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What If I Accidentally Cause Fire or Water Damage in My Rented Apartment Unit?
Here is the real-life story of a client’s son. Let’s call him Joe (of course, we changed his name). Joe had just moved out of the family home and into his first apartment. Like many apartments, this one was equipped with interior fire sprinklers. Most people ignore them. Joe decided he might as well use them, and hung his freshly laundered t-shirts up to dry. A little later, in a hurry, he plucked a clean shirt from the sprinkler, and inadvertently set the sprinkler system off. Did you know that a typical Early Suppression Fast Response sprinkler system discharges approximately 100 gallons per minute?
Unable to stop the system, he had to watch as the water soaked all his belongings, the carpet and the upholstered furniture before flowing under the door and out into the hallway. And it didn’t stop there! The water also reached the apartments beneath, causing water damage to several neighbors’ furniture, expensive TVs and stereos, and computer equipment.
Luckily, he had a renter’s insurance policy, which covered him for the biggest loss: He was held liable for the damage to his neighbors’ property. A renter’s policy’s most important coverage is the liability protection it provides! This is crucial for people living in apartment and condo complexes with many close-by neighbors!
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Here is another story – a similar question that we found on the web: A tenant accidentally, and negligently, caused a grease fire, which luckily could be contained quickly – but which still caused considerable damage to the unit’s kitchen. She did not have renter’s insurance.
Assuming that the landlord’s policy would cover the damage to the building, she wasn’t too worried about her own property; she hadn’t lost much in the fire.
But a few weeks later, she received a letter from her landlord’s insurance company, which sought repairs for the damage she caused to the apartment and the building.
What?
Wasn’t the landlord’s fire policy responsible for that? Why did they expect her to pay for the damage? Did they have a right to do that?
Well – even if the landlord has an insurance policy for the building, and even if that insurance initially pays for the claim, this company has a right to seek recovery for their expenses. If they find the tenant to be responsible for the loss – even if it was an accident caused by negligence – they have a right to seek reimbursement for their expenses. This process is called “subrogation” (an insurance company ‘coming after’ another insurance company or an individual, seeking reimbursement for their expenses).
Unfortunately, it isn’t hard to imagine that an insurance company will make use of this, right?
This is where renter’s insurance comes in.
Contrary to common belief, renter’s insurance is not only there to cover your personal property. In fact, personal property coverage is the least important part of a renter’s insurance policy.
What’s more important is that renter’s insurance provides liability coverage (in case you accidentally cause damage to another person – for example: you drop your friend’s laptop as you help her move, your friend stumbles over your cat and breaks his leg – or, you cause damage to neighbors’ personal property. The liability coverage of a renter’s policy will protect you in case you are held responsible for such an accident.
A renter’s policy also pays for the cost to defend you if you are being sued in liability lawsuit. Think of the tenant in the second example: Had she had renter’s insurance, her insurance company would not only have defended her in this lawsuit, but would have also paid for the damage she caused to the apartment, if she was held liable (up to her liability limits.)
Long story short: Renter’s insurance can bail you out of a lot of trouble, if you have it.
Renter’s insurance is very affordable – usually costing around $15 per month. Not only that: It will also qualify you for a steep discount on your auto insurance, so that it virtually pays for itself.
Among all the insurance products out there, renter’s insurance is among the Top 2 that deliver the biggest bang for your buck. If you rent, you should have renter’s insurance. It’s worth it.
For an instant, comparative rate quote, please click here: https://www.autohomeboat.com/insurance/renters/.
Please note: The information in this blog is illustrated in examples and refers to insurance law in Washington State. Actual claims scenarios might vary, be subject to different regulations in other states, and/or be subject to exceptions and exclusions of your particular homeowner’s insurance contract. If you have a claim, please contact your agent or insurance company directly for answers on coverage questions.