of note. Next, take photos. Smart phones have cameras, so documenting is easy. The photos should be printed or e-mailed to the landlord, so all parties have a copy. This will help limit questions later and help expedite return of your security deposit.

Third, understand your lease agreement.

Another area of frequent disagreement between tenant and landlord is when tenants "give notice" they are leaving.

Tenants tend to focus on the number of days but forget about the "when" notice is given. For instance, if a tenant must give 30 days' notice before vacating, giving notice on the 15th of the month, when your rental period begins on the first, doesn't mean you can leave on the 15th of the next month and not pay rent for the full month. The 30-day clock starts at the beginning of the next rental period after you give notice, so you are responsible for rent for the entire period.

Finally, to fully understand your rights as a tenant, read the Landlord Tenant Act available at It is an easy-to-read guide to the entire process and how to handle most of the commonly occurring problems.

Clair and Barbara Ramsey are local associate brokers specializing in residential real estate. Their column appears every fourth Sunday. Their e-mail address is