A friend of mine’s son called me to request a quote on renters insurance. It’s an exciting time for him as he’s moving out from living with his mom and getting his own place. When I asked him how much coverage he needed, he let me know the property manager at the apartment complex told him was he needed $100,000 in coverage per the terms of the lease, but what does that mean?
I thought that was an interesting answer to my question, but I wasn’t sure if that was the amount it would take to replace his personal property or something else. My next question to him was, “If your apartment was gutted by a fire and you had to go replace everything you moved into it, how much money would that take?” As I mentioned in last week’s post (see www.wiseinsurancegroup.com/the-what-and-why-of-renters-insurance/), renters insurance provides two types of protection – coverage for personal property or contents and personal liability.
As I suspected, the amount of coverage my friend’s son needed for his personal property was much less than $100,000. Based on his estimate, the cost to replace his furniture, clothing, and other contents would take $15,000 to $20,000. That let me know the property manager was requesting $100,000 in coverage for personal liability.
Personal liability coverage protects the renter when someone comes onto the property or into their home, gets hurt, and sues the renter for negligence. Such as lawsuit could occur if someone tripped over something or fell and got hurt, a pet bit a maintenance worker, or just about anything else that could result in someone else getting hurt or having their property hurt.
I called the property manager to confirm that is what they meant. Once confirmed, I was able to complete a very cost-effective quote for his contents and a slightly better level of personal liability coverage. The property manager wasn’t dictating how much personal property coverage he needed. They were specifying the minimum amount of personal liability coverage his renters insurance policy needed. He was thrilled with the coverage and the rate, and I was pleased to welcome a new client on board.
What do you think? Share your comments, questions, or experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!